A heated contest for control over a new dollar-pegged token has set the stage for what analysts say could define the next phase of the stablecoin industry.
According to Bloomberg, a bidding war unfolded on Hyperliquid, one of crypto’s fastest-growing trading platforms, with the prize being the right to issue USDH, its native stablecoin.
The competition drew some of the sector’s most prominent names, including Paxos, Sky, and Ethena, who later withdrew their bid, alongside the lesser-known Native Markets, a startup backed by Stripe stablecoin subsidiary Bridge.
Over the weekend, Hyperliquid’s validators, the contributors who secure the network and vote on key decisions, awarded the USDH contract to Native Markets over the weekend.
Despite its relatively new status, the firm’s connection with Stripe helped it outpace more established rivals.
Stablecoins underpin decentralized finance by providing a dollar-backed medium for collateral, settlement, and payments across applications.
What began as a grassroots, community-led sector has evolved into a battleground for institutions and payment companies seeking revenue from interest on reserves.
Circle, for example, shares proceeds from its USDC with Coinbase under a partnership designed to stabilize earnings during market swings.
The Hyperliquid contest offered a rare glimpse into just how intense competition has become. Paxos pledged to take no revenue until USDH surpassed $1 billion in circulation.
Agora offered to share 100% of net revenue with Hyperliquid, while Ethena put forward 95%. All were outbid by Native Markets, whose ties to Stripe’s $1.1 billion acquisition of Bridge and subsequent rollout of the Tempo blockchain positioned it as a strong contender.
“Every stablecoin issuer is extremely desperate for supply,” said Zaheer Ebtikar, co-founder of Split Capital. “They are willing to publicly announce how much they are willing to offer. It just shows it’s a very tough business for stablecoin issuers.”
While USDC remains dominant on Hyperliquid with more than $5.6 billion in deposits, the arrival of USDH could shift flows and revenue dynamics.
Paxos co-founder Bhau Kotecha said the firm sees the exchange’s growth as an important opportunity, while Agora’s co-founder Nick van Eck warned that awarding the contract to a vertically integrated issuer risked undermining decentralization.
Regulatory positioning also factored into the debate. Paxos operates under a New York trust charter and is seeking a federal license, while Bridge holds money transmitter approvals in 30 states.