Native Markets is an American decentralized finance (DeFi) company that designed USDH, a U.S. dollar-pegged stablecoin. USDH serves as the native stablecoin for the Hyperliquid decentralized perpetuals exchange, created to internalize yield generated from stablecoin reserves within the Hyperliquid ecosystem and reduce the platform's reliance on external, bridged stablecoins such as USDC. ^{[1] [2]}​

Overview

Native Markets was established with the primary purpose of issuing and managing Hyperliquid's native stablecoin, USDH. The project's core mission is to create an "Aligned Quote Asset" (AQA) for the exchange, which contractually shares revenue with the Hyperliquid protocol. This model aims to create a self-sustaining economic loop where the growth of the stablecoin directly contributes to the value of the exchange’s ecosystem, primarily through buybacks of its native HYPE token. ^{[1] [3]}​

The company's proposal was selected by Hyperliquid's community and validators for its "Hyperliquid-first" approach. This strategy prioritized native issuance directly on Hyperliquid's Layer 1 (HyperEVM) to avoid cross-chain friction, emphasized on-chain enforceable yield-sharing mechanisms over trust-based agreements, and proposed an issuer-agnostic architecture to enhance platform sovereignty. By migrating Hyperliquid's substantial stablecoin deposits to USDH, the project aimed to capture significant revenue that would otherwise go to external issuers. Projections from September 2025 estimated that migrating the existing 200 million in annual revenue for the ecosystem. ^[2]​

History

The USDH Issuer Competition

In early 2025, the Hyperliquid exchange announced a Request for Proposal (RFP) to select an issuer for its native stablecoin, which would bear the ticker USDH. Native Markets, a newly formed entity, submitted its proposal and entered a competitive process against several established firms in the digital asset space, including Paxos, BitGo, Ethena, Frax, Agora, Sky, and Bastion. ^{[2] [3] [4]}​

The selection process was driven by Hyperliquid's validators, whose priorities included a strong preference for native issuance on Hyperliquid's own network, transparent and contractually enforceable revenue sharing, and an architecture that avoided dependency on a single institutional issuer. ^[2]​

Selection and Vote

The competition took place over several days in September 2025. A multi-hour community roundtable was held on September 9, where bidders presented their proposals. ^[2] Native Markets quickly emerged as a leading contender, with key validators such as Infinite Field, CMI Trading, and the largest validator, "Nansen x HypurrCollective," publicly announcing their support. ^{[2] [5]} Prediction markets on Polymarket reflected this momentum, giving Native Markets over 90% odds of winning by mid-September. ^[6]​

A significant development occurred on September 10, when the Hyperliquid Foundation altered the voting process by removing its own staked tokens from the validator weighting, effectively shifting power to community token holders. The Foundation later stated it would "effectively abstain by voting for the team with the most non-Foundation votes." ^[6] Following Ethena Labs' withdrawal from the race, Native Markets' position was further strengthened. ^[5]​

On September 14, 2025, Native Markets was officially announced as the winner, having secured a two-thirds majority of votes from staked HYPE token holders. The win was attributed by industry observers to the team's agility, singular focus on the USDH project, and perceived strong alignment with Hyperliquid's vision. Sid Sridhar, founder of Bima Labs, commented, "If they succeed, it will be a classic story of an outsider seizing an opportunity that incumbents were too slow or too cautious to capture." ^[3]​

Launch and Early Integrations

Native Markets officially launched the USDH stablecoin on the Hyperliquid exchange on September 24, 2025. The initial trading pair listed was USDH/USDC (as USDHL/USDC), and the asset reached approximately $2.1 million in trading turnover shortly after its debut. ^[4]​

Following the launch, Native Markets announced a series of partnerships in December 2025 to bolster ecosystem adoption. On December 1, a partnership with Across Protocol was established to enable slippage-free, 1:1 swaps of USDC from multiple blockchains directly to USDH on Hyperliquid. Subsequent integrations included the launch of an AXL/USDH spot trading pair with Axelar Network and adoption by platforms such as markets.xyz, the DeFi aggregator OpenOcean, and Rysk Finance. ^[7]​

USDH Stablecoin

​USDH is a centralized, fiat-backed stablecoin designed to maintain a 1:1 peg with the U.S. dollar. It is issued by Bridge Building, Inc. ("Bridge, a Stripe company") and functions as the native quote and settlement asset for the Hyperliquid exchange. ^[1]​

Reserve Mechanism

​USDH is fully collateralized by a hybrid portfolio of off-chain and on-chain assets. ^[3]​

• Off-chain Reserves: Consist of cash and U.S. Treasury securities held in the BlackRock Liquidity Funds (BLF) Treasury Trust Fund. These assets are managed by global asset manager BlackRock, with JP Morgan Chase and Lead Bank serving as custodians. ^[1]
• On-chain Reserves: Composed of tokenized U.S. Treasuries (USTB). This portion of the reserve is managed by Superstate, utilizing Fireblocks as the infrastructure custodian. ^{[1] [5]}

Transparency is maintained through blockchain oracles, and the project scheduled its first monthly third-party reserve attestation for November 2025. ^{[4] [1]}​

Issuance, Redemption, and Compliance

The issuance and management of USDH are handled by Bridge, a subsidiary of Stripe. Bridge also manages the Know-Your-Customer (KYC) and Anti-Money Laundering (AML) processes for users who wish to mint or redeem USDH directly, leveraging Stripe's established compliance infrastructure. ^{[1] [3]}​

Users can mint USDH on a 1:1 basis with U.S. dollars or USDC after completing a KYC/KYB process with Bridge. The stablecoin can also be acquired permissionlessly by swapping for it on various decentralized finance platforms. The reserve management framework is operated in line with the requirements of the GENIUS Act. ^[1]​

Ecosystem Integration and Economics

The economic model of USDH is deeply integrated with the Hyperliquid exchange through a system designed to share revenue and incentivize adoption.

Aligned Quote Asset (AQA) Protocol

The core of USDH's economic integration is Hyperliquid's Aligned Quote Asset (AQA) protocol. Under this mechanism, Native Markets programmatically contributes 50% of USDH's gross revenue to the Hyperliquid Assistance Fund (AF). The Assistance Fund then uses these revenues to buy back Hyperliquid's native token, HYPE, from the open market, creating a deflationary pressure and directing value back to the ecosystem. The remaining 50% of the revenue is retained by Native Markets to fund the growth and integration of USDH. ^{[1] [3]}​

Trader Incentives

To encourage the use of USDH over other stablecoins, Hyperliquid offers several benefits to traders who use USDH-quoted markets:

• Taker fees are 20% lower.
• Maker rebates are 50% higher.
• Trading volume counts 20% more towards qualifying for lower fee tiers. ^[1]

Partnerships and Integrations

As of December 2025, USDH was integrated with a variety of protocols and platforms across the Hyperliquid ecosystem and beyond.

• Bridging & On-ramps: Across Protocol and Relay facilitate cross-chain transfers of assets to USDH on Hyperliquid.
• DeFi Protocols: Integrations included lending/borrowing platforms Hyperlend, Morpho, and HypurrFi; the DEX Project X; the aggregator OpenOcean; and Rysk Finance.
• Integrated Order Books (HIP-3): Felix, a perpetuals DEX, and Ventuals, a market for pre-IPO stock futures, were slated to support USDH. ^{[1] [7]}

Team and Key Figures

While the official Native Markets website describes its team as "alumni of Uniswap, BlackRock, Stripe, Circle, and Ramp" without naming individuals, reporting from crypto media outlets identified several key figures behind the project. ^[1]​

• Max Fiege: Team Lead and co-founder of Native Markets, described as an "early Hyperliquid ecosystem advocate" and a "well-known Hyperliquid investor." ^{[6] [5]}
• MC Lader: A member of the Native Markets team who previously served as the President of Uniswap Labs. ^[6]
• Anish Agnihotri: A member of the team identified as a blockchain researcher. ^[6]

Controversies and Criticisms

Selection Process

The competition to select the USDH issuer drew criticism from some industry observers who questioned the fairness of the process. Haseeb Qureshi, a partner at Dragonfly, described the race as "fixed from the start" and "a bit of a farce," suggesting Native Markets may have had advance notice. ^{[2] [6]} Evidence cited by critics included the fact that Native Markets' proposal was submitted "almost immediately" after the RFP announcement and that its deployer address was funded hours before Hyperliquid publicly announced the competition. ^{[2] [5]}​

Nic Puckrin, CEO of Coin Bureau, noted that suggestions of a pre-determined outcome could negatively impact trust in both the governance process and USDH itself. However, Guy Young, founder of former competitor Ethena Labs, defended the outcome as a positive example of Hyperliquid's community-driven ethos, where "emergent players can win hearts." ^{[3] [6]}​

Operational and Counterparty Risks

Concerns were also raised about the operational model of Native Markets and USDH. As a "new and untested" issuer, analysts noted that the project lacked the extensive track record, regulatory history, and established institutional relationships of competitors like Paxos. ^[3]​

The project's reliance on a number of third parties, including Bridge (Stripe), BlackRock, and Superstate, was highlighted as a source of counterparty risk. Analyst Jonathan Morgan of Stocktwits pointed out that service disruptions from any of these partners during periods of high market stress could create significant operational issues. Furthermore, some community members expressed concern that relying on Stripe's subsidiary, Bridge, for core infrastructure could simply replace a dependency on Circle (USDC) with a new form of platform dependency. Native Markets responded to this by stating its architecture was "issuer-agnostic by design," featuring modular and upgradable off-ramps. ^{[3] [2]}​