So there’s this crazy battle going down on Hyperliquid right now, and honestly, it’s way more interesting than it sounds. They’re basically fighting over who gets to create their first native stablecoin (ticker: USDH), and the underdog is absolutely destroying the “obvious” choice.

Let me break this down for you.

Wait, What’s USDH and Why Should I Care?

Okay, so you know how Hyperliquid is crushing it as a derivatives platform, right? But here’s the thing: they’re still using “outsider” stablecoins like USDC for most trading. That means all the juicy yield from those reserves goes to Circle and other external companies instead of back to the Hyperliquid community.

USDH changes that game completely. If Hyperliquid has its own stablecoin, all that yield can flow back into the ecosystem. Think HYPE token buybacks, better incentives, the whole nine yards. It’s basically like keeping the profits in the family instead of sending them to your competitors.

Pretty smart, right?

The “Boring” Choice: Paxos

So when Hyperliquid opened this up to bidders, everyone expected Paxos to win easily. And honestly? On paper, they make total sense:

• They’ve done this before (hello, PYUSD)
• They’re regulated up the wazoo
• They’ve got the boring institutional credibility that makes lawyers happy
• Zero chance of weird regulatory drama

If you wanted to play it safe and sleep well at night, Paxos was the obvious pick. But here’s where it gets interesting…

The Dark Horse: Native Markets

Enter Native Markets: basically the scrappy startup going up against the corporate giant. And guess what? They’re absolutely crushing it in the validator votes.

Why? Because they’re playing a completely different game:

They’re all-in on Hyperliquid. While Paxos would treat this as just another client, Native Markets is positioning themselves as true believers in the ecosystem. They’re promising to funnel everything back into HYPE buybacks and community rewards.

The vibes are immaculate. Sometimes in crypto, narrative beats everything else. And the story of “community-first native builder vs. big corporate player” is just hitting different right now.

Early momentum snowballed. Once a few key validators backed them, others jumped on the bandwagon. Classic crypto momentum play.

The Real Talk: What Are the Trade-Offs?

Look, I’m not gonna sugarcoat this. There are real pros and cons here:

If Paxos wins: You get boring reliability, regulatory safety, and probably zero drama. But also zero innovation and minimal ecosystem benefits.

If Native Markets wins: You get tight tokenomics, community alignment, and that startup energy everyone loves. But you’re also betting on a relative newcomer handling billions in reserves.

Where We’re At Now

The vote closes September 14th, and prediction markets are showing Native Markets with like 90%+ odds. It’s not even close at this point.

If I’m being honest? I think this says a lot about where Hyperliquid’s head is at as a community. They’re choosing growth and alignment over safety and predictability. Classic crypto move - high risk, high reward.

My Take

This whole thing is fascinating because it’s not really about stablecoins. It’s about what kind of ecosystem Hyperliquid wants to be. Do they want to play it safe with traditional partners, or do they want to bet on themselves and their community?

Right now, it’s pretty clear they’re choosing themselves.

Whether that’s brilliant or reckless… well, we’ll find out soon enough. But man, you’ve gotta respect the conviction.

Native Markets better deliver though, because if they fumble this, it’s going to be ugly.