Paxos introduces USDH proposal, combining compliance, revenue-sharing, and HYPE buybacks to strengthen Hyperliquid’s growth.
Stablecoin issuer Paxos has submitted a proposal to launch USDH, a new digital asset built specifically for the Hyperliquid ecosystem. The company says the stablecoin will follow international compliance standards and include a revenue-sharing model to support Hyperliquid’s development. Most of the interest from reserves would be allocated to buying back HYPE, Hyperliquid’s native token.
Compliance and Global Issuance
Paxos announced that USDH would be issued under the Guiding and Establishing National Innovation for US Stablecoins Act, known as the GENIUS Act. It will also meet the requirements of the European Union’s Markets in Crypto-Assets regulation, known as MiCA. Paxos stated this ensures that USDH can operate across major markets with regulatory clarity.
Stablecoin company Paxos announced it has submitted a proposal to support Hyperliquid's launch of the USDH stablecoin. USDH issued by Paxos represents global distribution compliant with the GENIUS regulatory framework, with a revenue-sharing mechanism supporting HYPE, the…
— Wu Blockchain (@WuBlockchain) September 7, 2025
The company operates in regions such as the United States, European Union, Singapore, Abu Dhabi, and Latin America. With more than 70 financial partners already integrated, Paxos plans to use this network for distribution. The proposal also aims to make USDH suitable for institutions and fintech platforms looking for a compliant bridge to blockchain systems.
Paxos Labs, a newly formed division, will lead the project and oversee the launch. The company has also acquired Molecular Labs, which created key Hyperliquid products including LHYPE and WHLP. This acquisition, according to Paxos, provides deeper knowledge of Hyperliquid’s on-chain structure and tools.
Revenue Sharing and HYPE Buybacks
A central part of the proposal involves using the interest earned from USDH reserves to support the Hyperliquid ecosystem. Paxos said that 95% of the yield would go to repurchasing HYPE tokens, redistributing them to validators, builders, and users. This design is meant to align incentives within the network and encourage growth.
Proposal submitted: USDH powered by Paxos
USDH issued by Paxos would mean:
❏ Global issuance that is GENIUS compliant
❏ Revenue sharing that fuels HYPE, protocols and validators
❏ Regulatory clarity + global scale to match @HyperliquidX's explosive growthHyperliquid. pic.twitter.com/iKIFUOT0bQ
— Paxos (@Paxos) September 6, 2025
“We propose the launch of USDH, a Hyperliquid-first, fully compliant stablecoin purpose built to drive adoption, align incentives, and anchor the ecosystem’s next era of growth,” Paxos wrote in its announcement. The company added that USDH would have built-in mechanisms to share value with key stakeholders. This would include validators, protocols, and community members who contribute to the system.
Beyond the stablecoin, Paxos plans to integrate HYPE into its wider brokerage infrastructure. This infrastructure already supports major partners including PayPal, Venmo, and MercadoLibre. By linking HYPE with existing brokerage services, Paxos seeks to expand the token’s accessibility.
Hyperliquid Market Position and Expansion
Hyperliquid has become a major platform for decentralized perpetual futures trading. Data from DefiLlama shows the exchange processed nearly $400 billion in trading volume last month. The platform generated over $106 million in revenue, giving it a leading 70 percent share of the decentralized perpetual market.
This market share positions Hyperliquid as one of the largest decentralized exchanges in activity, behind only Uniswap and PancakeSwap in weekly trading volume. With USDH, Paxos aims to strengthen Hyperliquid’s ability to attract institutional traders and global users. By deploying USDH across both HyperEVM and HyperCore chains, the project intends to expand the platform’s reach.
The proposal reflects Paxos’s strategy of combining regulatory compliance with revenue models that support network growth. If approved, USDH could serve as a bridge between traditional finance and Hyperliquid’s decentralized infrastructure. The decision now rests with the Hyperliquid community and validators, who will review and consider the plan.
