Hyperliquid, the world's leading on-chain perpetuals decentralized exchange controlling over 35% of global activity, has launched its native stablecoin, USDH, following a governance vote by its validator community. The vote, which concluded last week, selected Native Markets to issue USDH after a competitive bidding process involving proposals from Paxos, Ethena, Frax, and others.
The stablecoin went live on September 24, 2025, and immediately generated significant market interest, with the USDH/USDC trading pair reaching a volume of over $2 million within hours and trading at a price of 1.001. USDH is issued natively on HyperEVM and is backed by cash and short-term U.S. Treasury securities, aiming to reduce Hyperliquid's heavy reliance on external stablecoins like USDC, which accounts for more than 90% of deposits on the platform.
This launch marks Hyperliquid's first major governance decision outside routine listings, highlighting the growing influence of community-driven processes in DeFi. The stablecoin incorporates a yield strategy where 50% of the revenue from its reserves will fund buybacks of the HYPE token, while the other 50% supports ecosystem growth initiatives, internalizing monetary benefits within Hyperliquid's platform.
Hyperliquid's market share has declined from a peak of 70% in May 2025 to around 35%, and the introduction of USDH is seen as a strategic move to bolster liquidity retention and challenge traditional stablecoins, potentially reshaping DeFi market dynamics.