A stablecoin bidding war on one of crypto’s fastest-growing platforms is offering a preview of the industry’s next phase — and who might control it.
The contest played out on Hyperliquid, a fast-growing trading platform. The prize: the right to issue USDH, a new dollar-pegged token native to its network. The bidding involved key names in the world of crypto payments: Paxos, Agora, Ethena and the lesser-known Native Markets, a startup partnered up with Stripe Inc.’s stablecoin arm, Bridge.
The outcome offered a glimpse of the competitive jostling expected among retailers, exchanges and financial players, all vying to launch tokens of their own. Over the weekend, Hyperliquid’s network of contributors, known as validators, awarded the contract to Native Markets. Despite being a newly formed project, its partnership with Stripe helped it edge out bids from longer-standing firms that had pledged to forgo nearly all revenue to win the deal.
Stablecoins have long been the quiet plumbing of decentralized finance, used to post collateral, settle trades and move money between applications. Some issuers create and manage their own tokens, while others do so on behalf of third-parties. Paxos, for example, issues PayPal Inc.’s PYUSD coin. Early stablecoin architecture was scrappy and grassroots, governed by open-source communities. But the new wave is arriving with institutional sponsors, distribution smarts and regulatory positioning.
“Every stablecoin issuer is extremely desperate for supply,” said Zaheer Ebtikar, co-founder of crypto fund 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.”
Interest Income
The Hyperliquid contest offered a public look at just how cutthroat this new market is becoming. Paxos offered to collect no revenue until USDH reached a $1 billion market cap. Agora proposed sharing 100% of net revenue with Hyperliquid. Ethena offered 95%. All of it was aimed at winning over validators — who operate the software that secures Hyperliquid’s network and vote on key decisions.
The contest wasn’t just about bragging rights, but the economics of survival. Stablecoin issuers don’t simply mint digital dollars; they earn interest on the assets backing those coins. Circle Internet Group Inc., which issues USDC, shares that revenue with Coinbase Global Inc. under a deal that helps both firms weather market volatility. With interest rates expected to fall this week, growing market share has become even more urgent.
That’s what made Hyperliquid’s contract so valuable, and why Stripe’s recent success is drawing attention. These bidding wars are likely to become more common as decentralized platforms build their own stablecoins — and choose partners to issue them.
“You’re going to see more competition, that’s definitely going to happen,” said John Todaro, senior research analyst at Needham & Company. “But it’s still a big lift to go from getting into the space to building liquidity and integration across all these different DeFi platforms.”
Stripe’s Inroads
Since acquiring Bridge for $1.1 billion earlier this year, Stripe has gained serious ground in crypto’s financial infrastructure. It announced a new blockchain, Tempo, in partnership with crypto venture firm Paradigm, and has secured integrations from wallets to exchanges. Now, its stablecoin venture is winning native token contracts on the sector’s most promising venues.
Read more: Stripe Confirms Plans to Acquire Stablecoin Platform Bridge
That success has put a target on its back. Agora’s co-founder Nick van Eck warned that handing a network’s primary stablecoin to a “vertically integrated issuer with clear conflicts” would betray decentralization ideals.
Another point of difference between the bidders is regulatory structure. While Bridge holds money transmitter licenses in 30 states, Paxos operates under a New York trust charter and is seeking a federal OCC license. Native Markets in a blog post said it considered a range of factors in selecting an issuer, including the pace of deployment and regulatory flexibility. In its proposal, the team pointed to potential challenges that can arise when working with certain state-regulated partners.
Fears Overblown
USDC remains the dominant coin on Hyperliquid, with more than $5.6 billion in deposits, blockchain data shows. But the emergence of a native stablecoin could begin shifting trading flows — and the economics of who profits from them.
“Companies like Paxos see the growth potential of Hyperliquid as an exchange and really as a financial platform,” said Bhau Kotecha, co-founder of Paxos Labs. “So being a part of that and helping that ecosystem grow is important to us.”
Stripe and Native Markets declined to comment further on the bidding process. “It has been encouraging to see the extent to which the community engaged with teams’ proposals for the USDH ticker for a Hyperliquid-first, Hyperliquid-aligned, compliant, and natively minted USD stablecoin,” a Hyperliquid spokesperson said.
A Circle spokesperson said in a statement that the vote wouldn’t impact USDC’s status as Hyperliquid’s top stablecoin, while CEO Jeremy Allaire shrugged off the competition. “Happy to see others purchase new USD tickers and compete,” he wrote on X.
Some analysts say fears of a centralization may be overblown. “From all indications thus far Hyperliquid will try to remain neutral in terms of available stablecoins,” said Todaro.
Still, the battle over USDH marks a shift — where branding, partnerships, and business strategy increasingly matter as much as code.
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