- Ethena Labs withdrew its USDH bid after Hyperliquid community members expressed a strong preference for a native project.
- Native Markets is now the expected winner with a 92% chance, while critics question the fairness of the process.
Ethena Labs is no longer pursuing its bid to become the issuer of Hyperliquid’s USDH stablecoin. The team announced its decision on X, explaining it followed discussions with members of the network. These talks revealed a clear preference for a candidate originating from within Hyperliquid’s own community.
The last few days have been incredible to witness. I've never seen a community rally around and engage with passion like this before.
Following direct discussions with individuals in the community and validators we have taken onboard some of the concerns, namely:
-Ethena is not…
— G | Ethena (@gdog97_) September 11, 2025
This development positions Native Markets as the probable successor for the role. Ethena extended public congratulations to the team. Guy Young, Ethena’s founder, noted that the situation reflects Hyperliquid’s character as a place where new entrants receive a fair opportunity.
The withdrawal changes the landscape for selecting Hyperliquid’s native stablecoin issuer. According to data from prediction markets, Native Markets now possesses a 92% chance of winning. Paxos, a more established company, follows with a 7% chance.
Despite this, the selection method has attracted criticism from some industry figures. Questions have been raised about the equity of the process. Haseeb Qureshi of Dragonfly stated the proposal request felt insincere, noting validator bias towards Native Markets and the unusual speed of their bid submission.
Lilian Aliaga of OAK Research also voiced skepticism. He inquired how a new team rapidly secured over 70% of committed votes and expressed doubts about their capacity to scale the stablecoin.
With the latest voting updates, Native Markets' proposal is above 70% of the votes committed so far.
With all due respect, I just don’t see how they can turn USDH into a multi-billion stablecoin. And honestly, I don’t get how the vote is swinging so heavily their way.… pic.twitter.com/GhXLwf7nzh
— Lilian (@LilianAliaga_) September 11, 2025
Sam MacPherson of Phoenix Labs offered a different view. He recognized Paxos’s extensive experience in stablecoin issuance but accepted that Native Markets might be better suited to Hyperliquid’s particular requirements. The result of the vote carries tangible consequences for the network. Hyperliquid currently holds around $5 billion in USDC, representing a major revenue source for Circle.
The voting process is conducted onchain. Validators wield influence proportional to their staked HYPE tokens, and a proposal needs a two-thirds majority to pass. Delegators may reallocate their stakes to validators reflecting their choices. Two entities controlling 63% of the stake have committed to not voting.
The schedule for the vote is brief. A 24-hour validator declaration period was followed by a short redelegation window. The final vote is scheduled for a one-hour period on Sunday.
Ethena (ENA) is trading at $0.7546, down 2.27% over the last 24 hours but up 12.6% over the past 7 days. The token’s market capitalization is approximately $5.21 billion, with a circulating supply of 6.89 billion ENA and a total value locked (TVL) of about $13.21 billion. The 24-hour trading volume reached $685 million, reflecting solid liquidity across centralized exchanges like Binance, LBank, and Bybit.
From a technical perspective, ENA is consolidating around $0.75–$0.76, with immediate support at $0.74 and resistance near $0.78. The token has recovered from recent dips and shows resilience in the face of minor sell-offs. Volume distribution across exchanges suggests active trading, and short-term bullish momentum could resume if buying pressure persists above support levels.
In recent news, Ethena Labs withdrew from the Hyperliquid USDH stablecoin issuance competition, citing community concerns regarding non-native team involvement. This decision has clarified Ethena’s strategic focus on its USDe synthetic dollar protocol, a DeFi-native solution providing dollar-denominated yield outside traditional banking.
Additionally, the project executed a 5 million ENA deposit to Binance, worth approximately $3.81 million, signaling continued liquidity allocation for trading and yield management.
