Native Markets won a competitive governance vote in September to issue USDH on Hyperliquid, beating Paxos and others by arguing ecosystem alignment over financial terms. Eight months and $100 million in supply later, it is selling its brand assets to Coinbase as USDC becomes the protocol’s canonical quote asset.
Coinbase will become the official treasury deployer of USDC on Hyperliquid, the companies announced Thursday, ending the short run of USDH, the native stablecoin that validators selected over more established competitors less than a year ago.
Native Markets, the startup that won Hyperliquid’s September governance vote to issue USDH, has agreed to sell its brand assets to Coinbase, the company announced.
USDH markets will sunset gradually. USDC, already the dominant stablecoin on the platform with roughly $5 billion in supply, will become the quote asset across Hyperliquid’s HIP-1 through HIP-4 markets under an upgraded framework called AQAv2, Hyperliquid confirmed.
Circle will serve as technical deployer and has committed to stake 500,000 HYPE tokens. Coinbase announced it has also increased its staked HYPE position as part of the arrangement.
Reversing the Governance Vote
The reversal is notable for what came before it. In September, Hyperliquid validators ran an on-chain governance vote to select an issuer for a native stablecoin. The premise was that Hyperliquid held billions in USDC, and the yield on those reserves — estimated at $150 million to $220 million annually — flowed to Circle, not the protocol. A native stablecoin would redirect that yield back into the ecosystem through HYPE buybacks and the Assistance Fund.
The vote ran September 11–14. Native Markets won with roughly two-thirds of staked HYPE, beating Paxos, Ethena, Frax, BitGo, and Agora, The Defiant reported. The outcome was striking because Native Markets offered less generous financial terms than its rivals: a 50/50 split of reserve yield between the Assistance Fund and ecosystem growth initiatives.
Paxos had offered 95% of yield for HYPE buybacks; Ethena offered 95% plus a minimum of $75 million in ecosystem incentives; Frax and Agora pledged 100%. Native Markets won anyway as validators favored a team that was Hyperliquid-native over institutions offering better economics but less ecosystem integration. The Hyper Foundation abstained from the vote.
The governance process drew immediate criticism, The Defiant reported at the time. Haseeb Qureshi of Dragonfly — an investor in both Agora and Ethena — alleged a backroom deal, noting that Native Markets submitted the first proposal within 90 minutes of the RFP going live. One validator, Hypurrscan, held approximately 15% of total voting power. The process was also compressed: proposals were due September 10, validator signaling began September 11, and the vote closed September 14.
Stalling USDH Supply
USDH launched in late September 2025 with $2.2 million in day-one trading volume. Eight months later, its supply had stalled around $100 million while USDC on the platform had grown to approximately $5 billion.
Under AQAv2, Coinbase will share “the vast majority” of reserve yield revenue from its Hyperliquid USDC supply with the protocol — the same yield-sharing model USDH pioneered.
Circle, which began accumulating HYPE and deploying native USDC on HyperEVM within days of the September vote, The Defiant reported, will handle minting, redemption, and cross-chain infrastructure.
Hyperliquid said that, in a future network upgrade, canonical outcome markets will use USDC as the quote asset. The Hyper Foundation said it will issue grants to HIP-1, HIP-3 deployers, and builders who integrated USDH to support migration.
Incumbents at the Table
Native Markets framed the outcome as a proof-of-concept.
“We’re proud to have brought incumbents to the table with USDH, shifting economics not just for Hyperliquid, but for all stablecoin ecosystems,” the company said.
Native Markets also said it remains independent and did not disclose the terms of the brand asset sale.
Not everyone read it that way.
“The bullish read is ‘incumbents came to the table,'” one user wrote on X. “The honest read is the incumbent just bought the table.”
USDH remains fully backed during the transition. Feeless conversions to USDC and fiat are available through Native Markets’ dashboard.
