Competition Arises: Sky Vies for Hyperliquid's Significant $5.5 Billion Stablecoin Agreement

Cryptocurrency project Sky, previously recognized as Maker, immerses itself in a competitive auction to introduce the stablecoin USDH native to Hyperliquid.

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2025 September 21 . 6:24 PM

2 min read

Competition Heats Up as Sky Vies for $5.5 Billion Stablecoin Deal Offered by Hyperliquid

Competition Arises: Sky Vies for Hyperliquid's Significant $5.5 Billion Stablecoin Agreement

In a significant move, the decentralized perpetual futures exchange, Hyperliquid, has announced plans to launch its own stablecoin, USDH, in a bid to reduce dependence on external providers like Circle's USDC. This decision has sparked a competitive race among five major companies, including Sky, to control a potential multi-billion dollar revenue stream in crypto.

Hyperliquid's unique approach to stablecoin governance emphasizes community control over corporate decisions. The Foundation's validators will abstain from voting, placing the decision-making power in the hands of the community. This strategy, according to Jaehyun Ha from trading firm Presto, opposes the centralized control characteristic of many exchanges.

Sky, a notable player in the stablecoin market, has committed $25 million to 'autonomously grow DeFi on Hyperliquid.' If successful, this could generate exclusive tokens that could potentially add billions in value to the protocol. Sky's proposal includes cross-chain functionality using the LayerZero protocol, allowing USDH to work across multiple blockchains.

Sky also promises regulatory flexibility, allowing the stablecoin to comply with US laws like the GENIUS Act. The company manages $12.5 billion worth of stablecoins through its USDS and DAI tokens, making it one of the largest stablecoin operators in crypto. Sky offers Hyperliquid a 4.85% return on all USDH tokens, significantly above the T-Bill rate.

The competition for the USDH contract involves five major companies, including Sky, Paxos Labs, Frax Finance, Agora, and the eventual winner, Native Markets. The co-founder of Native Markets, Max Fiege, will issue the new USDH stablecoin for the Hyperliquid platform on September 14, 2025, after winning an on-chain governance vote.

The winner of the competition will be chosen through a validator vote scheduled for election day. Some existing stablecoin teams on Hyperliquid have raised concerns about reopening the USDH ticker, but the community vote could influence how other platforms approach stablecoin governance and revenue sharing.

Industry analysts predict that USDH could capture 15% of current USDC liquidity, potentially diverting $5.5 billion from Circle's control. Hyperliquid handled $378 billion in trading volume over the past month, making it the largest decentralized perpetual futures election. The platform generated $106 million in revenue over 30 days, surpassing both Solana and Ethereum combined during the same period. Total Value Locked on Hyperliquid recently hit an all-time high of $5.55 billion.

Currently, USDC makes up 95% of the $5.6 billion in stablecoins on Hyperliquid's platform. The new USDH stablecoin could shake up the current market dynamics, offering a decentralized alternative to the dominance of USDC. The validator vote on election day could be a pivotal moment in the evolution of decentralized finance on Hyperliquid.