Paxos announces PayPal collaboration update Hyperliquid USDH proposal, Ethena and Sky also join the battle.

As the competition for the selection of the issuance party of the on-chain Perptual Futures exchange Hyperliquid USDH stablecoin intensifies, Paxos has submitted a new proposal in strategic collaboration with PayPal and Venmo, while Ethena Labs and Sky have also officially joined the fray, making this governance vote one of the most closely watched contests in the encryption field.

Summary: The ambition of Hyperliquid's stablecoin USDH.

Hyperliquid announced a few days ago that it will launch its own stablecoin USDH, and the issuance party will be selected through on-chain governance voting. This will not only reduce dependence on USDC but also capture reserve interest income. Paxos, Frax Finance, Agora, and Ethena Labs have all expressed their intention to assist with the issuance.

(Hyperliquid will issue the stablecoin USDH? Paxos, Frax, Agora, Ethena are competing for it )

Paxos V2: Partnering with PayPal and Venmo to Create Enterprise-Grade Channels

In the latest version of the proposal, Paxos highlights its in-depth collaboration with PayPal and Venmo. Specifically, it includes:

Enterprise Integration: USDH will be integrated into PayPal's checkout and payment channels in the future, Venmo will also list HYPE and support USDH deposits and withdrawals. In the future, there will be efforts to integrate USDH or HyperEVM infrastructure with fintech companies and brokerages, and there is even hope to launch income products around USDH (Earn).

Profit Distribution: Before the USDH TVL reaches 1 billion USD, all profits will be invested in market expansion and assistance funds; subsequently, Paxos will only take 5% of profits ( to maintain a 95% revenue return ).

Compliance advantages: Emphasizes alignment with the "GENIUS" framework and is the only company legally able to issue tokens in Europe.

Incentives: PayPal has committed to providing $20 million in ecosystem incentives.

This proposal showcases Paxos' strategy of deep integration with traditional finance and payment giants, aiming to make USDH the gateway to global DeFi and stablecoins.

Ethena: USDtb support, tens of millions of dollars in incentives added.

At the same time, Ethena Labs, which has long expressed its intentions, has also made the proposal public, which specifically includes:

Asset backing: USDH will be fully backed by USDtb reserves, this stablecoin is linked to BlackRock's BUIDL fund and issued by the U.S.-licensed bank Anchorage Digital.

Revenue distribution: 95% of reserve earnings are returned to the Hyperliquid community to establish a "validator guardian network" to diversify risks.

Integrating advantages: Collaborating with Securitize to bring tokenized funds and stocks into HyperEVM, and planning to launch Hyperliquid's native synthetic dollar hUSDe.

Incentive Measures: Ethena plans to invest between 75 million and 150 million USD in funding incentives to promote the Hyperliquid ecosystem and cover the migration costs for converting USDC to USDH.

(MegaETH partners with Ethena to launch the USDm stablecoin: using revenue to subsidize L2 costs as a new business model)

Sky: Established stablecoin protocol, 100% profit sharing

Sky ( has joined the competition as the fourth largest stablecoin protocol in the world, with specific plans including:

Issuance Model: USDH will be minted in the form of DAI and USDS, supporting instant redemption liquidity with 2.2 billion USD in USDC.

Profit Distribution: USDH can yield a return of 4.85% on Hyperliquid, which is better than US Treasuries, and all of it will be used for HYPE buybacks.

Security Advantages: The circulation of USDS and the value of collateral exceeds ten billion USD, with seven years of no cybersecurity risk records, and it is the only stablecoin protocol with an S&P credit rating of )B-(.

Incentive measures: Plan to invest $25 million to create the "Hyperliquid Genesis Star" incubation program to kickstart DeFi projects in the ecosystem.

)S&P has given Sky Protocol a "B-" credit rating for the first time. Is the DeFi protocol destined to remain outside of traditional finance? (

The battle intensifies: Key choices of Hyperliquid

With Paxos, Ethena, and Sky taking action one after another, the issuance competition for Hyperliquid's USDH has fully escalated. As the proposal deadline approaches, attention is focused on who will win the rewards. The specific timeline is as follows:

9/10 10:00 UTC: Proposal submission deadline

9/11 10:00 UTC: Validator Stance

9/14 10:00 – 11:00 UTC: Voting Time

This vote will not only determine the issuance party of USDH, but will also influence the future positioning of Hyperliquid's perp dex and L1 network. Will it be enterprise collaboration, deep DeFi integration, or compliance-first? The answer will be revealed soon.

This article discusses the Paxos and PayPal collaboration update on the Hyperliquid USDH proposal, with Ethena and Sky also joining the fray. It first appeared in Chain News ABMedia.