What is USDH (USDH)?

Deep Dive

1. Purpose & Value Proposition

USDH aims to anchor Hyperliquid’s financial ecosystem by replacing external stablecoins (e.g., USDC) and retaining yield generated from reserves within the platform. Its design focuses on:
- Reducing Dependency: By minting USDH natively on Hyperliquid’s HyperEVM, users avoid cross-chain bridging risks.
- Yield Recycling: Half of the reserve income (from assets like U.S. Treasuries) flows to Hyperliquid’s Assistance Fund for HYPE buybacks, creating a deflationary mechanism for the platform’s governance token.

2. Technology & Compliance

• Reserve Structure: Combines off-chain holdings (custodied by BlackRock) and on-chain tokenized assets (e.g., Superstate’s USTB) for real-time auditability.
• GENIUS-Ready: Built to comply with the U.S. GENIUS Act framework, ensuring regulatory alignment through partnerships with licensed entities like Bridge (a Stripe subsidiary).
• CoreRouter: A proprietary smart contract enabling atomic minting and transfers between HyperEVM and HyperCore, enhancing interoperability.

3. Ecosystem Integration

• Aligned Quote Asset (AQA): Markets quoted in USDH offer 20% lower taker fees and +50% maker rebates, incentivizing adoption.
• DeFi Expansion: Integrated into lending protocols like Felix Vanilla and paired with assets like KNTQ, USDH acts as a liquidity hub for Hyperliquid’s growing DeFi stack.

Conclusion

USDH is Hyperliquid’s answer to self-sovereign liquidity—a stablecoin optimized for its ecosystem’s trading, compliance, and value-sharing needs. By prioritizing Hyperliquid-native infrastructure and community incentives, it aims to become the backbone of onchain finance. Could USDH’s yield-sharing model set a new standard for decentralized stablecoins?