The company wants to launch USDH, a U.S. dollar–pegged token that would function as Hyperliquid’s flagship stablecoin while adhering to some of the toughest regulatory frameworks worldwide.
Instead of simply offering another dollar-backed token, Paxos has designed USDH with a built-in rewards engine. Nearly all of the interest earned on reserves — about 95% — would be used to repurchase HYPE, Hyperliquid’s native asset. Those tokens would then cycle back into the network, rewarding validators, developers, and active users. The mechanism, Paxos argues, would tie the stablecoin directly to Hyperliquid’s growth and strengthen incentives across its ecosystem.
The effort is being driven by Paxos Labs, a recently established branch of the company. To prepare, Paxos Labs acquired Molecular Labs, the team responsible for Hyperliquid primitives like LHYPE and WHLP. That purchase gives the new unit an insider’s view of Hyperliquid’s financial architecture and ensures it can design USDH to work seamlessly with both HyperEVM and HyperCore chains.
Paxos is pitching USDH not only as a tool for crypto-native users but as a bridge for traditional institutions. By ensuring compliance with both the proposed GENIUS Act in the U.S. and MiCA in Europe, Paxos aims to eliminate one of the biggest barriers holding back stablecoin adoption at scale: regulatory uncertainty.
The company is well-positioned to push USDH into the mainstream. Paxos already supports more than 70 financial institutions worldwide and powers crypto services for platforms like PayPal, Venmo, and MercadoLibre. With that distribution network in place, USDH could quickly find its way into both institutional desks and consumer-facing fintech platforms.
Beyond the stablecoin itself, Paxos has plans to embed HYPE into its broader brokerage and settlement infrastructure. This move could give Hyperliquid visibility far beyond its current user base, bringing its token and ecosystem into closer alignment with global finance.
If adopted, USDH would represent a new model for blockchain-native stablecoins — one that doesn’t just preserve value but actively recycles it back into the network that hosts it. For Hyperliquid, it could mark the beginning of its most ambitious growth phase yet.
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