Ethena Labs has proposed to become the issuer of Hyperliquid’s USDH stablecoin. The proposal, with the backing of BlackRock’s fund, emphasizes transparency and ecosystem benefits, offering significant revenue returns to the Hyperliquid ecosystem.

Ethena, supported by BlackRock and Anchorage Digital, aims to integrate USDH firmly within Hyperliquid’s ecosystem. This move challenges other stablecoin issuers by promising competitive incentives and robust system safeguards.

We are excited to enable Ethena’s USDtb, which is 100% backed by BUIDL and uniquely positioned to offer institutional grade cash management as well as on-chain liquidity to Hyperliquid users. – Robert Mitchnick, Head of Digital Assets, BlackRock, source

The proposal pledges at least 95% of net revenue from USDH reserves back to the Hyperliquid ecosystem. As per Ethena’s statement, the funds primarily support HYPE token buybacks and ecosystem investment.

Initial reactions suggest a potential rise in Hyperliquid’s trading volume and total value locked, similar to past native stablecoin adoptions. BlackRock’s involvement highlights possible significant market and institutional impacts.

Past stablecoin integrations, like the adoption of DAI and USDT, have shown increased protocol TVL and market confidence. Ethena’s proposal, backed by BlackRock, may parallel these historical precedents in market growth.

Experts suggest Ethena’s proposal could shift liquidity from traditional stablecoins to USDH if approved. Ethena’s model fosters risk diversification through its guardian network and institutional backing.