Paxos has announced the launch of USDH, a U.S. dollar-pegged stablecoin that will serve as a key asset for the Hyperliquid ecosystem.
Concept of USDH
USDH will not just be another dollar-backed token; Paxos has designed it with a built-in rewards mechanism. About 95% of the interest earned on reserves will be used to repurchase HYPE, Hyperliquid’s native asset. This mechanism, Paxos argues, will tie the stablecoin directly to Hyperliquid’s growth and strengthen incentives across its ecosystem.
New Structure of Paxos Labs
The initiative to launch USDH is driven by Paxos Labs, a recently established branch of the company. To prepare, Paxos Labs acquired Molecular Labs, the team responsible for Hyperliquid primitives like LHYPE and WHLP. That purchase gives the new unit an insider’s view of Hyperliquid’s financial architecture and ensures it can design USDH to work seamlessly with both HyperEVM and HyperCore.
Potential for Traditional Institutions
Paxos is pitching USDH not only as a tool for crypto-native users but as a bridge for traditional institutions. By ensuring compliance with both the proposed GENIUS Act in the U.S. and MiCA in Europe, Paxos aims to eliminate one of the biggest barriers holding back stablecoin adoption at scale: regulatory uncertainty.
USDH could reshape the approach to stablecoins in the blockchain space. It represents not just value preservation but an active recycling of resources back into the Hyperliquid ecosystem, potentially marking the beginning of a new growth phase for the project.
