What happened?
Paxos, a blockchain infrastructure provider, has submitted a proposal to issue USDH, Hyperliquid’s first native stablecoin. In a revenue-sharing model, Paxos promises to allocate 95% of any interest earnings from reserves toward HYPE token buybacks. The proposal comes as an attempt from Paxos to be selected as the validator for Hyperliquid’s upcoming native stablecoin launch, where the selection will be determined by on-chain validator consensus.
Who does this affect?
This primarily affects Paxos, Hyperliquid, and holders of the HYPE token. Hyperliquid, preparing to launch its native stablecoin, stands to benefit from Paxos’ acquired expertise due to its acquisition of Molecular Labs and its longstanding experience with stablecoins. HYPE token holders could benefit from the proposed revenue-sharing model as it increases the value of their tokens through buybacks. Paxos gains an opportunity to exert its influence and mark its position within the stablecoin space.
Why does this matter?
The proposal matters because it signifies a potential expansion of Paxos’ influence in the cryptocurrency market, especially in stablecoin operations. With an impressive track record of issuing stablecoins for big names like Binance, PayPal, Kraken, and others, Paxos’ potential involvement can bring added credibility and stability to Hyperliquid’s native stablecoin. Furthermore, the 95% revenue share for HYPE buybacks underlines a noteworthy commitment to reward users within the Hyperliquid ecosystem and stimulate activity and growth.