Ethena Labs has taken a step back from the USDH Stablecoin output competition of Hyperliquid after recognizing the concern about the community about its position as a non-Native Team.
Summary
- Ethena drew his USDH Stablecoin proposal after Validators had expressed their concern about his non-Native status and broader ambitions.
- The rival native markets team now has the preference to lead Stablecoin output on Hyperliquid.
- Ethena will turn to building Husde and other indigenous products, supported by its $ 13b usde balance.
According to a September 11 after On X by Ethena (ENA) founder Guy Young, the decision follows direct conversations with validators and representatives who have collected doubts about the focus of Ethena and coordination with the hyperquid (hype) ecosystem.
Community Pushback leads to withdrawal
In his statement, Young emphasized three important concerns of the hyperliquid community; Ethena’s lack of native ties with the exchange are wider product ambitions beyond USDH and the perception that his growth strategy was not fully tailored to hyperliquid.
“Congratulations to the Native Markets team. You earn this,” Young wrote, praising the rival proposal that has received a grip. He added that the hyperliquid administrative process has demonstrated how smaller, community -driven projects could succeed, regardless of pedigree or financial support.
The first offer of Ethena suggested to spend USDH via the upcoming USDTB token of Anchorage Digital Bank, indirectly collateral by BlackRock’s $ 2 billion Puidl Fund.
Supported by Blackrock’s Head of Digital Assets, Robert Mitchnick and Chief Executive Officer Nathan McCauley of Anchorage, the team argued that this structure would offer scalability and credibility of institutional quality.
In addition, Ethena promised to send 95% of the USDH reserve income to Hyperliquid through community funds, buybacks from token or validator rewards. Despite these guarantees, the opinions of validators were ultimately influenced against the bid of Ethena because of concern about centralization and their external focus.
Ethena runs to native product development
The Ethena team made it clear that it is still dedicated to developing within Hyperliquid, even after leaving the USDH race. Young pointed to upcoming products, including hyperliquid-native synthetic dollars, usde-compatible savings and card expenses and new derivatives such as shares-based eternal swaps.
The team is also planning to use its $ 13 billion Ethena Usde (Usde) balance to offer liquidity and to expand the HIP-3 markets of hyperliquid, to introduce innovations such as modular Prime Broking and reward-bearing colland.
“Our ambitions stretch further than working with only one partner exchange,” said Young, indicating that Ethena is planning to remain an important player in the hyperliquid ecosystem, despite the setback.
The result is a turning point for Hyperliquid, where local builders have been preferred by community management above outsiders. Since the indigenous markets are now likely to control the future of USDH, the exchange of the Exchange for the issue of Stablecoin could form its risk profile and growth trajectory for the coming years.
