Ethena Labs Withdraws from USDH Stablecoin Race: A Community-Driven Decision
In a surprising development, Ethena Labs recently announced its withdrawal from the Hyperliquid USDH stablecoin contest. This move comes amidst growing feedback from validators and community members who raised concerns about Ethena’s role within the Hyperliquid ecosystem. The decision was confirmed by Ethena’s founder, Guy Young, who emphasized their commitment to community ethos and product innovation.
Why Did Ethena Step Back?
Ethena Labs had positioned itself as a strong contender, offering to back the USDH stablecoin with USDtb, a token tied to BlackRock’s BUIDL fund and secured by Anchorage Digital Bank. The proposal included ambitious commitments such as returning 95% of reserve earnings to the Hyperliquid community and injecting over $75 million in incentives. Despite these advantages, feedback from validators highlighted concerns about Ethena’s broader ambitions beyond the Hyperliquid ecosystem.
“Rather than push back against the community’s concerns, we chose to step aside in the spirit of collaboration,” Young stated. Ethena’s departure clears the path for other strong contenders, including Native Markets, which has quickly gained momentum in the USDH race.
What’s Next for Ethena Labs?
While leaving the stablecoin race, Ethena is far from retreating from the Hyperliquid ecosystem entirely. The company plans to focus on other innovative products, including its synthetic dollar (hUSDe), USDe-powered savings and card products, and sophisticated hedging flows for Hyperliquid markets. Additionally, Ethena plans to explore new opportunities under HIP-3, such as reward-bearing collateral and modular prime broking solutions.
“We will do what we have always done since day one: outcompete everyone else on product regardless,” Young assured the community in a statement shared via X.
The Race to Develop Hyperliquid’s USDH
The USDH stablecoin, designed as a native digital dollar for Hyperliquid users, has attracted heavyweights such as Native Markets, Agora, Sky (formerly MakerDAO), Frax Finance, and Paxos. Each team is pitching unique strategies combining institutional backing, compliance, and mechanisms to share revenue with the community. The departure of Ethena Labs has further heightened interest in the competition.
How to Keep Up with the Latest in Crypto
For those closely monitoring crypto innovations like Ethena Labs, it’s crucial to stay informed. From stablecoins to synthetic assets, the blockchain space is evolving rapidly. To enhance your crypto insights, consider using tools like Coinbase for trading and tracking tokens or exploring Kraken, which provides in-depth market analysis and professional-grade trading features.
Stay tuned as the Hyperliquid USDH stablecoin race unfolds, and explore opportunities to engage with cutting-edge blockchain ecosystems as they redefine the digital economy.
