12 September 2025

Some weeks are quiet, some weeks bring a twist. Bitcoin is hovering near $115K, Ethereum is steady at $4,300, but the real buzz is elsewhere. Hyperliquid’s HYPE token has come roaring back, thanks to a crowd of stablecoin giants lining up with offers. What began as a price rebound has turned into a bidding contest — and that’s where we pick up today.

Hyperliquid’s native token HYPE has been printing fresh highs almost every day this week. After languishing in the mid‑$40s earlier in the month, HYPE climbed back above $50, and has been consistently recording higher highs this week. Behind the price move is a potent mix of record trading activity, aggressive protocol buybacks, and an upcoming vote to decide who will issue USDH, Hyperliquid’s planned native stablecoin.

This week’s hot-take dissects the rally, the players vying for USDH, and what to watch as Hyperliquid charts its next leg higher.

Top-3 stories of the week:

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2

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The newsletter is put together by Giottus Crypto Platform. You can read all the previous issues of Cryptogram here.

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WEEKLY MACROS

• Total crypto market cap - $4.01 trillion - UP 4.2%    

• Bitcoin price - $115,359 - UP 1.81%

• The dollar index (DXY) - 97.64 - DOWN 0.4%

• Bitcoin Dominance - 58.1% -  DOWN 0.3%

• Crypto Fear and Greed Index - 57 - Market is in Greed

THE HOT TAKE

Why does Hyperliquid need a native stablecoin?

Most of the money moving through Hyperliquid is in outside stablecoins (USDC, USDT, ETC), with a total of approximately $5.6 billion, and roughly 95% of that is USDC (Circle). That creates three problems:

• Money leaves the ecosystem: All those USDC dollars are invested by Circle in things like U.S. Treasuries. The interest earned goes to Circle—not to Hyperliquid or its users—even though the activity happens on Hyperliquid.

• Control and freeze risk: USDC is a company-controlled dollar token. In extreme cases, Circle can freeze specific coins. Relying so heavily on a switch that someone else controls adds censorship risk to a platform that aims to be open and permissionless.

• Extra bridge risk: Using versions of stablecoins that move across chains can add technical risk. Although this is getting mitigated soon.

USDH Stablecoin announcement:

On September 5, 2025, Hyperliquid publicly announced that it would award its native “USDH” dollar token ticker to the outside issuer offering the best deal for the ecosystem. Within days, heavyweight bidders (Paxos, Frax, Sky/Maker, Ethena and others) published proposals that send 95–100% of USDH reserve interest back to Hyperliquid, primarily via open-market buybacks of HYPE.

Because Hyperliquid currently moves ~$400B in monthly derivatives volume, and generates hundreds of millions in revenue each month, and reportedly custodies ~$5–5.5B of USDC on the platform, the market quickly priced in ongoing, mechanical demand for HYPE if USDH launches—helping push HYPE to new highs (~$55 on Sept 9) as the bidding war and validator vote window opened.

Who’s competing to issue USDH (and what are they offering)?

Different teams proposed different designs. Here are the headline approaches, boiled down:

1. Paxos (regulated issuer behind PayPal’s PYUSD): Fiat-backed (T-Bills, repos). 95% of reserve interest to HYPE buybacks + ecosystem.

2. Ethena (issuer of USDe / USDtb): Synthetic dollar backed via USDtb (tied to BlackRock’s BUIDL). 95% of net revenue back to Hyperliquid; $75–150M incentives; cover migration costs; propose validator “guardian network” oversight.

3. Frax Finance (frxUSD): Community-first framing. 100% of Treasury yield passed through on-chain to Hyperliquid users (distributed per governance: buybacks, staking yield, trader rebates, etc.).

4. Sky (ex-MakerDAO, creator of DAI/USDS): Over-collateralized, DeFi-native model with 4.85% equivalent streamed to HYPE buybacks; offers $2.2B instant liquidity via its Peg Stability Module and a $25M “Hyperliquid Star” bootstrapping plan.

5. Agora (stablecoin infra backed by VanEck/partners): Fiat-backed with State Street custody & VanEck management; 100% of net revenue to HYPE buybacks / Assistance Fund; neutral, “white-label” approach.

6. Native Markets (Hyperliquid-aligned team using Stripe’s Bridge): 50% of interest to HYPE buybacks, 50% to growth funds; positioned as ecosystem-native; drew both support and concerns (possible reliance on Stripe’s infra).

Early Indication: With proposals now closed, the focus shifts to validator declarations. Expect the weights to stay fluid into Sunday’s final vote as HYPE stakers redelegate toward validators backing their preferred bid.

What does this mean for the HYPE token?

Most bidders say they’ll give 95–100% of that interest back to Hyperliquid, either to buy HYPE or to fund users and the community.

• If more interest goes to buying HYPE, that can strengthen $HYPE price.

• If more interest goes to users/incentives, that can grow USDH usage and liquidity, which again adds value to $HYPE.

In short, this is a win-win situation for Hyperliquid ecosystem and token holders.

Key Takeaway

Whatever the vote outcome, Hyperliquid has already won. The USDH process flipped the dynamic: top stablecoin issuers are lining up to plug into Hyperliquid’s flow, its liquidity, traders, and story and are publicly offering unusually high give-backs (buybacks, rebates, infra) to earn that spot. In plain terms, they need access to Hyperliquid more than Hyperliquid needs any single issuer. The vote will decide the name on the stablecoin, but the bigger shift is done: Hyperliquid just proved it can set the terms for how stablecoin value gets shared across its network.

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