What happened?
Ethena Labs has withdrawn its proposal to issue Hyperliquid’s USDH stablecoin due to strong opposition from the community and ecosystem validators. This decision was announced by founder Guy Young and comes amidst a high-stakes competition among several major players for the role of USDH issuer. Paxos is now emerging as a leading contender with a PayPal-backed proposal and strong appeal to validators.
Who does this affect?
The withdrawal of Ethena Labs’ proposal impacts both the company and the larger Hyperliquid ecosystem. The move appears to clear a path for another contender, Native Markets, whose grassroots support has been rapidly growing. This also affects Paxos and other significant players vying for the role of USDH issuer.
Why does this matter?
This matters because it represents a notable shift in the competition around USDH issuance. The withdrawal of Ethena Labs may affect the dynamics of the market and open possibilities for other players. The impact on the Hyperliquid ecosystem could be significant, with possible effects on the rollout of new products and the growth of Hyperliquid’s stablecoin market.