Hyperliquid Launch USDH

Near-Zero Fees: Why It Matters

Hyperliquid’s latest update reduces spot trading commissions — including taker fees, maker rebates, and volume contributions — by ~80%. For arbitrage desks and high-frequency traders, this lowers operational costs almost to zero.

When fees drop, spreads tighten. That creates more efficient pricing, deeper liquidity, and reduced slippage for retail users. By offering fee structures closer to Binance or Coinbase, Hyperliquid directly challenges centralized venues on cost efficiency. For those unfamiliar with its design, the Hyperliquid ecosystem blends CEX-level speed with decentralized security, supported by its native HYPE token.

According to DeFi Llama data, Hyperliquid’s total value locked (TVL) surged from $317M in January to over $2.5B in September 2025, showing that the market is already rewarding this approach.

USDH: A Stablecoin Decided by Validators

Hyperliquid reserved the ticker USDH but left issuance open to competition. The decision will be made by on-chain validator voting, where each L1 validator casts transactions to support a proposal.

Even after winning, the chosen team must still compete in a gas auction to deploy USDH, ensuring there are no privileged issuers. This double-layered process strengthens transparency and avoids back-room deals.

The Contenders: Paxos, Frax, Agora/MoonPay, and Stripe

Four major bids emerged to issue USDH, each with different collateral models and approaches to yield distribution.

Paxos proposed backing USDH with short-term U.S. Treasuries, funneling the majority of the yield into buybacks of HYPE tokens. As a regulated U.S. issuer, Paxos brought strong compliance credentials to the table.

Frax Finance entered with a model collateralized by frxUSD, pledging to return 100% of earnings directly to users. Frax is already known in the industry for its algorithmic and partially collateralized stablecoin experiments, which added both credibility and caution to its bid.

Agora, in partnership with MoonPay, offered a fiat-reserve model built through white-label infrastructure. Nearly all of the generated yield would be used for HYPE buybacks, and the bid came with heavyweight backers including State Street and VanEck. MoonPay’s CEO Keith Grossman was especially vocal in supporting this proposal.

Finally, a Stripe-linked group called Native Markets proposed using Stripe’s Bridge platform. However, details around its collateral structure and yield use remained unclear, and critics quickly pointed out the potential conflict of interest in letting Stripe control a major stablecoin’s issuance.

That criticism was amplified by Agora CEO Nick van Eck (son of VanEck founder Jan van Eck), who argued that Stripe’s involvement could effectively hand control of Hyperliquid’s money supply to a rival blockchain operator. MoonPay’s Keith Grossman echoed the sentiment on X (Twitter), writing that “USDH deserves scale, credibility and alignment – not BS capture.”

Community Pushback Against Stripe

The Stripe-linked bid has become the most controversial. A CoinDesk report (Sept 8, 2025) revealed growing opposition from validators and community figures who view Stripe as a centralized threat.

Critics argue that outsourcing USDH to Stripe would compromise Hyperliquid’s independence, especially since Stripe recently launched its own stablecoin platform (Bridge). This raises direct competitive risks.

The debate underscores a broader theme: DeFi communities increasingly reject centralized corporate control, even when it promises capital efficiency.

Permissionless Token Creation with Staking & Slashing

Hyperliquid also announced that any user will soon be able to create spot-quoted assets without requiring approval. The rollout will begin on testnet before expanding to mainnet.

To prevent abuse, token creators will need to stake collateral. Misconduct — such as deploying fraudulent tokens — will trigger slashing of the staked funds.

This design borrows from Ethereum’s validator model and extends it to asset issuance, aiming to balance permissionless innovation with security guarantees.

Hyperliquid has already shown how powerful these experiments can be with the Hypurr NFT airdrop — 4,600 cat avatars that traded over $45M in a single day and cemented the platform’s reputation for viral, community-first launches.

Market Impact and Ecosystem Metrics

• Perp dominance: Hyperliquid controls ~80% of decentralized perpetuals volume, far surpassing rivals like dYdX and GMX.
• Trading activity: Roughly $378B was settled on-chain in August 2025, a record month.
• Token performance: The native HYPE token gained ~4% in the 24h following the fee-cut announcement.
• TVL growth: Capital inflows pushed TVL from $317M in Jan 2025 → $2.5B by September 2025.

These figures highlight Hyperliquid’s growing gravitational pull in DeFi. By aligning incentives through fees, governance, and staking, it is positioning itself as both a liquidity hub and governance experiment.

Key Takeaways

• Hyperliquid cut spot fees by ~80%, inviting HFTs and arbitrageurs.
• Validators will decide USDH issuance via on-chain voting and gas auctions.
• Leading proposals come from Paxos, Frax, Agora/MoonPay, and Stripe-linked Native Markets.
• Stripe’s involvement has triggered strong community resistance.
• Permissionless token creation is coming, secured by staking/slashing.
• With $378B monthly volume and 80% market share in perps, Hyperliquid is setting a new standard in decentralized exchange design.