Community Challenges Hyperliquid’s Stripe-Integrated USDH Initiative

Hyperliquid’s plan to launch its own stablecoin, USDH, has triggered one of the most contentious governance debates in crypto this year. The token could replace $5.5 billion of USDC—currently 95% of the platform’s stablecoin supply—and generate substantial revenue from U.S. Treasury yields. A validator vote on September 14 will decide which bidder wins the contract.

Bidders in the Race
Key competitors include Paxos, Frax, and a coalition led by Agora with backing from MoonPay. Paxos proposes allocating 95% of reserve earnings to HYPE token buybacks, leveraging its regulatory track record. Frax offers a “community-first” approach, passing 100% of Treasury yields directly to users. Agora’s proposal emphasizes neutrality and alignment, pledging all net revenue for HYPE buybacks or the Hyperliquid Assistance Fund. Ethena may also enter the fray, adding more competition.

Stripe Proposal Sparks Backlash
A proposal linked to Stripe’s Bridge platform has drawn criticism. Community members warn that giving Stripe—already building its Tempo blockchain and controlling wallet infrastructure via Privy—control over USDH could undermine Hyperliquid’s economic sovereignty. Agora CEO Nick van Eck remarked, “If Hyperliquid relinquishes their canonical stablecoin to Stripe, a vertically integrated issuer with clear conflicts, what are we even doing?” MoonPay President Keith Grossman added that USDH “deserves scale, credibility, and alignment—not capture.”

Next Steps
Proposal submissions close on September 10, with the validator vote on September 14. The Hyperliquid Foundation will abstain, leaving the decision to validators. Controlling USDH is a highly lucrative opportunity, given Hyperliquid’s dominant 80% share of the DeFi derivatives market.