HYPE hits new all-time high amid Hyperliquid's USDH stablecoin saga

Hyperliquid (HYPE) reached a record high of $51.92 on Monday, driven by anticipation surrounding validators' votes on its USDH stablecoin ticker and growing competition among firms seeking to launch the dollar-denominated token.

HYPE surges to new all-time high amid rising stablecoin competition

Hyperliquid has stepped up plans for a stablecoin launch, with validators set to vote on its USDH ticker on September 14, according to a statement by the Hyperliquid Foundation on Discord.

The decentralized exchange (DEX) noted that USDH will not "gain any special privileges by reason of its ticker name." The Hyperliquid Foundation noted that the introduction of USDH does not pose a threat to the current supply of other stablecoins on its network, including USDC, which currently dominates stablecoin supply on the Layer-1 network.

The announcement comes barely a few days after the Foundation disclosed a network upgrade to Hyperliquid's spot trading infrastructure. The upgrade aims to improve liquidity, reduce user friction, lower taker fees, decrease maker rebates and user volume contribution by 80%.

In line with the upgrade, the Hyperliquid Foundation stated that it is welcoming proposals that are "Hyperliquid-first," "Hyperliquid-aligned," and USD-compliant from various teams looking to deploy USDH. Interested teams are to submit proposals for the stablecoin by Wednesday, after which it will be subject to validator approval.

Several companies and protocols have begun releasing proposals for USDH, with Paxos, Frax and Agora emerging as the three prominent choices. Each of these companies has suggested separate approaches to deploying the stablecoin.

Paxos mentioned in its proposal that it would generate a revenue model that directs 95% of interest to HYPE buybacks. The proposal also included compliance with MiCA and the GENIUS Act, as well as native deployment on both HyperEVM and HyperCore.

Agora, on the other hand, is assembling a coalition to support its bid, outlining a USDH model built on its institutional stablecoin infrastructure, Rain's global card, on/off-ramp network and LayerZero's interoperability. As part of the proposal, Agora committed to directing all net revenue to Hyperliquid, either through contributions to the platform's Assistance Fund or via HYPE token buybacks. It has also added the real-world asset (RWA) tokenization platform Centrifuge to its coalition.

Furthermore, Frax submitted a proposal to back USDH one-to-one with frxUSD, which is itself supported by BlackRock's yield-bearing BUIDL on-chain treasury fund. The proposal includes plans to distribute all underlying treasury yields to Hyperliquid users, with no share retained by Frax.

HYPE surged to a new all-time high following the developments, rising to $51.92 before retracing to $50.10 at the time of publication, up over 7% in the past 24 hours, according to Binance data.

HYPE/USDT daily chart

Meanwhile, Nasdaq-listed Lion Group Holding (LGHL), operator of an all-in-one trading platform, revealed plans to convert all of its Solana (SOL) and Sui (SUI) holdings into Hyperliquid (HYPE), according to a statement on Monday.

The move comes on the heels of BitGo Trust's launch of an institutional HYPE Ethereum Virtual Machine (EVM) custody service in the US. It is also intended to optimize Lion Group's crypto portfolio by tapping into Hyperliquid's Layer 1 blockchain and decentralized perpetual futures exchange.