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Stablecoin pioneer Paxos has unveiled plans to launch USDH — a fully regulated, dollar-pegged token created specifically for the Hyperliquid ecosystem. The initiative is designed not only to provide a compliant stablecoin option but also to channel nearly all reserve income back into the Hyperliquid community through HYPE token buybacks.
According to the proposal, 95% of the revenue generated from USDH reserves will be used to repurchase HYPE, Hyperliquid’s native token. The repurchased tokens will then be redistributed among users, validators, and partner protocols, creating a reward system that directly links stablecoin adoption to ecosystem growth. Paxos stated that this step is intended to “lay the foundation for the next era of Hyperliquid by aligning incentives for developers, traders, and institutions.”
Compliance and institutional reach
USDH is expected to meet the standards of both the U.S. GENIUS Act and Europe’s MiCA framework, ensuring broad regulatory oversight. The stablecoin will be launched on both HyperEVM and HyperCore, serving as a bridge between Hyperliquid and global banking systems.
Paxos highlighted its unique position in this market. Founded in 2012, the company has more than a decade of experience issuing regulated stablecoins, providing infrastructure for some of the industry’s largest projects, including Binance USD and PayPal USD. With over 70 partners across exchanges, fintech platforms, and custodians, Paxos plans to leverage this network to expand USDH distribution and integrate Hyperliquid into traditional financial systems.
Strengthening Hyperliquid’s position
Hyperliquid has quickly established itself as a leading platform in decentralized perpetual futures, recording nearly $400 billion in trading volume last month and capturing more than 70% of the market share in this sector. Paxos Labs — a newly created division of the company — has acquired Molecular Labs, the developer of Hyperliquid’s primitives LHYPE and WHLP, to ensure deep technical integration and long-term collaboration.
Beyond issuing the stablecoin, Paxos also plans to support HYPE as an asset within its brokerage infrastructure, which already powers crypto trading for platforms such as PayPal, Venmo, MercadoLibre, and Interactive Brokers. This could further expand institutional access to the Hyperliquid ecosystem.
Incentives for developers and users
The USDH framework echoes Hyperliquid’s existing revenue-sharing model. Participants such as application developers and validators will directly share in the value created by USDH adoption, reinforcing decentralized participation.
Paxos emphasized that the proposal is not only about issuing a stablecoin but also about embedding Hyperliquid more deeply into the global financial system. With compliance, distribution, and incentives aligned, USDH could become the backbone of Hyperliquid’s next growth phase.
Read also: NFT market matures under stronger global regulation frameworks
This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.
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