Key Takeaways
- The proposal outlines that 95% of interest earned from USDH reserves will be used for buybacks of Hyperliquid’s native HYPE token.
- USDH will integrate with Paxos’s existing brokerage infrastructure, which already powers services for PayPal, Venmo, and MercadoLibre.
Paxos, a U.S.-regulated stablecoin infrastructure provider, has announced plans for USDH, a Hyperliquid-first stablecoin designed to comply with both the U.S. GENIUS Act and Europe’s Markets in Crypto-Assets (MiCA) framework. The company said USDH is “purpose-built to drive adoption, align incentives, and anchor the ecosystem’s next era of growth.”
The proposal, put out on Saturday, outlines that 95% of interest earned from USDH reserves will be used for buybacks of Hyperliquid’s native HYPE token. The initiative is structured to redistribute value to validators, users, and protocols within Hyperliquid’s network. Revenue share will be determined by USDH balances and transaction volumes across Hyperliquid platforms. Paxos described the redistribution plan as an effort to recycle capital back into the ecosystem.
According to the proposal, USDH will integrate with Paxos’s existing brokerage infrastructure, which already powers services for PayPal, Venmo, and MercadoLibre.
To lead the initiative, paxos has formed Paxos Labs, a new entity within the firm. Under its efforts, Paxos Labs has also acquired Molecular Labs, the developer behind Hyperliquid primitives LHYPE and WHLP, enabling deeper integration with Hyperliquid’s on-chain financial architecture. USDH is expected to be deployed across both HyperEVM and HyperCore chains.
The firm argued that Hyperliquid’s next phase of growth requires institutional confidence and participation from consumer enterprises that want regulated access to blockchain systems. The company further stated that it intends to leverage its global enterprise distribution network to extend Hyperliquid adoption beyond crypto-native communities into traditional finance and fintech sectors.
The rewards structure is central to the design. Paxos confirmed that most yield from USDH reserves will be redirected to buy back HYPE, with redistribution across validators, builders, and users. This mechanism is intended to tie the stablecoin’s performance to ecosystem growth, while ensuring incentives are aligned across participants.
The firm’s track record in stablecoin issuance includes partnerships with Binance, PayPal, Kraken, Robinhood, and OKX. Paxos has managed a cumulative issuance volume of $160 billion across seven tokenized assets.