BitGo and OpenEden Enter USDH Stablecoin Competition with Strategic Proposals
Real-world asset tokenization platform OpenEden and crypto infrastructure provider BitGo have entered the competition to issue Hyperliquid’s planned native stablecoin, USDH, bringing the number of contenders to eight. The collaborative effort positions both companies as serious contenders in Hyperliquid’s ambitious stablecoin initiative.
Hyperliquid validators will start voting for the USDH proposal from Thursday and will be able to cast their votes until Sunday. This voting period represents a critical juncture for the decentralized exchange platform’s ecosystem development. The competition showcases the growing importance of native stablecoins in DeFi platforms.
OpenEden’s USDH Stablecoin Strategy Focuses on Yield Distribution
OpenEden’s founder and CEO, Jeremy Ng, on Wednesday laid out the platform’s proposal on how it will handle USDH were it to win the bid. The RWA platform has crafted a comprehensive approach centered on ecosystem value creation.
The RWA platform pledged to distribute all the yield it will generate from the USDH reserves to the Hyperliquid ecosystem, which will include buybacks. This approach demonstrates OpenEden’s commitment to strengthening the broader Hyperliquid community through direct financial incentives.
The proposal includes specific mechanisms for validator rewards and token appreciation. It will additionally use the proceeds from minting and redeeming USDH to buy back Hyperliquid’s HYPE token and distribute it to the Hyperliquid validators. This strategy creates multiple revenue streams for ecosystem participants.
The company has earmarked 3% of its native EDEN token supply to provide additional incentives, which could be boosted in the future. OpenEden’s willingness to allocate significant token resources signals strong confidence in the partnership’s potential.
The custody solution reflects institutional-grade security standards. USDH reserves will be stored in a tokenized US Treasury Bills Fund, whose custody will be under The Bank of New York Mellon. This arrangement provides traditional finance credibility to the digital asset initiative.
BitGo’s USDH Proposal Emphasizes Regulatory Compliance Excellence
BitGo has positioned regulatory compliance as its primary competitive advantage. BitGo said it will leverage US dollar-backed liquid assets, bank deposits, short-term treasury bills, and more for minting and redeeming USDH. The diversified reserve structure aims to provide stability and liquidity.
The technical infrastructure incorporates cross-chain functionality from the outset. The company stated that it will use Chainlink’s cross-chain interoperability protocol to maintain interoperability between chains. This approach enables USDH adoption across multiple blockchain ecosystems.
BitGo’s revenue model balances ecosystem support with operational sustainability. The yield from the underlying assets will be used to buy and stake HYPE tokens, with the company taking a 0.3% fee of the total reserves. This fee structure remains competitive while ensuring long-term viability.
The regulatory credentials represent BitGo’s strongest selling point. BitGo touted its regulatory compliance as its major strength, as six of its companies have acquired licenses from Dubai, Singapore, Denmark, New York, and a Markets in Crypto-Assets license from Germany. These licenses provide global operational flexibility and regulatory certainty.
USDH Stablecoin Competition Intensifies Among Major Players
The competitive landscape reveals significant stakes for all participants. The winning bid will decide how it will manage Hyperliquid’s $5.9 billion stablecoin reserve, with 95.56% of it held in USDC. This substantial reserve pool makes the USDH contract highly valuable for any winning bidder.
Other suitors include Ethena, Paxos, Frax, Agora, Native Markets, and Sky. The diverse range of competitors demonstrates broad industry interest in Hyperliquid’s stablecoin initiative. Each contender brings unique strengths and partnership networks to the competition.
Current voting patterns show Native Markets leading the race. At the time of writing, Native Markets has received the most votes, with 33.73% of the delegate stake selecting its proposal. However, significant voting capacity remains uncommitted, leaving room for dramatic shifts.
However, 46.49% stake remains unassigned, which could drastically change the outcome of who gets to create the USDH token. This unassigned voting power keeps the competition wide open until the final voting deadline.
Conclusion
The BitGo and OpenEden collaboration represents a compelling blend of technical expertise and institutional backing. Their combined proposals address key concerns around regulatory compliance, yield generation, and ecosystem development. The competition outcome will significantly impact Hyperliquid’s trajectory as a leading DeFi platform.
The USDH stablecoin initiative demonstrates how major DeFi platforms seek greater autonomy from existing stablecoin providers. Native stablecoins offer improved integration, customized features, and direct ecosystem benefits that traditional alternatives cannot match.
