Original Title: The Hunger Games: USDH arc

Original Author: Naruto11.eth

Original Translation: AididiaoJP, Foresight News

If you've spent even just 3 months in the crypto space, by now you should know what Hyperliquid is. And if you don't, in short, it is: one of the most successful projects in the cryptocurrency space, with the highest revenue, a loyal community, and the future of decentralized finance.

Currently, all eyes are on the proposal of Hyperliquid and USDH.

What is USDH?

Essentially, it is a "Hyperliquid-native stablecoin."

So far, there have been multiple proposals, with even WLFI wanting to get involved. For brevity, we will skip those weaker proposals.

Here are the main competitors:

And the latest Polymarket data:

Native Markets

Native Markets: Founded by @fiege_max and his team, received the most votes on Polymarket.

Some interesting ideas proposed by Native Markets:

· The construction of USDH is compliant with the GENIUS Act and managed through custody for institutional reserve management, designed independently of the issuer.

· Hyperliquid Foundation: 50% of reserve income flows directly and immutably to the Hyperliquid Foundation, with the other 50% reinvested in USDH growth. This mirrors past Hyperliquid fee sharing precedents (HIP-3, deployer fees), community ownership, and long-term Hyperliquid alignment.

· Developed the CoreRouter smart contract, a pioneering smart contract used to atomically mint on HyperEVM and bridge USDH cross-chain to HyperCore.

Overall, many people now support the Native proposal.

Ethena

Ethena: Just this morning, I learned through @gdog97_ that this is actually a very powerful proposal, with many community members and external parties vouching for it. Ethena also has such a strong team and rich experience in stablecoin issuance. Here are some brief notes:

· USDH initially 100% backed by USDtb (held in custody by Anchorage Digital Bank to comply with the GENIUS Act), indirectly backed by BlackRock BUIDL. Emphasizing institution + compliance + ample early liquidity.

· One point I personally like in the proposal: Currently, the supply of USDtb is greater than the total cumulative supply of all other purely sovereign debt-backed stablecoin issuers who have submitted applications to date. Including USDe, the product scale of Ethena is about 10 times that of all other such issuers combined, excluding Sky. To date, Ethena has minted and redeemed over $23 billion in tokenized dollar-denominated assets, with no security incidents or downtime.

· Benefit to the community: Commits to allocate no less than 95% of USDH reserve net income to Hyperliquid (Foundation + HYPE buyback; later possibly shared with staked HYPE and validators by vote).

· Ethena will cover all transaction costs of moving from USDC to USDH.

· Security provided by a Hyperliquid group elected by vote, empowered to freeze and reissue to prevent any type of major damage or malfunction.

· Liquidity and microstructure advantages: Achieve instant USDH, USDC, and USDT liquidity swaps through Ethena's market maker relationships and fee tiers; the aim is to have no liquidity disadvantage compared to USDT trading pairs on CEXs.

· GENIUS Act advantage: Currently the sole path to full GENIUS compliance through ADB; NYDFS and MTL paths may be slower and less certain.

Strong ecosystem showcase, I believe: $13 billion USDe balance sheet, the largest natural counterparty in perpetuals; committed to providing $750 million to $150 million incentive for HIP-3 front-end

What truly wins everyone's heart? The prophecy worth 800 USD per point will be achieved through Ethena.

Agora

Agora: I personally support the proposal by @withAUSD and @Nick_van_Eck. Agora's stablecoin infrastructure for USDH is actually very impressive, here are some key points:

· Reserves managed by J.P. Morgan (49 trillion USD AUM) and VanEck (1.3 trillion USD AUM); liquidity management banks (Cross River, Customers Bank), with institutional-grade setup and early credibility.

· 100% Net Revenue Revert to Hyperliquid: All reserve income goes back into the buyback fund. Simple, maximizing value accrual.

· Hyperliquid's preferred and impartial issuer: USDH natively issued on Hyperliquid; Agora has no competing chains, broker-dealers, or exchanges (frictionless alignment).

· Compliant with GENIUS Act requirements

· Strong distribution network: Rain + LayerZero + EtherFi. This brings in new users and more liquidity to Hyperliquid, especially leveraging crypto cards.

· Day 1 liquidity of 10 million USD.

My thoughts: @Nick_van_Eck and other team members bring a lot of experience from the traditional financial world and @vaneck_us itself, which is why I believe they can win the vote and make USDH great. I am also a loyal fan of the @withAUSD team.

Sky

Sky (formerly MakerDAO): @SkyEcosystem and @RuneKek have also put forward a great proposal. Everyone knows MakerDAO and their importance as an ecosystem to cryptocurrency. Here are some things I've learned:

· Sky is the fourth-largest stablecoin project: 80B+ USDS, 13B+ in collateral, over 7 years of smooth operation, with no security incidents.

· However, Sky also has a liquidity advantage: achieving instant redemption of 2.2 billion USDC through the Protocol Stablecoin Module (PSM) + seamless switch to USDH margin perpetual contracts and spot trading pairs. Sky has deployed its 80 billion + balance sheet into Hyperliquid.

· Utilizing LayerZero.

· All 4.85% returns on USDH on Hyperliquid are used for the buyback of the HYPE fund. Optional sUSDS integration and instant access to the Sky savings rate (currently at 4.75%).

· Committed to investing $25 million to establish a DeFi incubator for "Hyperliquid Genesis Star" token mining, similar to Spark (with a TVL of $12 billion). Sky's annual $2.5 billion + profit buyback may migrate to Hyperliquid. This increases liquidity and sets a standard for protocol buybacks.

· Most of the remaining content is the same. Compliant with GENIUS requirements, risk management and transparency, real-time monitoring, and long-term planning: USDH becomes its own "Sky-generated asset."

There was indeed a tweet that resonated with me, and I think Sky's positioning is also quite good.

Frax Finance

Frax Finance: Here are some brief notes from the @fraxfinance team.

· Frax commits to allocating 100% of treasury revenue to Hyperliquid. No cuts, or tokens, or any form of revenue sharing.

· In their updated proposal, they state ownership of a federally regulated U.S. bank (name not disclosed yet) + compliance with the GENIUS Act requirements.

· Holding U.S. treasuries through Blackrock, superstate, wisdomtree, etc.

· Frax Distribution: Connectivity across 20+ chains, but USDH remains native to Hyperliquid. Rewards circulate on-chain programmatically + transparently; governance chooses recipients.

· Community-first.

Projected Economic Impact: $55B in Deposits + 4% Annual US Treasury Bond Yield = $220M Annual Revenue. All to be fully backfed to Hyperliquid:

· Boost HYPE Staking Yield

· Buyback Fund Repurchase

· Trader Rebates or USDH Holding Rewards

Paxos

Paxos: The final outstanding competitor is @paxos. They have submitted a V2 version for the USDH proposal, similar to $PYUSD.

Here are some key points about Paxos and its proposal:

· Paxos is globally promoting Hyperliquid.

· Distribution Effort: HYPE will be listed on PayPal and Venmo, and USDH will provide a free fiat on/off ramp.

· Committing $20M in incentives, with PayPal committing $20M in incentives within the Hype ecosystem.

· Checkout Integrations: PayPal Checkout, Braintree, Venmo P2P, Hyperwallet Mass Payments, Xoom Remittances (100+ countries)

Revised Aid Fund Revenue Structure:

· Starting at 20% allocated to the buyback fund (TVL < $1B) and incrementing, reaching 70% to the aid fund once USDH > $5B

· Paxos charges 0% until $1B, capped at 5% post $5B, fees are held in HYPE

· Governance votes on every significant event, overseen by the community

More Significant Things:

· Users can even trade Hyperliquid liquidity unknowingly.

· Paxos, as the asset issuer, will introduce RWA into the HIP-3 perpetual contract.

· Paxos will build HyperEVM 「Earn」 product + tokenized HLP structured products for retail and institutional scale

These are the 6 main proposals. Although I like these proposals, I would lean more towards Ethena because they have a strong, serious proposal, or Agora because they have those traditional financial relationships that can take Hyperliquid to a higher level.

Many people are betting on Native, and there are constant rumors that the winner has already been decided even before the bidding starts. If you link the speed at which Native was established and its proposal, which lacks real substance compared to Agora or Ethena, this indeed makes some sense.

Over the past 4 days, I have spoken with several Hyperliquid members and read many of their viewpoints on Twitter. Almost everyone has stated that the situation is not as described. Validators have not yet made a decision on any proposal, and it is impossible for any proposal's winner to have been selected beforehand.

However, I personally believe and agree with @hosseeb's view that there is some authenticity in this, or at least that was the initial expectation, and the winner has already been somewhat predetermined. Nevertheless, this is actually a good marketing opportunity for Hyperliquid and all the companies involved.

What will happen now? Nobody knows, but we will soon see who prevails. My money is on Ethena. How about you?

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