Max Wong @ IOSG Ventures - Sept 2025

Introduction

Recently, Hyperliquid made waves in the headlines by announcing they would be issuing a foundation backed native stablecoin, USDH, aimed at replacing USDC for the Hyperliquid eco. By simultaneously forcing issuers into direct competition for access to its user base and $5.5 billion in deposits, Hyperliquid extracted 50–100% of stablecoin treasury reserve yield back to its ecosystem, representing a $220 mn revenue stream. Their approach to stablecoin issuer selection represented the first on-chain "request-for-proposal" process in DeFi history.

This now sets the precedent for many consumer platforms looking for differentiated strategies in an increasingly competitive landscape. Mainly, rather than pursuing costly proprietary stablecoin issuance, requiring 9-18 months of regulatory navigation and significant compliance overhead, platforms can now leverage their distribution power to capture 30-100% of stablecoin reserve yields through competitive partnerships with minimal overhead. With Treasury yields at 4-5%, a platform managing $3 billion in stablecoin float could generate $45-135 million annually through strategic revenue-sharing agreements, representing a high-margin, low overhead revenue stream that scales exponentially.

This insight aims to analyze HL’s RFP auction's mechanics, broader market implications, and provides and explores options for consumer platforms to maximize stablecoin value capture.

The Auction Mechanics: Deconstructing Hyperliquid’s Platform Power

First using Hyperliquid’s stablecoin RFP auction as a case study - HL’s validator auction for USDH leveraged its dominant market position, processing $400+ billion in monthly trading volume and capturing 50%+ (90D) of perps DEX market share, to force 6 main stablecoin issuers into a competitive bidding war competing for control of $5.5 bn in USDC deposits currently generating ~$220 mn (4%) annually in Treasury yield. The platform then extracted 50-100% of this value from every bidder, demonstrating Hyperliquid’s unprecedented negotiating power.

                                          **Hyperliquid Ecosystem Stablecoin Float**