Popular DEX Hyperliquid Moves Forward to Launch Proprietary Stablecoin

Decentralized exchange Hyperliquid ($HYPE) is preparing to launch its own U.S. dollar stablecoin, according to a Friday announcement from the Hyperliquid Foundation on the platform's Discord server.

The protocol has reserved the ticker $USDH, which validators will soon vote to allocate through an on-chain governance process, the announcement read. Teams interested in deploying $USDH can submit proposals, and the winning group will be selected by validator quorum, the post added.

"The $USDH ticker is well-suited for a Hyperliquid-first, Hyperliquid-aligned, and compliant USD stablecoin," it said.

Stablecoins are a crucial piece of infrastructure of crypto markets, serving as liquidity and trading pairs to settle most trades. It's a $270 billion asset class, currently dominated by Tether's USDT and Circle's $USDC. However, with regulation put into place such as the GENIUS Act in the U.S., industry players increasingly create their own token for their ecosystems. Popular crypto wallet MetaMask is launching a stablecoin with infrastructure provider M0, while payment firm Stripe created its own in-house stablecoin with Bridge.

Hyperliquid’s trading activity suggests there could be immediate demand. The exchange handled $398 billion in perpetual derivatives trading volume and $20 billion in spot trades last month, DefiLlama data shows. Circle’s $USDC ($USDC) currently dominates liquidity, making up 95% of the $5.6 billion stablecoin supply on the network.

By introducing its own stablecoin, Hyperliquid, in theory, could reduce dependency on Circle while capturing revenue from assets backing the token.

Read more: Hyperliquid’s $HYPE Token: Why Arthur Hayes Thinks It Has 126x Upside Potential