Abstract
Paxos, founded in 2012, is the undisputed leader in stablecoin infrastructure powering regulated issuance for the category leaders across finance and crypto for over a decade – Binance, PayPal, Kraken, Robinhood, OKX, Anchorage, and more trust Paxos as their stablecoin provider. We are the only firm that has launched and scaled multiple regulated stablecoins, including Binance USD to $25B+ and PayPal USD to $1B+. When the largest players in the industry needed a stablecoin issuer, they chose Paxos.
Our mission has always been clear: scale access to onchain finance for everyone by partnering with winning platforms while maintaining enterprise-grade security, technology and compliance every step of the way.
Hyperliquid has experienced unrivaled growth in the last year. Hyperliquid’s largest potential bottleneck to unlocking the next phase of growth is gaining the trust of institutions and consumer enterprises that want to interact onchain. With our global enterprise distribution, we will integrate Hyperliquid more deeply into the global financial system, by expanding beyond crypto-native users towards major enterprises and the billions of consumers they serve.
We believe Hyperliquid will be the foundational platform for global, decentralized finance. This is why Paxos is committed to making Hyperliquid the first priority with Paxos Labs, a new entity dedicated to accelerating stablecoin adoption within decentralized ecosystems. To realize this commitment, Paxos Labs has acquired Molecular Labs, the infrastructure provider behind LHYPE and WHLP, two primitives that have powered the Hyperliquid ecosystem since the very first day of the HyperEVM launch.
Now we are uniting a proven track record of contribution to the Hyperliquid community with Paxos’s decade-long dominance in regulated, enterprise-grade stablecoin infrastructure. We propose the launch of USDH, a Hyperliquid-first, fully compliant stablecoin purpose built to drive adoption, align incentives, and anchor the ecosystem’s next era of growth.
Why Paxos?
Paxos is uniquely positioned to bring unparalleled regulatory clarity, trust and global scale to Hyperliquid. With global compliance coverage and connectivity to consumer banking rails, Paxos enables Hyperliquid to transition from an ecosystem for crypto natives to a financial platform for all users across the world.
Enterprise Scale and Partnerships
- Issuer of 7+ tokenized assets, with $160B+ in cumulative issuance volume
- 70+ global partners integrated with Paxos stablecoins today, with a target of 100+ by year-end
- Distribution across every major channel from centralized exchanges, custodians, fintechs, DeFi protocols, to payment processors, and white-label partners
- Deep connectivity with the largest fintechs in the world, partnering on stablecoin, custody, brokerage and payment infrastructure
Global Regulatory Coverage and Geographic Reach
- North America: Fully licensed in all U.S. states, with a New York State regulated trust. Paxos is in process of obtaining a federal OCC trust charter as well. Paxos is among the exclusive issuers capable of offering a GENIUS-compliant stablecoin today.
- Europe: MiCA-compliant operations, distributed across the EU and EEA via regulated banking partners
- APAC and Middle East: Licensed in Singapore (MAS) and Abu Dhabi (FSRA), with integrations across MENA and APAC corridors
- Latin America and Africa: Active payment corridors in Brazil, Mexico, Argentina, Turkey, UAE, Philippines and other strategic markets
Comprehensive Funding Capabilities
- Orchestration: Onramping via direct global fiat banking rails including SWIFT, ACH and wire into stablecoins.
- On/Offramp: Native conversion from Circle’s USDC, PYUSD and USDG to USDH without secondary price exposure.
- Payments: Enabling USDH to facilitate real payments for retail consumers through card issuance, merchant acceptance, and enterprise fintech integrations.
Why USDH?
The biggest opportunity in the Hyperliquid ecosystem is ensuring that the revenue generated from stablecoin balances and trading fees flows back to ecosystem builders and users. USDH solves this with unmatched scale, aligned incentives and regulatory oversight:
- Globally Compliant: Paxos alone can offer multi-jurisdictional issuance that is GENIUS and MICA compliant and will hold the highest quality reserves of T-Bills, Repos and USDG which will be a requirement for being supported by US market makers and exchanges.
- USDH Deployment: Native on both HyperEVM and HyperCore.
- Revenue Sharing: Paxos will allocate 95% of interest from reserves backing USDH to buy back HYPE and redistribute it back to ecosystem initiatives, partners and users.
- Aligned Incentives: Application builders, validators and their communities directly share in the value they help create.
Rewarding Contributors
Hyperliquid pioneered the concept of builder codes to share its exchange revenue with those who drive volume to the protocol. Paxos-issued USDH will extend this ethos to allow those who contribute to the growth of USDH to retain a share of the underlying revenue:
HYPE Buyback Distribution
- Revenue share will be proportional to the USDH balances and volumes across partnering Hyperliquid platforms.
- The bought back HYPE will be distributed amongst three entities: protocols, validators and users.
Hyperliquid First
Paxos Labs is built on a track record of contribution to the Hyperliquid ecosystem:
- LHYPE: Tokenized leveraged loop trade utilizing Hyperlend, HypurrFi, Felix and deployed on Pendle, HypurrFi and all the relevant ecosystem-native DEXs.
- WHLP: Tokenized representation of the HLP vault, enabling composability around Hyperliquid’s foundational yield source deployed on HyperLend, HypurrFi, Felix, Pendle and all the relevant ecosystem native DEXs.
Hyperliquid is ready for a native, compliant stablecoin that can serve as the backbone for its next stage of growth. Paxos brings:
- A decade of regulated stablecoin issuance at global scale
- A team fully embedded in the Hyperliquid ecosystem from its inception
- A commitment to align incentives with the builders and users on Hyperliquid
Additionally we plan to add support for HYPE as an asset within Paxos’s brokerage infrastructure which powers crypto trading for platforms such as PayPal, Venmo, MercadoLibre, Nubank, Interactive Brokers and many others.
Regardless of the outcome of this community vote, we are committed to continue building in the Hyperliquid ecosystem and stay aligned with the ecosystem-led philosophy that we’ve outlined in this proposal.
If you have any questions or want to learn more about what we’re doing at Paxos Labs, please reach out!
Hyperliquid.