Hyperliquid is gearing up for a governance-focused launch of its native stablecoin, USDH, in the upcoming network upgrade, as per a September 5 update on the DEX Discord channel.
The protocol introduced USDH as a “Hyperliquid-first and compliant” dollar-pegged asset, but with a twist – it is inviting competition among development teams for the launch process.
Interested teams are required to submit proposals for deploying the stablecoin. Upon approval by a validator quorum, the selected team must also win a gas auction before the deployment is live.
This move is poised to have a significant impact on existing stablecoin providers on Hyperliquid.
Omar Kanji, a partner at Dragonfly, expressed in a statement that this shift could heavily influence Circle’s USDC, which currently serves as the primary settlement currency for derivatives trading on Hyperliquid, with $5.5 billion in USDC deposits on the platform presently.
Kanji further mentioned that a full transition to USDH could potentially generate an additional $220 million in annualized revenue for HYPE token holders, assuming a 4% yield.
Additionally, Kanji pointed out that this transition would impact Circle’s revenues by a corresponding amount and result in a 7% reduction in USDC’s outstanding supply.
Other Planned Upgrade
Alongside the stablecoin launch, Hyperliquid is revamping its market structure to enhance trading efficiency.
The protocol confirmed that it will slash taker fees, maker rebates, and user volume contributions by 80% for spot pairs involving two quote assets.
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This adjustment aims to deepen liquidity on the DEX and reduce barriers for traders by cutting costs on a large scale.
Hyperliquid also intends to broaden access to spot quote assets by making them permissionless. This rollout will commence on the testnet and later include staking requirements and slashing penalties to uphold security.
Collectively, these measures are crafted to align user incentives while promoting decentralized participation in the exchange.
Hyperliquid’s Expansion
These planned updates coincide with Hyperliquid experiencing rapid growth on its trading platform.
According to DeFiLlama data, the DEX’s monthly trading volume surged to a new peak of around $400 billion in August, elevating its market share above 60%.
As activity flourishes on the platform, the governance token HYPE has followed suit.
The token has surged over 22% in the past month, hitting a record high of $51 before stabilizing around $47 at the time of writing, according to CryptoSlate data.
