Native Markets heavily favored on Polymarket to win bid to issue Hyperliquid’s USDH stablecoin

Native Markets is heavily favored to win the bid for Hyperliquid’s much-discussed stablecoin, USDH, according to Polymarket. Bettors are giving the startup around 92% odds of securing the partnership. 

These are the highest odds yet for Native Markets, co-founded by Max Fiege, a prominent early advocate, investor, and builder within the Hyperliquid ecosystem, as voting commitments are beginning to roll in on Thursday, providing an early look at who may ultimately issue the popular DEX’s native stablecoin.

The move also comes after the Hyperliquid team removed its staked HYPE tokens from validator weighting in the USDH vote on Thursday, theoretically giving greater control over the decision to community token holders. 

The Hyperliquid Foundation has pledged instead to “effectively abstain by voting for the team with the most non-Foundation votes based on validator commitments” as of Sept. 11. 

Validators will be able to cast votes on Sunday, according to the Hyperliquid Foundation. The winner will manage Hyperliquid’s $5.9 billion stablecoin reserve, which is currently dominated by Circle’s USDC, the platform’s largest trading pair.   

Hyperliquid, the largest decentralized derivatives exchange by a wide margin, said last Friday that it was looking to issue a “Hyperliquid-first, Hyperliquid-aligned, and compliant USD stablecoin,” and invited teams to submit proposals.

Before Ethena dropped out on Thursday, there were eight potential suitors, including Agora, Frax, Paxos, and Sky (formerly MakerDAO), alongside the aforementioned Native Markets. Other crypto infrastructure companies BitGo and OpenEden also jumped into the fray. 

“While some are complaining about [Native Markets’] lack of credibility I think their success here perfectly embodies everything which is so special about Hyperliquid and their community,” Ethena Labs founder Guy Young said on X, seemingly pushing back against controversy that Fiege had an unfair advantage. 

“It is a level playing field where emergent players can win the hearts of the community and are given a fair shot at succeeding,” Young added. 

According to Hyperliquid, Native Markets holds over 30% of the delegated stake, with the next-largest being Paxos, with 7.6% of the stake.

The USDH courtship over the last week has been rocked by controversy, with some onlookers commenting that potential issuers like Ethena and Paxos, which partnered with PayPal, submitted more attractive proposals. 

In its USDH bid, Paxos, the stablecoin issuer founded in 2018, offered MiCA and GENIUS Act compliance, native deployment on both HyperEVM and HyperCore, and a plan to use 95% of its reserve yield on HYPE buybacks.

Agora, the startup founded by Nick VanEck which recently raised $50 million in a Series A round and launched a white-labeled stablecoin product, also pledged to share “100% of net revenue” with Hyperliquid.

Notably, on Tuesday, Dragonfly co-founder Haseeb Qureshi said the process was “a bit of a farce,” arguing that it appeared like Hyperliquid insiders had already determined that Native Markets would win. 

Lilian Aliaga, chief operating officer and co-founder of OAK Research also suggested there might be “bias is at play,” when questioning how a relative new-comer like Native Markets could quickly submit a bid after Hyperliquid first opened the USDH RFP that garnered a majority of validator support. 

Native Market’s plan is also GENIUS compliant and said it would submit “a meaningful share of its reserve proceeds” to Hyperliquid’s Assistance Fund. The team includes MC Lader, former President and COO of Uniswap Labs, and blockchain researcher Anish Agnihotri.

Responding to the controversy over the past week, Native Market’s Fiege said “we don’t take the burden to prove ourselves lightly.”

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