Ethena Labs drops from contest to issue Hyperliquid's USDH stablecoin

Ethena, a DeFi protocol based on the Ethereum blockchain, has formally withdrawn its proposal from the Hyperliquid ahead of the upcoming vote, citing community ￰0￱ project team acknowledged concerns regarding its non-native nature to ￰1￱ Ethereum-based protocol’s decision followed a series of active discussions between the project team, validators, and the community, which raised several concerns about its alignment with Hyperliquid’s ￰2￱ key things were picked from the discussion, including Ethena not being a Hyperliquid-native project, it operates additional product lines outside its USDH stablecoin , and its ambitious extension beyond a single ￰3￱ Markets wins community support over Ethena Guy Young, founder of Ethena, acknowledged that the community’s concerns were valid, and they accepted the ￰4￱ confirmed that they were stepping down to allow validators to direct their support to something ￰5￱ also extended congratulations to the Native Markets project, which secured the community’s ￰6￱ last few days have been incredible to witness.

I've never seen a community rally around and engage with passion like this ￰7￱ direct discussions with individuals in the community and validators we have taken onboard some of the concerns, namely: -Ethena is not… — G | Ethena (@gdog97_) September 11, 2025 Ethena acknowledged that Native Markets’ success showed the ethos of the Hyperliquid community, where emerging players can gain trust and traction regardless of size, background, and financial ￰8￱ firm defended Native Markets’ credibility, which had received criticism over questions of ￰9￱ Ethereum-based protocol message showed that Native Markets’ platform-level playing field allows any project to win community support when it shows vision and ￰10￱ expressed gratitude towards those who supported its proposal , describing it as a privilege and a testament to the growing quality of teams in the ￰11￱ also acknowledged other teams’ proposals as further proof of the ecosystem’s rising ￰12￱ Ethena project team reiterated that the company roadmap remains unchanged, emphasizing that it will continue to build new products in collaboration with native ￰13￱ the previous plan, Ethena downplayed the role of T-bill yields, stressing that taking small returns in a declining interest rate environment was the least interesting part of its ￰14￱ team, however, reiterated its focus on building advanced products and infrastructure to strengthen Hyperliquid.

“We are simply going to do everything we said we would; we will be putting our full force behind making that a success, despite the outcome here.” -Guy Young, founder of Ethena The Ethereum-based protocol reaffirmed its competitive stance in the market and promised to continue striving to outpace rivals through product innovation. Ethena’s USDe hits $13.12B market cap, maintaining third position USDe, Ethena’s stablecoin, has increased its market cap to $13.12 billion, with a circulating supply of 13.19 billion ￰15￱ stablecoin has maintained position three against other issuers behind Tether USDT and USDC by market ￰16￱ USDT leads with a circulating supply of approximately 169 billion USDT, followed by USDC’s approximately 72 billion.

However, not everyone is convinced of Ethena’s ￰17￱ reported recently that the S&P Global flagged USDe as carrying higher risk scores due to its dependence on ￰18￱ Labs also raised concerns over possible rehypothecation and liquidity strains if funding rates go outside the normal ￰19￱ uses strategies that combine stablecoin issuance with DeFi yield ￰20￱ on-chain protocols, such as Aave and Pendle, have enabled recursive lending, which increases returns for issuers like ￰21￱ allows users to deposit USDe, borrow against it, and redeploy the proceeds into additional yield-generating positions, compounding the proceeds. Hyperliquid’s token HYPE on the other hand has recorded a price increase of 3.52% today, trading at $56.25.

It has a market cap of 18.78 billion with a 24-hour trading volume of approximately $614 ￰22￱ token has a circulating supply of 333.92 million HYPE according to CoinMarketCap ￰23￱ you're reading this, you’re already ￰24￱ there with our newsletter .