Hyperliquid has confirmed that Native Markets will issue its long-awaited stablecoin USDH, bringing an end to weeks of speculation and community debate. The decision followed a contentious governance race that drew interest from major players, including Paxos and Ethena, and has now entered a controlled testing phase with limits placed on early transactions. Native Markets emerges as favourite for the USDH stablecoin project The race for USDH was closely watched across the industry, and Native Markets secured victory after weeks of campaigning, validator commitments, and heavy betting on prediction platforms suggested their win was inevitable. Paxos, once considered a strong contender, failed to gain momentum despite offering a revised proposal that included deep PayPal and Venmo integrations, a $20 million incentive plan, and capped revenue sharing. Ethena withdrew from the contest days before the final decision, citing concerns about its non-native infrastructure. The outcome has been described by observers as a pivotal moment for Hyperliquid, which has been steadily expanding its presence in the digital asset markets. Notably, the decision to partner with a native player rather than an established external issuer is seen as a statement about ecosystem self-reliance and tighter integration. USDH testing phase starts with strict limits Following the announcement of Native Markets’ choice, controlled testing of USDH will begin within days with transaction limits of $800 per user. Notably, only whitelisted participants can mint or redeem tokens, a measure designed to reduce risk while the system is evaluated. In parallel, the deployment of an ERC-20 version of USDH is being prepared for Ethereum, allowing for easier integration across wallets, bridges, and trading platforms. Notably, this step is critical for USDH’s adoption, as cross-chain compatibility remains one of the main demands for stablecoins competing in a crowded market. The first trading pair, USDH/USDC, is expected to open soon, and market makers anticipate that peg stability, spreads, and arbitrage opportunities across exchanges will serve as early indicators of the stablecoin’s health and credibility. max.hl @fiege_max · Follow Replying to @fiege_max We will be deploying both the USDH HIP-1 and corresponding ERC-20 within days.We will then start with a testing phase for mints and redeems of up to $800/tx with an initial group, to be followed by the opening of the USDH/USDC spot order book as well as uncapped mints & 9:52 PM · Sep 14, 2025 279 Reply Copy link Read 23 replies Concerns over transparency While the selection of Native Markets has been welcomed by many in the Hyperliquid community, critics have questioned the transparency of the voting process. Dragonfly’s Haseeb Qureshi described the procedure as “not rigorous,” hinting at possible behind-the-scenes influences. Others, including Mert Mumtaz of Helius, have stressed the need for clearer governance and have warned that without transparency, stablecoins risk appearing interchangeable with little to distinguish them. The governance debate now shifts to the upcoming Hyperliquid Improvement Proposal, which will outline the rules for upgrades, permissions, and security procedures. Questions remain over who will hold mint and burn permissions, the structure of emergency controls, and how reserve data will be disclosed to the public. A cautious rollout Native Markets has signalled that the rollout of USDH will proceed in stages. The initial minting and redemption trials will be followed by the launch of a USDH/USDC order book. Broader access will come only after successful stability checks and internal audits. Reserves are set to be managed through a hybrid approach, with cash and US Treasuries overseen off-chain by BlackRock and tokenised assets managed on-chain via Superstate and Stripe’s infrastructure. The team has pledged to split reserve yields between Hyperliquid’s Assistance Fund and wider ecosystem growth, a move designed to reassure the community that the stablecoin’s benefits will flow directly into its development. Notably, the project has received backing from veterans of Uniswap Labs, Paradigm, and Polychain, strengthening confidence in the project. The post Hyperliquid chooses Native Markets for USDH stablecoin, testing phase begins appeared first on Invezz
