Sky Joins USDH Stablecoin Bidding War as Fifth Major Protocol

Sky Protocol joined the intensifying competition to issue Hyperliquid’s USDH stablecoin as the fifth major bidder, promising 4.85% yields and $25 million in ecosystem development funding while facing pushback against frontrunner Stripe’s Bridge proposal. Co-founder Rune Christensen submitted Sky’s comprehensive proposal offering access to $2.2 billion in instant USDC liquidity through existing infrastructure backing $8 billion in USDS and DAI ￰1￱ protocol promises GENIUS Act compliance, customization, and native multichain deployment via ￰2￱ powered by Sky The best stablecoin offers so much more than just a stable medium of exchange – it should also deliver highly efficient returns, generated by actively developing, building and growing the ecosystem it lives ￰3￱ using Sky to power USDH, the Hyperliquid… — Rune (@RuneKek) September 8, 2025 Coalition Forms Against Stripe Dominance The bidding war escalated following Hyperliquid’s Friday announcement seeking proposals for a “Hyperliquid-first, Hyperliquid-aligned, and compliant USD stablecoin.” Native Markets submitted the initial proposal partnering with Stripe’s Bridge payment processor for USDH ￰4￱ CEO Nick Van Eck mounted fierce opposition to the Stripe proposal, warning against relinquishing canonical stablecoin control to a “vertically integrated issuer with clear conflicts.” He cited Stripe’s planned Tempo blockchain as creating potential user migration risks away from ￰5￱ joined Agora’s coalition, with president Keith Grossman announcing regulated payment rails ￰6￱ partner Rob Hadick endorsed the MoonPay addition as creating the “unarguable best” proposal for USDH ￰7￱ CEO Jan van Eck appealed directly to the Hyperliquid community, supporting his son Nick’s Agora ￰8￱ Hyperliquid community, We are impressed by your product, the technology, the decentralized governance, and the method of your ￰9￱ we think we can be part of a trusted, compliant ￰10￱ provide research to the community, for free, in an effort to be… — Jan van Eck (@JanvanEck3) September 8, 2025 He emphasized the firm’s bullish Hyperliquid research and multi-month token holdings while warning against being “gang-tackled” in proposal ￰11￱ also submitted competing proposals promising 95% of interest earnings toward HYPE buybacks , leveraging the acquisition of Molecular Labs for a native ecosystem ￰12￱ Protocol offered returning all USDH earnings to the community through frxUSD backing.

Sky’s Infrastructure Advantage and Yield Strategy Sky’s proposal leverages the protocol’s proven seven-year security track record, managing over $8 billion across USDS and DAI without losses to stablecoin ￰13￱ to the protocol, the infrastructure has survived multiple crypto cycles while building Lindy effects through continuous ￰14￱ protocol offers 4.85% returns on all USDH held on Hyperliquid, exceeding current Treasury bill rates through diversified collateral ￰15￱ would inherit technical architecture identical to DAI and USDS tokens, providing immediate access to Peg Stability Module liquidity totaling $2.2 billion in ￰16￱ system enables large-scale off-chain redemptions through websites including spark.

fi, sky. money, and ￰17￱ proposal claimed there would be native conversion capabilities between USDH and sUSDS, providing unlimited access to Sky Savings Rate yields currently at 4.75%. The multichain deployment through LayerZero enables Sky’s $8 billion collateral portfolio deployment directly on Hyperliquid with low risk ￰18￱ committed $25 million for Hyperliquid Genesis Star creation, an autonomous project designed to bootstrap massive DeFi ecosystem ￰19￱ model follows Spark’s success in achieving $1.2 billion total value locked through exclusive token farming ￰20￱ protocol plans to relocate its $250 million annual buyback system from Uniswap to Hyperliquid, currently using $36 million yearly for SKY token purchases, with plans to increase to $150 million ￰21￱ migration would establish Hyperliquid as the standard for protocol token buybacks.

Hyperliquid’s Record Performance Drives Stablecoin Demand According to a Cryptonews report earlier this month, Hyperliquid’s August revenue reached $106 million from perpetual futures trading, marking 23% growth while capturing 70% DeFi perpetuals market ￰22￱ trading volume hit $383 billion with $1.25 billion annualized revenue despite operating with just 11 ￰23￱ activity peaked at $29 billion daily volume, generating $7.7 million in ￰24￱ smashes revenue record with $106M in August, dominating 70% of the DeFi perps market as lean 11-employee team outperforms financial giants. #HyperLiquid #DeFi ￰0￱ — ￰25￱ (@cryptonews) September 2, 2025 Total value locked climbed from $230.48 million in April to $762.57 million currently, while cumulative perpetual futures volume reached $2.57 ￰26￱ exchange outpaced Robinhood for three consecutive months in trading ￰27￱ token maintains strong performance at current levels near $47, gaining over 400% since April, with Arthur Hayes projecting potential 126x returns by 2028.

Hayes’ thesis assumes a stablecoin supply reaching $10 trillion while Hyperliquid becomes the largest crypto trading ￰28￱ adoption accelerated through Anchorage Digital custody services and Circle’s native USDC ￰29￱ lean operational model relies on automation replacing traditional finance departments for settlement, reconciliation, and compliance ￰30￱ forward, Sky has voiced commitment to Hyperliquid ecosystem development regardless of vote outcomes, citing natural alignment between projects focusing on real profits and useful decentralized infrastructure.