- Paxos’ USDH proposal includes PayPal and Venmo integration plus $20M in incentives.
- All revenue will be reinvested until USDH hits $1B TVL, with long-term revenue capped at 5%.
- Competition is fierce, with Frax, Agora, LayerZero, Ethena, and Sky also submitting proposals.
Paxos Labs has rolled out an updated proposal to become the official issuer of Hyperliquid’s USDH stablecoin, placing PayPal and Venmo integration at the center of its pitch. The plan would allow USDH to be used directly in PayPal’s checkout system, with Venmo support and zero-cost on/off ramps. PayPal is also committing $20 million in incentives to accelerate adoption, signaling one of the largest mainstream pushes yet for a Hyperliquid-aligned stablecoin.
Revenue Model and Incentives for Growth
Under the proposal, Paxos promises that all revenue from USDH will be reinvested into Hyperliquid until total value locked (TVL) surpasses $1 billion. Beyond that, Paxos pledges to cap its revenue share at just 5%, even if TVL climbs beyond $5 billion. To strengthen reserves, the firm also plans to include PayPal’s PYUSD stablecoin, bolstering USDH’s compliance and legal standing under the GENIUS Act. Paxos emphasized that this framework ensures “Paxos only wins if Hyperliquid wins.”
Competition Among Proposals Heats Up
The fight for USDH issuance has attracted major players. Frax Finance has pitched backing USDH with frxUSD supported by BlackRock’s BUIDL fund. Another consortium of Agora, Rain, and LayerZero has pledged to give up all net revenue, promising neutrality. Proposals from Ethena Labs and Sky are also in contention, reflecting the high stakes ahead of validator voting set for September 14.
Broader Stablecoin Context
The proposal arrives just as the U.S. advances its stablecoin agenda. The GENIUS Act, signed by President Trump, pushes for dollar-pegged stablecoins to reinforce global dollar dominance. With projections that the stablecoin market could top $2 trillion by 2028, USDH is being positioned as a default DeFi stablecoin with enterprise use cases, from brokerage integration to consumer-facing “Earn” products. If approved, Paxos’ plan could give Hyperliquid a critical edge in the next wave of stablecoin growth.
