Paxos has updated its proposal for the USDH stablecoin to include support from PayPal and Venmo. This move aims to enhance the Hyperliquid ecosystem.
Support from PayPal
In its update, Paxos announced that PayPal has committed to supporting the Hyperliquid ecosystem, including listing the HYPE token and providing free on- and off-ramps for the USDH stablecoin. Additionally, PayPal has allocated $20 million for incentives for HYPE and will integrate USDH into its payment apps, Venmo and Xoom.
Incentive Structure
After reaching $1 billion in total value locked (TVL), Paxos will start earning 1% of the fees, increasing up to 5% at a TVL of $5 billion or more. Initially, up to 80% of the funds will be directed towards ecosystem development, which will later decrease to 25%.
Competition for USDH
This update comes amid competition among companies to issue the USDH stablecoin. Recently, several crypto firms including MoonPay and Agora submitted a joint proposal, opposing an initiative linked to financial giant Stripe. Ethena Labs also entered the race as a candidate for USDH, proposing to back the stablecoin with BlackRock's BUIDL fund.
The updated Paxos proposal for the USDH stablecoin with the backing of major financial players like PayPal marks a new phase in the development of the Hyperliquid ecosystem and competition in the stablecoin market.
