Crypto infrastructure company Paxos has submitted an updated proposal for Hyperliquid's planned USDH stablecoin launch. The new plan isn't limited to technical details; a partnership with PayPal has also attracted attention.
PayPal partnership proposal for USDH has been submitted
Paxos's plan, dubbed the "V2 proposal," aims to expand USDH globally. A critical step in this process will be integration with PayPal. If accepted, USDH will be listed on PayPal's payment channels and Venmo. This will allow users to buy and sell the stablecoin directly through PayPal and use it for their daily payments.
PayPal also plans to list Hyperliquid's native token, HYPE, on their platform. To support this integration, PayPal has also committed to allocating $20 million in incentives to the ecosystem.
Paxos' proposal isn't limited to integrations alone. The company proposes to reinvest all USDH revenues into Hyperliquid's Assistance Fund (AF), which will grow until the stablecoin's total locked value (TVL) reaches $1 billion.
In addition, it is stated that Paxos' revenue share will be limited to 5% even if TVL exceeds $5 billion. Paxos emphasized the proposal's long-term partnership model, stating, "Thanks to this framework, Paxos will only win when Hyperliquid wins."
GENIUS Act Reminder
Paxos also emphasized legal compliance in its proposal. The company emphasized that it is the only company compliant with the GENIUS Act, adopted in the US, and the only company legally authorized to issue tokens in Europe. It also announced that PayPal's existing stablecoin, PYUSD, will be added as a reserve asset to ensure stability.
The updated plan highlights Hyperliquid's targeting not only individual investors but also institutional players. Paxos aims to integrate "builder code" into Hyperliquid by working with fintech companies and brokerage firms.
The company also plans to strengthen its DeFi integration on HyperEVM, develop a USDH-based "Earn" product, and integrate it into consumer applications. Paxos added that it will leverage its existing infrastructure, where it works with giants such as Stripe, Mastercard, Robinhood, Nubank, Mercado Libre, and Interactive Brokers, to implement this plan.
Competition is heating up: Numerous bids for USDH
While Paxos's bid is strong, the race to become Hyperliquid's USDH issuer is fierce. Frax Finance submitted a similar bid with BlackRock-backed frxUSD. A consortium of Agora, Rain, and LayerZero also attracted attention with its emphasis on 100% net revenue sharing and neutrality. Ethena Labs and Sky have also submitted their own bids.
Hyperliquid's search for an issuer, which began on September 6, has a deadline of September 10. Validator voting to select the winner will begin on September 14th, and the Hyperliquid Foundation will remain neutral during this process.
At the time of writing, Hyperliquid's own coin, HYPE, is trading at an all-time high of $55.20.
