Native Markets Predicted to Secure Hyperliquid’s USDH Stablecoin Bid with 93% Probability

Polymarket users are predicting a 93% chance that Native Markets will win the bid to issue Hyperliquid’s new USDH stablecoin. This high probability comes as Hyperliquid, a leading decentralized exchange, seeks to launch its own native stablecoin to reduce reliance on external assets like USDC and capture yield revenue within its ecosystem.

The initiative to create USDH stems from Hyperliquid's significant dependency on external stablecoins, with approximately $5.6 billion in deposits, 95% of which is USD Coin (USDC). This reliance leads to value leakage, as yield generated from these reserves goes to issuers like Circle, and introduces sovereignty and security risks. The competitive bidding process for USDH aims to internalize this value.

Native Markets, a newly formed organization led by Hyperliquid community advocate Max Fiege, proposes to issue USDH via Stripe’s stablecoin payment processor, Bridge. Their proposal includes a 50/50 split of reserve income, with half dedicated to HYPE token buybacks and the other half to platform development. This approach positions them as a "Hyperliquid-native" option.

However, the bid has faced scrutiny. Critics, including Haseeb Qureshi of Dragonfly, have questioned the fairness of the bidding process, suggesting it appeared "custom made for Native Markets" despite more established contenders like Paxos, Ethena, and Agora. Concerns have also been raised about potential conflicts of interest due to Stripe's broader ambitions in the blockchain space.

Ethena, another prominent bidder, recently withdrew its proposal, acknowledging community pushback about not being a Hyperliquid-native project. Ethena Labs founder Guy Young stated, "It is a level playing field where emergent players can win the hearts of the community." This withdrawal further solidified Native Markets' position as the frontrunner in the Polymarket predictions.

The selection of the USDH issuer is a significant governance event for Hyperliquid, with the winner chosen through a stake-weighted validator vote. The outcome will not only define USDH's fundamental characteristics but also has substantial implications for the broader stablecoin market, potentially redirecting hundreds of millions in annual Treasury yield from existing stablecoin issuers.