Stripe partner Native Markets wins the Hyperliquid stablecoin bidding war, signaling a new landscape in encryption finance.

According to Bloomberg, a bidding war over the issuance of a new stablecoin on the rapidly developing cryptocurrency trading platform Hyperliquid signals a new phase for the industry and its future masters. Native Markets, a new company under Stripe, secured the issuance rights for Hyperliquid's native stablecoin USDH by defeating established stablecoin issuers, including Paxos and Ethena, thanks to its partnerships with traditional financial giants. This competition not only reveals the brutality of the stablecoin market but also reflects that branding, partnerships, and business strategies have become as crucial as code in the world of Crypto Assets.

Hyperliquid Bidding Battle: The Victory of New Forces

Hyperliquid, as a rapidly growing trading platform, has become a fierce competitor in the field of Crypto Assets payments with the issuance rights of its native stablecoin USDH. Bidders include Paxos, Agora, Ethena, and the emerging company Native Markets, which collaborates with Stripe's stablecoin division Bridge. Although Native Markets is a newly established project, its partnership with Stripe has helped it stand out in the bidding process, defeating established companies that even promised to forgo almost all revenue to win the deal.

This result gives us a glimpse into the fierce competition among retailers, exchanges, and financial institutions for the rights to token issuance. Hyperliquid's validator network granted the contract to Native Markets over the weekend. A co-founder of a Crypto Assets fund, Zaheer Ebtikar, pointed out: "Every stablecoin issuer is extremely eager to obtain supply, and they are even willing to publicly announce how much they are willing to provide. This indicates that this is a very challenging business for stablecoin issuers."

Brutal Competition Driven by Interests

Hyperliquid's bidding competition publicly showcased how fierce the competition in this new market is. Paxos proposed not to collect any revenue until USDH's market capitalization reaches 1 billion USD. Agora proposed to share 100% of the net revenue with Hyperliquid, while Ethena offered 95%. All of this is to win the support of the validators, who are responsible for the software security of the Hyperliquid network and vote on key decisions.

Behind this competition lies not only a matter of face but also an economic concern regarding survival. Stablecoin issuers are not just minting digital dollars; they also earn interest from the assets backing these tokens. For instance, Circle, the issuer of USDC, shares this portion of income with Coinbase. With expectations of interest rate cuts this week, the urgency to expand market share has increased. This is why Hyperliquid contracts are so valuable, and it is also why Stripe's recent successes have garnered much attention. As decentralized platforms establish their own stablecoins and choose partners, such bidding wars may become increasingly common.

Stripe's Entry and Decentralization Controversy

Since acquiring Bridge for $1.1 billion earlier this year, Stripe has made significant progress in the encryption financial infrastructure space. It announced the new blockchain Tempo in partnership with the crypto venture firm Paradigm, and successfully achieved integration with various wallets and exchanges. Now, its stablecoin business is winning native token contracts in the most promising venues in the space.

However, Stripe's success has also drawn criticism. Agora co-founder Nick van Eck warned that handing the main stablecoin of a network to a "vertically integrated issuer with obvious conflicts of interest" would betray the ideals of decentralization. Additionally, there are differences among various bidders in terms of regulatory structures. Stripe's Bridge holds money transmission licenses in 30 states, while Paxos operates under a trust charter in New York and is seeking a federal OCC license. Native Markets stated on its blog that they considered multiple factors when choosing an issuer, including deployment speed and regulatory flexibility.

Impact and Future Outlook

Blockchain data shows that USDC remains the dominant stablecoin on Hyperliquid, with over 5.6 billion USD in deposits. However, the emergence of native stablecoins may begin to change trading flows and who profits from these trades.

Circle CEO Jeremy Allaire wrote on X: "It's great to see others buying new USD coins and participating in the competition." Some analysts believe that concerns about centralization may be overstated. "All signs so far indicate that Hyperliquid will try to remain neutral in terms of available stablecoins," research analyst John Todaro said.

Nonetheless, the USDH dispute marks a shift – in the future, branding, partnerships, and business strategies will become as important as code.

Conclusion

The stablecoin bidding war on Hyperliquid is not only a commercial competition but also a rehearsal for the future direction of the crypto assets industry. Stripe's victory indicates that TradFi giants are infiltrating and reshaping the core of decentralized finance (DeFi) through strategic partnerships and strong business networks. The subsequent developments of this battle, as well as whether other platforms will follow suit, are worth close attention from all crypto assets market participants.