Sky Joins Hyperliquid USDH Stablecoin Race with $8B Backing and 4.85% Yield

September 9, 2025

Sky, formerly MakerDAO, has entered the competition to issue Hyperliquid’s native stablecoin, USDH, competing with Paxos, Frax, Agora, and Native Markets. The proposal leans on Sky’s $8 billion balance sheet, seven years of operating history, and a B- S&P credit rating—the first such rating for a decentralized finance (DeFi) protocol.

Hyperliquid, which recorded nearly $400 billion in trading volume last month, has invited issuers to vie for the lucrative USDH contract. The exchange holds $5.5 billion in USDC deposits, about 7.5% of the stablecoin’s total supply. Validators are scheduled to vote on September 14, with the Hyperliquid Foundation abstaining.

Sky’s Proposal Highlights:

• Yield: 4.85% returns on USDH held on Hyperliquid, with revenue earmarked for HYPE buybacks and the Assistance Fund.
• Liquidity: $2.2 billion in instant redemption via its Peg Stability Module, supporting institutional-scale transactions.
• Ecosystem Investment: A $25 million “Hyperliquid Genesis Star” to boost DeFi activity, alongside migration of Sky’s $250 million annual buyback engine onto Hyperliquid.

Other bidders offer different strategies: Paxos allocates 95% of reserve earnings to HYPE buybacks; Frax funnels 100% of Treasury yield to users; Agora emphasizes neutrality backed by State Street, VanEck, and MoonPay; Native Markets faces community scrutiny over potential conflicts with Stripe’s Bridge.

The upcoming vote will determine whether USDH’s monetary layer is anchored to a DeFi-native protocol, a legacy stablecoin provider, or a corporate blockchain player.