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Stablecoin Roundtable $USDH
Recorded: Sept. 9, 2025 Duration: 2:32:04Space Recording
Short Summary
The Stablecoin Roundtable brought together industry leaders from Paxos, Agora, FRAX, and Sky to discuss the future of USDH, a new stablecoin poised for significant growth. With ambitious targets of reaching $50 billion in distribution and strategic partnerships with federally regulated banks, the participants showcased their commitment to innovation and community-focused financial solutions.
Full Transcription
Music Thank you. Music Thank you. Music Thank you. Music Thank you. Music Thank you. all right um gmgm good morning good afternoon good night All right.
GMGM, good morning, good afternoon, good night.
First of all, welcome to Stablecoin Roundtable.
First off, we want to thank you for making time today for the speakers and listeners.
So thank you for joining us.
Today, we will have Ball and Alex from Pexos Labs, Nassim from Bastion, Sean from FRAX, Drake from Agora, Max and Anish from Native Markets, and Rune from Sky to discuss the latest proposals for the USDH stablecoin.
Before we begin today, some quick ground rules. Speaking time will be evenly distributed,
and we will be following structured rounds.
We will also allocate some time for audience questions at the end.
So with that being said, let's get started.
Okay, each team will have three minutes to introduce yourselves
and the project you represent.
We will let you know when the time is up.
Let's start with Bo.
Can you hear me all right?
Yes, sir.
Amazing.
Thank you so much for having us on, Bo.
Great to meet everyone representing the Paxos Labs team.
So I'll just share some of our background
and why we're really excited to be a part
of the USDH proposal, and particularly why we think we're a great fit to work with the
ecosystem on this.
And so I'll start with a few points.
Paxos Labs has the team that is Hyperliquid first and aligned, and we've been building
on Hyper-EVM since day one with L-Hy hype. Only team here that has shipped and maintained real tangible products on
hyperliquid since day one.
And I can pass it to Alex in a second to, to share more on, on,
on the background there.
But, but the points on Paxos as well, and some background for those that,
you know, aren't as familiar with Paxos.
Paxos has been a regulated issuer longer than anyone in this space.
We are the only player here that has a state trust charter through the New familiar with Paxos, Paxos has been a regulated issuer longer than anyone in this space.
We are the only player here that has a state trust charter through the New York Department
of Financial Services and approval to transition to a federal charter via the OCC.
This is particularly important because we believe that USDH is going to be a $10 billion
plus asset, if not larger.
And I really implore the community to look into and understand
what some of the newest regulation requires, and particularly the fact that only a federally
regulated entity can issue an asset beyond $10 billion. This is not something you can just obtain.
We started our OCC process over three years ago, right. And so I think this is a really important point to
highlight and for people to understand if compliant global stablecoin is important
to the community, Paxos is the only provider in the space that can do this today.
But with that said, you know, compliance is everything. That's not our only strength.
We're focused on unlocking growth. Right. And I think the unique thing that AXSOS is going to bring to the hyperliquid ecosystem
is to grow the distribution of hype and USDH beyond the current hyperliquid ecosystem.
We don't believe that this proposal is just about USDH replacing USDC.
It's about how we can 10x the entire ecosystem, right?
We think there's going to be $50 billion of USDH, not not 5 billion. We think hype and the Hyper EVM will be available.
They use Paxos infrastructure to access their crypto products, right?
And they are going to turn to Paxos to integrate their next-gen of products,
and we believe that Hyperliquid should be a part of that journey.
And so we believe that our experience as a regulated issuer
and our experience building in Hyperliquid together
is the only solution that provides the community
an aligned and truly compliant stablecoin that can 10x the entire ecosystem.
Sounds good. Thanks for sharing. All right. So maybe on the next we have Drake.
Hi, my name is Drake Evans. I'm the CTO and co-founder of Agora.
Agora is a stablecoin infrastructure provider.
And we provide tooling, orchestration
for white-label stablecoin products.
And we also have launched our flagship stablecoin, AUSD.
We work very closely with VanEck for the management
of our reserves. And our cash custodian is State Street.
For us, we believe that the USDA proposal, very similar to Paxos, is about more than just compliance or licensure or whatever else.
It's about building stablecoins and using stable coins to grow the ecosystem. I think for us at Agora, we've always
believed that stable coins should be run like a public good as much as possible. Ultimately,
what that means is you pass as much of the revenue back to the people who drive value
in the monetary network. We've never believed that the core profitability of our business would ever have been powered by rent seeking or directly off of interest income.
And so we're super happy to kind of see the shift in the proposals towards significantly higher rev share.
I would say we believe we're the best team to execute on this and to give USDdh and the entire hyperliquid community
the best source of additional distribution and and use
sounds good appreciate the introduction there um up next we have max
hey everyone and thanks to hyperco for hosting um i'm one of the co-founders of Native Markets. I'm joined by Anish as well as Adil from the Bridge team.
We set out to build out a Hyperliquid Native stablecoin.
It's been a dream of mine for the past year.
What we're really looking to achieve here is not only to bring that stablecoin to market,
but to also see it through in its ascendancy, right?
It actually scaling it on Hyperliquid.
And that's kind of where our native markets comes from,
because we do see the relevance of whether it is spot markets, perp
markets, EVM markets playing a role in that process. Hyperliquid has been, in my opinion,
right, one of the most compelling ecosystems over the past two years. And that is just now resonating for folks. And it's been really amazing to see
all of the providers, you know, really recognizing that, right, over the past weekend,
and all the effort that has gone into these proposals. And, you know, I think what we're really excited to see here is just taking back a lot of the
value that's leaking from the ecosystem, playing a deep role in Hyperliquid's next chapter of growth.
Beyond just the $5 billion, that's it in USDC today.
Sounds good. I appreciate that, Max.
Next up, we have Nassim from Bastion.
Hi, everyone. My name is Bastion.
My name is Nass. I'm the founder and CEO of Bashtian,
have been in the crypto space for quite a bit of time.
My background is really in key management and regulated Cassidy products.
I was one of the first few employees at Anchorage, first OCC chartered digital asset bank, then was at Meta working on the Libra project,
essentially tech leading the custody infra and a lot of the core infrastructure that
then powered the issuance of the Libra currency. Obviously, everyone here knows that the
government had other plans. So joined Anderson Horowitz, where I was CISO on the crypto side, and have been helping a lot of the ecosystem teams building crypto to be more secure.
And we centrally built Dashen as the platform that we wish we had access to at Meta for the issuance and the growth of the Libra currency.
So really, we work as a white- white label stablecoin issuer, very neutral.
We don't have our own stablecoin.
We don't have our own chain.
We really focus on building tools that, regulated tools that enable the launch and
growth of stablecoin ecosystems. And just like Paxos, we have a New York trust charter,
as well as dozens of money transmitter licenses across the U.S.
and a very strong connectivity both to the U.S. banking system
as well as non-U.S.
And really excited at the opportunity to not just launch but really grow the usdh um stable
coin and the ecosystem around it the way we think about it and i've been trying to to post on this
card i have no idea why it's not letting me uh post um i swear i have the rank i know that everyone
here has been uh has been uh or almost everyone has been trying to check their rank and trying to get
the level to post.
But that was actually quite funny to see.
But I think that ultimately the needs to grow stablecoin just change over time.
And so the way we think about it is that there has to be, as part of the proposals, room
for flexibility.
The bootstrap of the liquidity is very different as an initial step
from growth over time and incentivizing the broader adoption,
liquidity on other ecosystem and exchanges,
and really sustainable incentives for growth.
And so those are the things that we're really excited to dig deeper with the community on those aspects.
Sounds good. Appreciate the introduction.
Yeah, looking forward to seeing the proposal.
the proposal. Next we have Sean from Frax. Hey, thanks for holding the space. I'm Sean from Frax.
Okay, up next we have Sean from Frex.
We're a builder-first DeFi-native stablecoin team with more than a billion dollars in combined TVL
across multiple stablecoins and a product suite that's been shipped through multiple cycles.
Our roots are in DeFi innovation,
and many know us as the team that built an algorithmic stablecoin
that actually worked.
What some of you may not be as familiar with
is that more recently we have built from scratch
an entire full stack system for a genius stablecoin future.
This is legislation that our founder Sam Casmean helped draft.
We call this the first stablecoin operating system,
and it's composed of
three layers. First is FraxUSD, which is our programmable digital dollar built to the genius
standard backed by short duration US treasuries, leading tokenized funds from BlackRock and
Superstate. The second is FraxDoll, which is our high performance L1 we built from scratch,
proof that we can run core DeFi infrastructure and build out DeFi ecosystems.
And we've deployed and supported assets across 20 plus networks.
And then the third is FraxNet.
And this is the account interaction layer for our stablecoin that allows anyone to mint, redeem, and earn rewards.
So the latest on our hyperliquid proposal is that based on community feedback,
our USDH would be issued standalone, completely separate from FraxUSD.
We're in talks to form an alliance with a federally regulated U.S. bank issuer prepared to issue USDH if our proposal is selected.
We believe in a post-genius world. Compliance is table stakes.
The edge we can provide hyperliquid is an execution, distribution,
incentive, security, speed. And that's where FraxNet matters for Hyperliquid. FraxNet allows
USDH's underlying income to be streamed directly to the targets Hyperliquid governance chooses.
And splits are enforced by contracts. We'll build out dashboards to make those flows visible.
Anyone can audit them. Economically, we've placed our proposal with the best 0% FRAX take rate and 100% of the
underlying income streamed on-chain to your community.
No token grants, no equity asks, no rev share.
Security and reach are built in.
We use Layer 0 for multi-chain transfers across 20 plus chains, but we go beyond even the
average Layer 0 deployment as well.
Because layer zero technology is open source,
we actually operate our own Frax validated layer zero instance,
which gives us end-to-end control over cross-chain security and messaging.
This is just one of many examples of how our offering isn't
copy and paste stablecoin as a service.
It's an entire system built from first principles.
In our experience issuing multiple stablecoins and running our own chain with assets across 20 plus chains means we know how to bootstrap usage and liquidity quickly and safely.
No other proposer has their own chain.
No other proposer operates across more than a handful of DeFi ecosystems.
So if the question is who can help Hyperliquid keep building like Hyperliquid, our answer is to choose a team that's already done the hard parts on their own, designed a stablecoin operating system, built a chain, scaled across networks, and engineered positive sum mechanics that put every dollar to work for users.
We'll also bring federal-grade issuance together with DeFi native execution and turn the USDH into a flywheel the Hyperliqu community controls thank you all right appreciate the
introduction sean um yeah next up we have rune from sky thank you and uh hello everyone thanks for
listening in on this space and inviting me here so I am the co-founder of Sky, which is,
well, it's possibly the oldest DeFi project.
It's the second largest, sorry,
it's the fourth largest stablecoin in the world
with more than 8 billion USGS in circulation now.
And this is, and this stablecoin is backed by more than $13 billion of collateral,
which is no doubt it's the most diversified collateral that any stable point has.
And it's also the most transparent with some really awesome real-time analytics that anybody actually can go check out on info.sky.money.
And like the level of transparency and verifiability that we've developed reached a point where
when I go and show what we're doing to like Wall Street, TradFi bankers, they're just mind blown
that this is even possible. But basically, that's the kind of stuff that Sky is doing
every day because we've, yeah, I mean, at this point, the project
has been basically evolving and developing
and growing for seven years and just
reached some, like, basically reached a point where the technology is very
impressive.
Oh, and it's also, I believe that Sky is actually the second most profitable DeFi project in the world, only second to Hyperliquid, with something like more than $250 million in profits per year.
And fundamentally, this is possible because Sky
evolved in sort of multiple stages,
and it now reached a point where it's modularized itself.
So you have sort of Sky itself, but then you also
have other projects building on top of Sky
and sort of competing and synergizing
to best deploy the collateral portfolio back in USGS.
And this results in just an extremely high
risk adjuster return that then just gives a better rate of return for the stablecoin holders
and better profits for the protocol itself so i am i'm like a super og i got in crypto super early
and i always remember the big um i mean the the big dream the big vision we all had from the very early days
was to get rid of the centralized exchanges and actually switch to real DEXs.
And I remember thinking, any moment now, it's going to happen any moment.
But always, it just never happened for some reason.
So I was super excited when Hyperliquid suddenly just out of nowhere
actually made this future that we all
had hoped for a reality so i think that's that's so amazing and from that perspective i think it's
really obvious that a decentralized exchange should also be tabbing into the power of this
of a decentralized stable point ultimately the cost all of the costs and all the effort of delivering decentralization is super
high but then once you actually get it going and once you get that scale network effect and
technology stack and all those pieces together the upside goes totally exponential and sky and
hyperliquid are basically two of the very few defy projects that have managed to reach that point. So I think working together, like the possibilities for Synergy is just really, really natural and really exciting, I think.
And really, no matter what happens with this USDH competition, which, by the way, I think is very entertaining.
As others have mentioned, it's like finally governance is fun for once.
But no matter what, Sky is committed to work with Hyperliquid.
All right.
Thank you, everyone.
Appreciate it.
Yeah.
Sorry, time's up.
All right.
So perfect.
Now we already have the opening statements from each team.
Let's go into some of the deeper questions. For this stage, every team will
have two minutes per question. As the team has stated in the messaging, USDH is well
suited for a Hyperliquid first, Hyperliquid aligned, compliant and natively minted stable
coin. So our first question is this Hyperliquid first um how do you first
get into hyperliquid and why are you interested in the ecosystem uh drick please go ahead
yeah i mean i uh it's weird crypto and time in crypto is sort of compressed and also stretched
so i don't i can't actually tell you when I first got into Hyperliquid.
But I think that, I mean, I assume everyone here has been hearing about Hyperliquid for some time.
I think it really, to Rune's earlier point, is sort of the dream of all the people that have been here for five, six, seven years building.
for five, six, seven years building.
You take something that's successful,
a little bit of DeFi native,
a little bit of sort of TradFi,
but take it and build it on chain.
Do it with no VC funding and kind of like thread
this needle perfectly between decentralization
and user experience.
So yeah, I don't know exactly when I would say like me
or even Agora got into Hyperliquid,
but it's been a fascinating thing to watch.
I think, yeah.
Sounds good. Appreciate it.
Right up next we have Max.
So I started off on Hyperliquid at the tail end of 2023.
I had been in ETH DeFi since 2018 and over the years it very much felt
like sometimes a glorified academic experience experiment right like we've definitely come a long
way and particularly in 23 I was feeling quite disillusioned. But when I came across Hyperliquid, it was very clear to me that there was not only a
ton of technical prowess, but a real commitment to community ownership.
And, you know, I think that was quite unique, given the rest of the field in DeFi at the
given the rest of the field in DeFi at the time.
time.
And so I basically spent 2024
completely focused on the points program,
as well as spitting up,
let's call it a pro bono angel syndicate called Hyperactive,
in particular after the Hyper-EVM was announced, right?
Because it was clear that there was no grants program. Teams wouldn't be poached or lured over to Hyperliquid.
Had to be done at a very grassroots level.
So through the back half of 2024,
we incubated, advised,
helped out teams like Kinetic, Felix, PVP,
and those are all some of the largest projects
in the ecosystem today.
Sounds good.
Appreciate it, Max.
Up next, we have Nassim. Oh, all right.
It's okay.
Let's move on first.
Next we have Sean.
Hey, yeah.
Personally, I'm a Hyperliquid user.
I found out about it when I was at Token 2049 last year, and there were so many people so
excited about it that I had to find out what is this crypto product and how great it is.
The thing about Hyperliquid is the reason why there's so much TVL there is because of
what the builders built.
The product is just so far and above beyond what anything else in the space was offering from like a UI perspective, from a technical perspective that like you couldn't not use it if you wanted to trade.
But as far as Frax goes, we don't have an active presence on Hyperliquid right now.
And if you wanted to pick like a day one contributor out of loyalty, we would totally respect that.
Like that choice is
obviously maxed with native markets. But if the goal is the best outcome for the users now,
just judge us on how we've built over the years. We treat every chain as a partner, not as a rival.
So we have positive some integrations across base, Sonic, Solana, Nearsay, Linnea, countless. You can
just like scroll through our Twitter feed and see how we integrate
with all these protocols. Hyper EVM is obviously new, but not brand new, and we should have deployed
sooner, but we are in the process of deploying our assets there, and this isn't just talk.
If you've been following along in the Discord, we have on-chain proof that we deployed our
Frax Layer 0 DVNs on Hyper EVM a couple weeks ago with no knowledge of this proposal
so that we could start deploying our assets there. So whether or not we get the USDH ticker,
we'll continue with our deployment of Frax assets to Hyper-EVM. That's just how we operate. That's
what we do. If you want a partner whose default mode is to ship and whose economics leave the
value with your users, that's Frax. If you don't choose Frax, I would just ask you to push whoever
wins to use our underlying infrastructure because we built it from scratch to be the best possible system.
Sounds good. Appreciate your time, Sean. Next we have Nassib.
Can you guys hear me?
Okay, perfect. Sorry, everyone.
Yeah, I think that the way I've conceptualized it is that everyone is trying to reduce counterparty risk as much as possible in this industry.
We obviously are all in the business of trust management and chains are just big trust management machines.
think that the approach that we've seen from Hyperliquid, the
chain and Dexite has been just extremely pragmatic. And I think
that pragmatism will, will win, building the best experience
building something that is really
user centric. And this is something that we, you know, we've been excited for quite a bit of time
internally. I think that there was a lot of bashing at a certain time around centralization,
kind of around the nodes. And the way I've always thought about it is that all the ecosystems have to focus on a user-first kind of interfaces,
both at the chain level and at the app level that lives on top of it.
And so that is, in my opinion, one of the best, if not the best, execution in the space
in terms of building something that is user-first while progressively decentralizing.
that is user first while progressively decentralizing and the focus on building the user first
experiences will really lead to a lot of adoption of the protocols, not just Hyperliquid X,
but additional protocols that will live on top of
hyperliquid as a as a chain and yeah there's a massive opportunity to not just have usdh itself
um grow but i think that once you have usdh uh grow as part of the hyperliquid ecosystem
a lot of other ecosystems will actually want to build on top of USDH,
just like they will want to build on top of hyperliquid.
I wouldn't be surprised if more stablecoins actually want to wrap USDH over time
and actually funneling more liquidity into the usdh stablecoin that will then build more revenue for the
incentive programs essentially of not just bootstrapping more and more and building more
liquidity but also just a better incentive program for trading and builders code and and
you know bootstrapping new markets so very excited about the flywheel
effects that can be built for the uh hyperliquid ecosystem uh and moving away from other stable
coins sounds good all right just to remind everyone um the first question is how did
you first get into hyperliquid and why are you interested in the ecosystem all right next up we
have rune from sky so um i well so sky's bread and butter business is credit enhanced cryptic
levelized lending so obviously um as soon as hyperliquid started really popping
and there was a lot of, I mean,
it was clearly getting traction and adoption
and just this like very electric hyped up community,
which is super cool, I think.
I was looking into it right from the beginning
and it's just like, as I was saying earlier,
Decentralized Exchanges is like just such a dream in all of crypto.
And the opportunity for a system like Sky to deploy assets into perps or even like spot leverage or whatever kind of opportunities that the DEX ultimately will be able to offer over time at the scale of Hyperliquid.
That was super exciting to
me and i basically followed it from the beginning but interestingly enough the big barrier to sky
making like a huge bet on hyperliquid earlier was actually the um the current usdc bridge
because it has this i mean the problem with the usdc bridge is that it has this, I mean, the problem with the UCC bridge is that it has this sort of unquantifiable nature to it,
right?
That it's hard to tell exactly how to risk assess it.
So that's also why I'm so excited about the USTH
and just opening up for more stable points.
Because no matter what, that's going
to mean that there will be a way to diversify
across multiple bridges and just get a better handle
on how these bridges work
and the security setups, which ultimately then can mean lower cost of capital and just deploying
lots of capital and TVL into hyperliquid.
And from Sky's perspective, you know, generating a very good risk adjust return.
All right.
Thanks, Rud. Next up up we have ball from texas i'll actually have alex from my team
take this one alex there alex please yep uh thanks for having me on um you know i think
similar to max the uh the story for myself and and my team for Hyperliquid started in early 2023.
I actually remember going to a Hyperliquid meetup in ECC in Paris, France at the time.
And perp exchanges were like all the talk.
And as soon as I started using Hyperliquid, I knew that that was the one that was probably going to take off just because of the user experience
third trying to find strategies to optimize points farming for for myself and my team and um you know
our main business line at the time was building structured products building trading strategies etc so um when we heard that Hyper EVM was going to be a thing,
started getting in touch with all the protocols,
Hyperland, HyperFi, et cetera.
A lot of them became public before the EVM was even live.
And then we also partnered up with a team called Staking
Rewards to build out the protocol, the looping collective.
Out of the looping collective um out of the looping collective
came lhype literally the day that hyper evm went live uh we launched lhype i think like the
announcement came out at like uh almost midnight our time so we got the contracts up by like 2 a.m
um and i think like the most interesting part about like being a part of this whole process and seeing the
development of hyper core to hyper evm is really the interconnectivity of it all right like these
are d5 primitives that people have been trying to perfect for the past five to six years um and
it just feels like hyperliquid has the best user experience that gives DeFi users what they want.
And for us, we want to be able to provide the same type of experience for USTH.
I think one of the major pain points here is the fragmentation of liquidity.
Rates on Hyperliquid are out of parity with rates on other chains and really to drive value to the
ecosystem and make it viable for institutional players, retail, and even expanding this offering
to, you know, fintechs and banks. We need to bring those rates down to parity. And I think like the
best way to do that is probably to unify liquidity and a hyperliquid native stablecoin like USTH.
So that's why we put our hat in the ring as Paxos Labs.
We were formerly Molecular Labs.
We were acquired by Paxos fairly recently.
And now we're working together to really drive home
like our former experience on hyperliquid
and this native stablecoin way.
Got it.
Appreciate it, Alex.
Cool.
So now everyone knows on the first question.
The second question we have,
it will be related to hyperliquid alignment.
So in your opinion, what is the hyperliquid ethos?
Do you have any conflicts of interest with hyperliquid and USDH?
And also, should you not get the USDH ticker?
Will you continue working on the proposal that you submitted?
Uh, up first we have Max.
Yeah.
So our view is that the Hyperliquid ethos
is about community ownership and putting the network first. You know, at this point, I think
the Hyperliquid airdrop is probably the biggest crypto wealth effect of all time. You know,
upwards of $16 billion were given away to early users. And that sets the tone for how the ecosystem
has developed from there.
You know, I think a lot of the teams
that have been building on Hyperliquid
have embraced that.
And we, you know, it should be continued, right?
And when we talk about being network first, right,
we've seen time and time again
that as Hyperliquid has grown,
it has not been treated as a first-class citizen by
infrastructure providers in this industry. Like we've had to bang our head against the wall,
right? Like every single developer in the ecosystem, you know, to get support for Hyperliquid.
And, you know, even the projects in the ecosystem kind of reflect that, right? Like UNIT is homegrown as this is one example.
And so continuing that spirit on and entrusting USDH, right,
to a team that is completely and utterly aligned with Hyperliquid
and the continued growth of that network is very important.
As for conflicts of interest, you know, as I mentioned earlier, I have made
investments throughout the Hyperliquid ecosystem. I'm also an advisor to the Hyperliquid, well,
the Hype Digital Asset Treasury Company, Hyperion DeFi, but I do not spend any time outside the
Hyperliquid eco. And Anish, my co-founder can speak to our view on,
you know, we're deploying a stable coin,
regardless if we get ticker.
So I'll hand it over to Anish for a quick second there.
Yeah, to be clear,
we started building this company months ago
to give Hyperliquid the stable coin it needs.
We will launch a stable coin on Hyperliquid next week with or without the USDH ticker.
And we think the ticker is just step one of our journey to building a native stablecoin
that Hyperliquid deserves.
Right on.
Appreciate it.
Next we have
Nassim.
Sounds great.
So what is
Hyperliquid's ethos?
Really building the
thing that it's been pretty clear that
focusing on building the best product
in the market, both from
a UX standpoint and also just
developer friendliness that then brings the right developers and teams and uh traders that works um
i think that this is kind of this pragmatic decentralization that does not compromise on
user and developer experience uh with a neutral foundation.
I think that having the foundation actually be much less involved in the process
has pushed many more of the infrastructure providers to put their best foot forward
and really an open conversation.
I'm glad that we're having all this in the open.
That's pretty rare, obviously,
typically for the issuance of stablecoins.
And building really an organic culture
around the community
has been really, I think, important to the community.
And for us, the way we see ourselves
is really a neutral partner
that works with ecosystems, institutions,
and enterprises who want to launch and grow their stablecoin ecosystem. I think that the Hyperliquid community has realized very quickly that the economics were not on, you know, stablecoins living on the chain or not accruing to them and not bringing value back to them.
And, you know, we do not have to them and you know we do not have our
own stable coin we do not have our own chain we do not have our own um exchange we really act as a
neutral partner uh and you know if there there are teams that uh believe that they're better suited
and because they know better the community they know better the incentive structures that will make the stablecoin successful we want to offer the
best financial tools for them at the end of the day you need the technology the operations and
the regulatory compliance as well as the banking relationships to make a stablecoin work and we
believe that we bring the best of that and so we would love to work not just on an island somewhere,
but really with the community, with the best teams in the community
to provide this underlying financial infrastructure,
regulated financial infrastructure that has no conflict of interest, I would say.
Perfect. Appreciate it, Nassim.
Next, we have Sean.
Yeah, so when I think about the hyperliquid ethos, it's really about building the best
product possible.
That's where everything starts from.
When you build the best product possible, you push the boundaries of what's possible
with the blockchain, naturally, people are going gonna come, they're gonna use it.
And this is only possible if you have and attract
the best engineers possible, so that's important too.
And then the second part is giving as much back
to the community in a transparent way.
So I think Frax and Hyperliquid have the same DNA
in this regard.
We've both shipped incredible innovations in DeFi
with a small team of elite engineers.
Frax is mostly engineers.
There's about a dozen of us.
Well, I'm not an engineer, but they have shipped incredible things.
Some might not know this, but Drake on this call, CTO of Agora, is actually used to be a Frax dev and was building our awesome lending product, FraxLen.
So the Frax Mafia is very strong throughout DeFi.
In terms of conflicts of interest, yeah, we do issue our own branded stablecoin.
We have our own blockchain.
I actually would be concerned if someone proposing here didn't have their own products, but we view this as a feature, not as a bug.
We would certainly make scaling USDH a priority.
If selected, we would have a dedicated USDH DeFi growth lead
to assure that it's a successful product.
And we're very experienced with doing these sort of DeFi scaling.
All right, appreciate it, Sean. Up next, we have Rune.
So I think the core ethos of Hyper liquid is no nonsense business right focusing on building
product charging fees and that's how you create value and users are happy and token holders are
happy and that's one of the things that i find really exciting about it, that the community has that crypto spirit and sort of euphoria and pumpiness to it, which can be really fun when it's built on something real, which Hyperliquid is a very rare case of that.
And so from that perspective, there's just this very natural alignment between Sky and
Hyperliquid because Sky has the same approach, but maybe it's just a lot more, I guess, technical
and sort of nerdy in many ways. But yeah, I mean, as I was saying earlier no matter what sky was already looking into deploying various
projects on on hyperliquid and most importantly figuring out how we could access the various
collect like asset allocation opportunities that hyperliquid has which these new bridges will help
with and of course it will be even more like it will be even more powerful to be able to do it with USTH,
because that would just lower the risk from the perspective of Sky.
But in any case, it's going to happen.
And even things like Hyperliquid Star, which is this specialized subproject
that's going to be growing USTH or just generally growing Sky's presence on
Hyperliquid. That will happen regardless. And that was already planned for months.
And so Sky does issue USDS. And I think the point is like, it's pretty important you already
have a stablecoin, obviously, if you're going to try to grow something like USGH. But what's
interesting about Sky is that Sky core itself is positioned to be more of a regulator of its own ecosystem with USDS, USDH and any other stable point in the ecosystem.
All just being sort of autonomous projects where Sky has no particular interest in any one of them, but rather focuses on building a level playing field.
And that just results in very good solid foundations
for scalability, synergy, and growth and innovation.
All right.
Appreciate it, Arun.
Up next, we have Bal.
Yeah. I'll take this one again. You know, I think we at Paxos Labs, we all share the same idea that, you know, Hyperliquid is great products, community first, and ensuring that value gets driven back to the native token hype.
that value gets driven back to the native token hype.
That's what everybody wants to see.
And I think that's also what we believe and what we've all loved about Hyperliquid from the inception is the ability to put your money where your mouth is,
ship great products and buy back the hype token.
Jeff has done a great job of that.
And I think we really want to follow in line there.
in line there. With our experience, Paxos Labs offers structured products, stable coins,
and managed primitives. We've been working very closely with a lot of the different
ecosystem participants, Volantis, Hyperland, Felix, HyperFi, all the DEXs, Pendle, etc. to bootstrap products already as it is in the
ecosystem. And we have the same plans ready for something like USDH. We want to ensure that it's
enabled as the core quote asset for any HIP3 markets. We want to ensure that the most impactful pairs are paired against it and hip one markets and i think like
the ability to be able to bring usdh from hyper evm to hyper core without having to swap and just
be able to go into a perps trade for example um is a real unlock that will just take Hyperliquid to the next level.
Now, that's on the technical side.
From our side as Paxos Labs,
we were already planning on bringing all of this to Hyperliquid.
I think these technical unlocks just make the offering so much better.
We bought the ticker USDG literally the night before the announcement went live for USDH.
We had the idea to go forward with a consortium model,
and then we decided, hey, let's throw our hat in the ring here.
We already had a plan to do it.
We should do it.
We should go all the way and do it the right way.
So yeah, I think Hyperliquid Ethos, we are completely aligned.
And really, we just want to see this grow and grow for the community.
We are planning to have this be our flagship product, and it'll be our main focus going forward.
And I'll just add on there, similar to some of the other speakers I've shared, Paxos has years of experience issuing stable coins. And we think for an ecosystem of the scale and
ambition of Hyperliquid, you should have a trusted proven player issuing the stable coin.
And we have issued other stable coins, but the difference here is the other stable coins we've
issued for are always on the behalf of a partner, whether it's
PayPal or in the case of USDG, it's on behalf of the Global Dollar Network, which is backed by
several different institutions. The difference here is we have created a completely separate
team of Paxos Labs that we fully focused on making USDH or any stablecoin in Hyperliquid successful.
And we think we've combined these two teams to create a perfect solution.
All right.
Thanks, Val.
I appreciate your time.
Next up, we have Drake.
Hey, thanks.
You know, I think there's not much more to say on the Hyperliquid ethos, but I think
to me, it's building the best product on the market.
I think this is something that, without shortcuts, I'll say.
I think Hyperliquid at least is known for being super user experience and product focused without kind of taking some of the shortcuts that other protocols or competitors might take.
competitors might take. I think they've done an excellent job of retaining decentralization and
credible neutrality with also remaining to let value accrue to the users in the community.
Like I said in my intro, I think in many ways, Hyperliquid is sort of the dream for people that
have been building a crypto for a long time. There were three parts of this question. I think
ethos, conflicts of interest, and will you continue building on Hyperliquid?
So in terms of conflict of interest, I mean, Agora has our flagship stablecoin, AUSD, and we've actually also built several white-label stablecoins.
I think that experience, I would almost consider a prerequisite to launching a stablecoin on Hyperliquid at the scale of billions.
And I think unlike other teams, we're also the actual issuer.
And at the issuer level, we don't have any conflicts of interest.
We don't have a chain, and we never will.
We don't have a governance token.
We're here to build a platform for stablecoin issuance.
This is our bread and butter.
This is how we believe we make money.
And so I think we're also potentially licensed
specifically for the issuance of stablecoins.
We don't rely on someone else's licenses.
We don't rely on MTLs.
And there's a lot of power in that.
I think having a basket of issuers or being sort of issuer agnostic doesn't actually help the risk profile.
It actually hurts it because, you know, each piece of the puzzle is a piece that goes wrong.
So you're just compounding counterparty risk if you go that route.
Absolutely, we're going to keep continuing to build on Hyperliquid.
I think anyone who doesn't is just missing out, right?
This is one of the most successful crypto products to come out largely ever.
And we're super excited to keep going and live the dream with everyone else.
All right. Appreciate it, Drake.
All right. So now we're moving on to the third question.
This one is a big topic within the hyperliquid community. Do you intend to allocate funds for
hype buybacks from the yield? And is there a strategy in place to redirect revenues to the
assistance fund? Additionally to this question,
will there be some sort of transparency regarding revenue split,
either through on-chain reporting or periodic disclosures,
and how do you plan to enforce this?
First up, we have Nassim.
Yeah, so what we propose is allocating 90% of the USDH reserve interest across the board on growth of the USDH currency and the hype token and the hyper liquid ecosystem.
The way we think about it is that there's going to be different liquidity for USDH pairs,
as well as incentives to leverage USDH as a base asset
for new markets that get created on hyperliquid
and hopefully over time in different ecosystems.
So the way we are thinking about that split is programmatically redirecting 50% of the reserve interest to the assistance funds, 40% towards incentives for builders. and liquidity providers, and then 5% that is reinvested directly into USDH and high
token growth directly contributing to the liquidity of existing payers, seeding liquidity
in new markets, listing exchanges, retainers for market makers, and just growing adoption.
I think that it includes also kind of partnerships
like card networks and other things that do cost money
and that are extremely important for, I think,
paid products as well, not just trading,
but also paid products to be built on top of USDH.
And so those things, I think, are pretty critical.
As to buybacks, I think that the most important thing
in the short term is really ceding the liquidity
and then incentivizing the usage, as well as building rewards for the people
building in the hyperliquid ecosystem. And then over time, I think that once things are more
stable and that the liquidity is there, turning things towards more buybacks that then create
more value for high holders.
I think that then, by the way, on the transparency side, I think that on-chain verification,
our reserve balances, yield flows, distribution events,
all that part is absolutely critical.
It needs to be present.
Periodic disclosures obviously is mandatory
from a regulatory standpoint.
And regulators would obviously want to have a full look
into the split and making sure
that it's automatically honored.
All right, sounds good Nassim, thanks for the answer.
And next up we have Sean.
Yeah, so the headline for Fraxis
that we're giving everything back to the community,
100% of the yield gets
returned. As far as how that gets returned, we've given some examples in our proposal,
but as outsiders, we shouldn't be the ones determining what that exact breakdown is.
So this is something we definitely want to involve hyperliquid governance on to figure
out what the split would be.
Like Nassim said, probably some balance between 100% going to buying hype and
allowing for more growth of USDH or improving other areas of the ecosystem that people think
are weaker points. So I've been talking to validators and community members about what they think on this topic.
But ultimately, this should be up to the hyperliquid community.
I don't think we should be the one saying, you know, exact breakdowns of the percentages, and certainly not now.
And we don't have to figure this out today.
Will there be transparency regarding the revenue split?
As far as transparency, we are on-chain maxis.
We love visualizing the data as well.
So we built FraxNet so that the flow of funds
can all be tracked transparently
throughout our infrastructure,
which handles all aspects of mint, redeem, and earn.
We would also, of course, commit to building out dashboards
to track all this data.
This is something we normally do.
If you go to frax.com slash transparency,
that's like a simple dashboard that shows like what backs our Frax USD.
But then we have our pro user very detailed fax.frax.finance,
where we track basically everything on chain in our ecosystem across FraxSwap,
FraxLend, all of our stable coins.
So we make sure that all of our data is transparent.
As far as rebalancing,
I think once per quarter probably makes sense
and everything would be enforced
through smart contracts, of course.
Got it, appreciate it, Sean.
Up next we have Rune.
Yeah, so I think it would be for Sky powered USDH,
it would be pretty simple.
So every single month, Sky does what's called
a settlement cycle.
And then as part of the settlement cycle,
the maximum possible rate for the
all of the USTH balance
would then be transferred
into some kind of autonomous buyback system,
whichever way the community prefers it.
This is very standard, very straightforward
and comparable to many of the other systems
that Sky is already maintaining and operating
because it's a completely
decentralized native project.
So this is just totally standard.
And of course, would be entirely verifiable.
Well, and then actually, the thing to call out
is also that in parallel with this whole process,
well, for the last several months, Sky had actually been preparing to also basically move its own buyback system to Hyperliquid in order to just get a better execution on Sky's own Sky token buybacks with its profits.
token buybacks with its profits.
So that's another way that it's going to basically
bring more business and more liquidity into hyperliquid.
And we'll currently, the plan is also to go ahead with this
and this will be carried out regardless
of what happens with USTH.
Got it, appreciate the introduction and answers, Ruud.
Up next we have Baal from and answers, Ruud. Up next, we have Bao from...
Yep.
So, yeah, you know, this is something we've gotten a lot of feedback on from the community since we shared our first proposal.
And that's something I've actually loved about this process is getting so much feedback and commentary in the Discord and on Twitter from the community of how we can make this structure right and in most community
aligned. And so we do plan to change some aspects of our proposal, particularly with
the focus on driving more of the revenues back towards the assistance fund. So there's
a couple of changes we're going to roll out later today. But the idea is that at least
50% of the revenues will go to the assistance fund from the start,
scaling all the way up to 90 or 95% over time as the asset gets to scale.
Additionally, we also plan to not take any revenue on this asset until the asset reaches scale.
And so we're going to share more details on this later today,
but we've gotten so much great feedback and thank you to the community for that.
And we're going to put out an updated proposal that we hope is more aligned to what the community is looking for.
And we'll look for additional feedback there.
In terms of transparency reporting, I was actually looking at this today.
Paxos has been reporting, doing audited stablecoin reserve reporting since September of 2018. So it's been a full seven years of every month,
us presenting audited transparency around our stable coins. And this is the kind of like level
of systems and transparency that we'll continue to do for USDH. Obviously that is off chain and
like fully regulated and audited transparency reporting. We also intend to do on chain reporting
to ensure the community fully understands exactly what's backing their asset and presenting that in an easy-to-consume
way. And so this is one of our strengths. We've been doing it for years, and we'll continue to
do it with USDH. Appreciate the answer. Next up, we have Drake.
Dancer, next up we have Drake.
Yeah, so I think like the headline here, similar to Frax, is just that, you know, we believe that 100% of the share is essentially table stakes.
And, you know, our business model doesn't rely on rent seeking from our users capital.
And, you know, Trump is probably going to get his Fed pick and rates are going to go down, right?
So any business that is relying on that is going to have his Fed pick and rates are going to go down. So any business that is relying on that
is going to have a hard time. I think in terms of the split of that, we didn't get any heads up or
any early heads up that this ticker was going to open. So we put together our proposal and our
coalition relatively quickly. And I think we originally proposed 100% to the assistance fund,
but we've been in the Discord talking to users and speaking to the, some of the bigger validators. And I think, you know, our point is like, you know, we shouldn't
decide this, it should be up to the, to the community. And, and, you know, we're sort of
open to whatever that looks like in terms of an actual split. Transparency, I think, you know,
we, as part of our regulatory requirements, we are required to have audits.
We have a proof of reserves today from Chaos Labs, and, you know, we're working towards more and more of that.
You know, the revenue distribution, again, eventually happens on chain, and, you know, we're happy to build out the mechanisms for that to be auditable and sort of transparent to the community as well.
I appreciate it.
Up next, you have Max.
Our proposal followed the precedent set by both spot markets and what's planned for HIP3
in documentation, which is that the network participates in 50% of fees in those contexts.
And so what we proposed was a 50% burn to the assistance fund
and 50% being reinvested into those interface operators,
HIP3 market deployers, HyperEVM apps
that are pushing its distribution on the front lines.
We think they will be the best positioned
to make use of every marginal dollar
for the purpose of their business
and expanding those markets and adoption of USDH.
I'll let Anish speak to how we are already working on on-chain
tracking of that commitment.
Thanks, Max.
For our assistance fund contribution,
we have already written an autonomous, immutable smart contract
that is going to stream our revenue yield to the assistance fund
as it's received from our issuer bridge.
our issuer bridge. We're not going to be able to change this smart contract once it's deployed.
We're not going to be able to change this smart contract once it's deployed.
Our commitment is set in stone from day zero, day 365, and day 10,000 of the hyperliquid ecosystem.
Our contract is pending audit, and we're ready to deploy at a standby. Additionally, we're
committing to transparent disclosures with a community-available website where anyone will be able to track usdh at any time
perfect appreciate it um all right um next we have the fourth question um
basically there needs to be a compliant usd stable point so the next question is
explain or share more about how your project will be Genius compliant.
The first person to answer would be Sean.
Yeah, so I want to preface this by saying that, you know, people can be Genius aligned,
but nobody's actually Genius compliant because the licenses haven't been given yet.
So you can only just like build to the Genius standard.
And I think all the top proposals here have built to that standard.
So then it's just a question of which charter do you hold or which legal entity are you working with today for issuance?
So FRAX as an entity for FRAX USD, we will go out and get the Genius license once it's available.
But for USDH specifically, we heard feedback from the community that they wanted a more compliant institutional offering.
So we were already in talks with, but specifically on this point, we now have contracts under review to issue USDH with a federally chartered bank.
now have contracts under review to issue a USDH with a federally chartered bank. Unfortunately,
due to the short timeline here, we weren't able to get final legal sign off on this. But we're
pretty confident that they would want to work with hyperliquid. So what's the legal entity that has
it? It's a federally chartered bank, which means it doesn't need the money transmitter licenses underneath
or go out and get approval from each state individually. It's federally chartered, so
that supersedes that. The name of the regulator that would supervise that, that's the OCC.
And in terms of timeline for issuing a new stablecoin, obviously this would have to go
through audits, but we have elite engineers who are very experienced at doing this thing.
So, you know, it would be as quickly as possible.
Sounds good. Appreciate it.
All right. Up next, we have Gruen.
All right, up next we have Gruen.
Yeah, so first of all, I really strongly believe that the most important thing to comply with is the security of your users.
And the only way to really, you know, achieve that, that's traditional system is starting to embrace crypto and offering licenses and compliance regimes and so on is to do it in a way where you don't have to give up decentralization.
You don't have to give up the advantages that makes crypto interesting in the first place.
crypto interesting in the first place um so the approach that sky is basically offering the
hyper liquid community for usdh is one where initially um it's just a completely decentralized
stable coin right that's that that falls into that basically follows the same approach that
as usds and die um and the Genius Act and actually all these stablecoin regulations
are actually not designed for decentralized assets, right?
Because they're meant to protect users against a centralized issuer
that is corrupt or incompetent or something like that, right?
So you already have a lot of the protections out of the box
by using a decentralized system.
However, there's obviously a lot of like protections out of the box by using a decentralized system. However, there's obviously a lot of just stamp of approval
and just sort of additional clarity
that can be very beneficial from compliance
and from aligning with regulatory frameworks.
So our approach is to basically let the community decide
itself how it wants to basically make those trade-offs with usgh because it
is certainly possible to use you know highly decentralized infrastructure to still basically
make whatever modifications necessary to fulfill the requirements set by regulators obviously
it's a lot harder to get this done
if you have to actually teach them
what it means to be a decentralized system,
and you have to walk them through all the benefits.
But on the other hand, it's also the upside.
It's just like beyond anything else, right?
Because decentralization is the real advantage
of this entire industry.
100%. All right. So next up, we have Dal.
Yeah. Thank you. So what I just wanted to start with is in the Genius Act, what is very clear is that the regulated issuer must have a state charter or a federal charter.
regulated issuer must have a state charter or a federal charter. And this is important for
anyone that is going to be the issuer of this. And Paxos today holds a New York state charter
and has approval to transition to an OCC federal charter. And what I think is really important
here is we are the issuer. We're not partnering with anyone. There's no one in the background.
And I want to make sure the community knows exactly who they are making the issuer. We're not partnering with anyone. There's no one in the background. And I wanna make sure the community knows exactly
who they are making the issuer of USDH.
And it is Paxos in this case.
We have these licenses.
We've been a state regulated charter longer than anyone.
We are getting an OCC charter.
We're transitioning now.
And so we have both of those entities
that will be Genius compliant.
And this is a requirement.
MTLs are not enough
to be a compliant issuer. You must have a state or a federal charter. And Paxos is the only one
that will have both. The name of the regulator, and right now that's the New York DFS. In the
future, this will be the OCC. And again, I'll reiterate, these licenses are, these charters,
these trussures are hold by Paxos.
These are our charters, no dependencies on anyone else.
We're not partnering with anyone.
The community will know exactly who is the issuer of this asset.
If Paxos is selected.
Got it.
Appreciate it.
Next up we have Drake.
Yeah, I will just echo kind of what other people have said, which Got it. Appreciate it. Next up, we have Drake. and Genious, and Agora is already complying with all of those directly from the legislation.
And we plan to get a OCC charter as well for federal charter. Today, we're prudentially licensed from the Bermuda Monetary Authority, and we have a number of U.S. state licenses
for money transmission. And I do think it is important to just reiterate kind of what
the PAXS guys were saying that this is, you know, we are the issuer and getting these charters is
a big undertaking. It's not something that if you've never done before, you can just sort of
sign up for. It's a multi-year process. And so, you know, we just finished one with the BMA
and we're gearing up now to start even ahead of the 120 days.
It'll probably take the OCC to finalize their rules and come out with the newest charter because we know that's what it takes.
We've done it before.
In terms of timeline for issuing a new stablecoin, look, we've issued a number of white-lible stables already.
For us, this is like a week.
There are a number of different ways you can structure stable coins and might level stable coins and so some of the different structures
require slightly different but you know the short story here is we're ready to go
all right up next we have max i'll let adil from bridge speak to this, but I want to make something very clear.
Aside from the Sky team and aside from the Frax team, this conversation and what we're being juxtaposed against are single issuers.
A ticker cannot be transferred once it is given or it's's won, right, on hyperliquid.
And so for everyone that has expressed concern
about vendor lock-in risk as far as issuance goes,
should be very aware of that.
But I'll hand it over to Adil to speak to,
how we're thinking about this with Bridge.
Hey everyone, I'm Adil from Bridge.
We're a stablecoin infrastructure company partnering
with the Native Markets team. Today we power billions of dollars of monthly issuance and
orchestration volumes through our platform and we're very excited to support this project. So
Bridge operates our stablecoin issuance and orchestration programs through FinCEN registered
money services business and MSB and state money transmission licenses. And I think one thing that's worth noting is in a genius ready world,
the current measure of safety is not the sort of licenses you hold today,
but how your issuance program is architected against the genius framework for tomorrow.
And Bridge operates our issuance program in preparations for genius compliance,
including all its core standards, one for one backing with high quality liquid assets
and true short term T-bills with low maturity.
Segregating reserves from operational funds.
Regular third-party certification on reserves
as well as real-time transparency at API endpoints.
Compliance with AML and info security
and cybersecurity standards.
And I think all of these are the foundation
for us to be able to issue a Genius Compliance
stablecoin in the future.
Finally, I think we're ready to launch as soon as next week with the Native Markets team,
and they can speak more towards that.
All right. Next, we have Nassim.
So Bashan is one of the most regulated U.S. companies in the global crypto industry.
We have also a New York Trust chartered company and another subsidiary that is registered as an MSB with Vincen and dozens of MTLs.
I think it's just echoing everything that has been said by the Vaxos team on the Genius compliance.
There are requirements, clear requirements to have a federal or state charter for Genius compliance.
Those typically take like two to three years on average to obtain today.
And sometimes more, especially right now.
I think that I'm hearing a lot of backlog.
And so timelines might slip even longer than that.
I think that it's important for the hype community, regardless of the path, to pick
a provider that has existing compliance today with the Genius Act and the requirements, especially on the charter side.
Money transmitter licenses, just to be clear with everyone, that's what Bitcoin ATM operators have.
And if any payment company, any company kind of holding and moving money could issue, that would be pretty worrisome. So one thing that I want to ensure is that everyone understands that it's really important
to have a state or federal charter today and to interface directly with the issuer as well.
I think that it's also important to combine that with the most modern technology, not just having a neural trust shutter, which obviously kind of takes time to get things reviewed.
That's just being very transparent.
Compliance takes time with, you know, the review of all the compliance controls and policies, all these things.
And so getting a regulated, genius, compliant, approved stablecoin just
takes time. That's the reality. But you want to combine that with the best modern technology.
Regulator would be New York Trust Charter. Bastion would be the issuer. And we would be
essentially working with the regulators
on getting full approval that is compliant
with all the upcoming Genius requirements.
Thank you, Nassim.
Thanks everyone for the answers.
The next question is related to being a natively minted stablecoin.
I know that some of you answered partly to this earlier,
but hope you can speak again to this really quickly.
So would your version of USDH be natively minted
on hyperliquid or bridge slash wrapped?
First up, we have Arun.
Yeah, so I guess from a technical perspective,
it would be bridged as in it would be basically another core asset coming out of the Sky protocol on Ethereum mainnet, which would then be bridged across to Hyperliquid. Sky basically backs its stablecoins.
In practice, the place where you would sort of have the USDH enter circulation through user action would actually be on Hyperliquid perp markets and DeFi products on the HyperEVM and so on.
So basically, in practice, the users
would actually be accessing liquidity directly
and hyperliquid natively.
And the collateral of the stablecoin itself would be collateral native to hyperliquid,
but all connected together with the broader liquidity and the broader ecosystem through
the core infrastructure on Ethereum mainnet.
Thanks, Runev.
All right, next we have Ball.
Yep.
So we do very much intend to issue a USDH natively on HyperCore, again, removing the
need to lock up USDC on Arbitrum and bridge it over.
Not only do we plan to issue this natively and solve this pain point for the Hyperliquid
ecosystem, we also bring fiat rails
and and multi-chain stablecoin infrastructure so um our goal is to make it as seamless as possible
to mint and redeem on chain um what so whether you're coming from fiat or you're coming from
another stable coin from another ecosystem um we will make that interoperable with usdh on hyper
core um again like i think a big part of this is,
this isn't just about issuing on day one.
It's about making sure this is successful
and a seamless user experience for Hyperliquid users.
Paxos has the infrastructure and the banking rails
to make this as seamless as possible,
and not to mention the integrations
with all the on and off ramp providers,
as well as enterprise distribution platforms.
Thanks, Val.
Next, Drake?
Yeah, we'll be natively minting on Hyper,
and I think the community deserves nothing less.
People should be wrapping and bridging USDH around the ecosystem, not the other way around.
So for us, that's table stakes and 100% should be natively minted.
Got it.
Appreciate it.
Next up, Max.
I'll take this one.
Native markets, USDH, will be natively minted on HyperEVM
and a HIP1 token linked on HyperCore.
We think it's critical for the HyperLiquid ecosystem
that the stable coin of choice for the community
be one that uses HyperLiquid as its ledger of record.
It would be incredibly out of this world
if we were to choose something for this ecosystem
that was a bridge token
or a token wrapping another stablecoin.
In that way, we think it's critical that our USDH
use Hyperliquid as its record of ledger.
To that extent, we're going to be partnering
with various Hyperliquid ecosystem projects to integrate USDH, both at the hyper EVM level and across hypercore markets, in the spot markets, in the HIP3 markets that come up, and fundamentally from day zero, being hyperliquid aligned.
There is nothing, no token should be picked that does not offer those guarantees.
Thank you, Anish. Next up, Nassim. no token should be picked that does not offer those guarantees thank you anish next up masin yeah i think uh i mean most definitely usdh should be the
the full stacks to bitcoin not a wrapped asset uh it's you usdh really deserves to be the l1 rather
than the l2 uh should have its own legally segregated bankruptcy remote reserves
with high quality tokenized money market funds, full traceability of the
interest from the reserves, where it flows back to and kind of the
performance of the incentives tied to that. And I think that more importantly,
having that as the base for other stablecoins, not just within the hyperliquid ecosystem, but
as others mentioned, kind of within other ecosystems. We are powering a lot of global payments use cases, various use cases, you know, we're again neutral stablecoin infrastructure.
And I believe that many companies would be very excited to issue a stablecoin on top of USDH as wraps stablecoins to really leverage all the strength, liquidity and distribution of USDH, which
would then kind of activate very strong network effects and flywheel effects back to USDH.
Again, very excited to work with the community on making this happen.
I believe that there will be a lot of hyperliquid native teams as well as non-hyperliquid native
teams that will be excited to build wrapped assets
on top of it.
And we have the infrastructure for that, not just for the full stack, but also wrapping
the stablecoins that we issue.
That's why we're the best neutral partner is that we really launch and then grow your
ecosystem by enabling other stablecoins to be built on top of yours over time.
Thank you, Nassib. Next, Sean?
Yeah, so our initial proposal was to natively mint USDH,
but then back it with Frax USD, just because that was the quickest way to execute,
we thought, and plug it into our existing infrastructure and be fully audited.
But we realized that like
even though we have 100% confidence in our stack, the hyperliquid community doesn't want an extra
layer. And that totally makes sense. And I think that's what other people here have been echoing.
A lot of these stablecoin as a service providers do kind of have an extra layer. And you're seeing
these stablecoins that are like a layer upon a layer upon a layer and hyperliquid deserves better
than that so in our updated proposal we specify that usdh will be issued completely standalone
and native of course it will still be able to use our multi-chain and on and off-ramp
infrastructure you know we've built that all from scratch so we'll be able to
use that for usdh as well i think something that Beau has been mentioning a lot
is that this process has been phenomenal feedback
for us as builders.
I completely agree.
So we're all driving towards the same mission here
to help grow on-chain finance.
So I'm not going to name names,
but we have a common enemy in stable coins
that don't give back to their communities.
So regardless of the outcome,
I think Hyperliquid unlocking 200 plus million per year to grow their ecosystem is awesome
um and we've built our entire offering around passing back uh this sort of this yield if you're
bringing the money you should get the yield gotcha appreciate it sean i think we all know who that is
Gotcha. Appreciate it, Sean. I think we all know who that is.
All right, cool. So moving on, the last question for this segment would be explain your minting and burning redemption fee structure.
First up, we have Val.
earlier, you know, our goal is like, we think like priority number one after getting USDH issued is
ensuring that the mint and redeem infrastructure is as seamless as possible. And so not only are
we bringing a variety of banking rails and orchestration capabilities, but we don't plan
to charge fees in either direction. We think that this is the most important kind of core capability of a stablecoin,
of can people get in and out of it, and
it's something we've been doing for years
at massive scale, and we
plan to bring those capabilities to
USDH.
Got it. Appreciate it, Paul. Next,
we have Drake.
Yeah, we feel very similarly. There shouldn't be any fees for minting and redemption. And we're in the process of also rolling out a bunch of liquidity against some of the biggest RWAs like Biddle and Vbill and some of the bigger stable coins so that, you know, if you want to go the fiat route, we're also, you know, we have that directly with us.
We also do, you know, retail on and offboarding, you know, partnering with MoonPay.
And if you want to do, you know, fully atomic on chain in and out at par, we also offer that.
So, you know, I think this is the best way to run a stable coin is public good.
Thanks, Rick.
Nix, Max?
We won't be charging any Mint or Redeem fees.
Users will be able to KYB through Bridge
and then gain access to our Mint and Redeem API
or also use an institutional dashboard
either to send FiatWire or USDC from a number of integrated chains,
obviously Arbitrum being the first one supported.
And yeah, so what we're able to also leverage, right,
is Bridges orchestration product,
meaning users can come to the Hyper-EVM and HyperCore with
USTH from any number of supported chains and assets as we come to support them in the
initial weeks after launch.
Thank you, Max.
Next, Nassim? Yeah, so free minting and redemptions.
I think that having infrastructure, stablecoin orchestration infrastructure
that can handle not only US dollar fiat, but also non-US dollar fiat currencies
and other stablecoins is extremely important as well.
We take the importance essentially of USDH to be included as part of not just trading,
but payment flows again globally is extremely important.
You need to be able to make USDH extremely accessible for any use case that requires
or can be powered by stablecoins.
And so this part is very important.
I would add that part of our proposal was also trying to incentivize and convert more
and more of the USDC to USDH on hyperliquid.
There's a ton of it.
It is going to cost money to move that very sticky USDC liquidity. And so I think that having also part
of the reserve interest revenue directed towards conversion of massive amounts of USDC to USDH is
going to be very critical to build this sticky USDHh liquidity in um on hyperliquid so um was
also wanted to to plug that but very similar to other options here with global banking connectivity
thank you nasim next up sean
yeah i'll keep it short here um we like, are not charging fees for minting and redemption.
And similarly, we will have minting and redemption from common stablecoins as well as bank on
and off ramps. That's all I got.
Thanks, Sean. Last thing, Roon? Yeah, so as a decentralized stablecoin protocol, Sky focuses on redemption through other rails,
basically.
Right now, it's primarily USDC, so that's where the flashy 2.2 billion USDC liquidity
figure comes from. But this is also going to expand further
into also enabling Tether as a rail.
And so currently, the entire 2.2 billion USDC
that is basically available as instant liquidity
for the Sky stable points is completely one-to-one
with no fee at all.
So in theory, you'd be able to off-ramp 2.2 billion USGH
on day one in one transaction without fees.
And it's possible that this could change over time
in order to basically balance
between multiple different rails,
because you can't artificially of you cannot officially keep better
liquidity to one without then also kind of having them interact weirdly together uh and
but but the other thing that this interacts with is also just simply the the the return
that usdh itself would generate for the hype of 5x so I think all in all, this is something that will be,
you know, at first it will be completely
without transaction fees.
And then over time, it'll have to be considered
what is actually the optimal setup for liquidity
and user experience and efficiency
and economics of the whole system.
And then finally, it is also the plan
that Sky will build out actual native rails, meaning essentially
you'd have collateral sitting as money market funds in banks, basically ready to actually
immediately convert USDH and turn them into bank transfers.
But it's just, it's so difficult to stand up this kind of infrastructure at the scale USDC and USDT has available now, for instance.
So it's just not the current focus because what's most important, in my opinion, is like raw, reliable bandwidth and the ability to really handle billions in liquidity.
Thanks, Rune.
All right, so I think that is the end of the first segment.
Now we will head into Crossfire slash Ebayt.
We open the floor for speakers to directly respond to one another.
This session will run for 30 minutes.
We will help to moderate the flow.
So this is, yeah, this is open and please feel free to share anything you want to speak about.
Um, I think we also saw that Ethena just put in a proposal as well.
So probably you can speak about all those different things.
Um, we run up to 30 minutes, but we could bring it down
or have less of time too.
So please go ahead.
I can go first.
You know, I think like a big question of a lot of this
is like the hyperliquid nativity, being Hyperliquid native, you know, in my opinion, at least that starts with deploying a project on Hyperliquid.
I know a lot of us here may be like specifically focused on stable coins.
I also recognize, you know, Max, you've launched a stablecoin already on Hyperliquid
USTHL in collaboration with Felix. I'm just curious, like, what has stopped you guys from
deploying products on Hyperliquid until now, until this proposal came out? One piece of insight that
I think I mentioned earlier is like, you know, Papsos Labs, formerly Nucleus Molecular
Labs, we partnered with taking rewards to create the looping collective. And we had L-Hype Live
day one on the Hyper-EVM. And it's been a mission of ours to stay ahead of like all the protocol
upgrades, incorporate for writer to our product and really just be a part of the development process of the ecosystem.
So the stable coin, I feel like, is the next natural step.
And this is actually something that we went directly to Paxos for when they were looking to acquire us.
And we said, look, this is the proof in the pudding of something that we've built already on Hyperliquid.
And we think that we can add something on top there.
So I guess the real question is, what stopped you from coming to Hyperliquid up until now?
I can take this one or start off the discussion.
I think, you know, at Agora, when we go to a new chain, it's native and it comes with like the full suite of products that we offer. And so for us, it's, you know, we don't just spew a bunch of contract deployments
and like kind of set it and forget it. We come in with like a strategy to drive liquidity,
a strategy to integrate with, you know, all of the infrastructure that comes along with
being, you know, prudentially regulated, which includes, you know, compliance monitoring,
blockchain monitoring, institutional grade, key custody, all of these things.
And so we choose the places that we deploy carefully and we make sure that we have a clear strategy to actually get traction.
I think it's hard to displace a stablecoin that has somewhat preferential treatment in an ecosystem sort of like USDC does today.
And I mean, that's the real
reason. I think it's been on our list of like potential next steps. But until now, you know,
we didn't see that there was a strong path to disrupt the predominant, you know, collateral
token or stablecoin USDC. I don't know if other people have different strategies, of course.
I'm happy to speak to this next for a little bit. I will say two things. The first is that different strategies, of course.
I'm happy to speak to this next for a little bit. I will say two things.
The first is that it has been Max's vision
and our vision as a team for many months,
Max almost a year,
to have a native stable coin for Hyperliquid.
And for us, our team started many months ago
on this vision of delivering this.
And with or without the USDH ticker, we think it's, of course, right time, right place for the claim.
But with or without it, we will be launching a stablecoin and putting our best foot forward to grow that stablecoin in the hyperliquid ecosystem this month.
our extended proposal that we posted a few days ago, we listed out all of the variety of test
tokens that we have already used and deployed on the hyperliquid ecosystem over the last couple
of weeks. That includes a mainnet HIP1 token, DiBloon, which we've been using as a test token
with our onboarded institutions for many weeks at this point. And so to that point, for us,
this has been a concerted effort even before any inkling of a USDH ticker was available.
And we plan to follow through with our plans of launching this stablecoin and making it the best one that's available in the hyperliquid ecosystem.
Yeah, I'll just echo what Drake said.
I mean, normally we have a process for deploying to do chains, which involves like, you know,
reaching out to the core team and seeing like, you know, what protocols we should be working
with, what like sort of incentives we can get.
And obviously we bring our own incentives too.
What we found is that Hyperliquid is kind of a, you know, build it and people
will come mentality, which is great. That's what Frax has as well. So as I said, we were in the
process of deploying our assets to Hyperliquid and setting up the custom infrastructure needed to get
our assets over there before we heard about this proposal. Yeah, so we're still going to move forward with that, even if we don't get the USDH
ticker. Oh, I'd also like to add that, yeah, like you should evaluate projects based on like
their ethos of building and how they build. Hyperlic, like early alignment is really important.
And I think if you want to go with the early alignment, Max is just a clear choice here.
I think like this is one of the most consequential decisions that an ecosystem can make who provides
their primary stable coin.
So I think it's worth just researching deeper into the projects that are proposing and seeing how they operate within different chains.
I've got a question for kind of some folks on the regulatory side.
Bo, can I just answer the previous one I was wearing?
Yeah, sure.
So, yeah, thank you so much uh and i'll
i'll hand it over to you right after um i think that it's interesting because for us on the
bastion side we've actually reached out uh to a couple folks on the core uh hyperliquid team over
the last two months uh to try to get an institutional grade stablecoin build for
the ecosystem and i think that, as everyone knows,
this kind of like this ruthless and, you know,
neutrality from the team.
And what we were really waiting for was a unified effort to displace the incredibly sticky USDC liquidity.
It's not just the work of an issuer.
At the end of the day, it has to be the
entire community that pushes into the direction because it takes a lot of people and capital to
be able to displace so many billions of dollars of liquidity from a given stablecoin that does not
generate revenue for the ecosystem. And so this is something that we were waiting for quite a bit of
time, have attempted to reach out and we're excited to get in place. Transparently, I think
that it's important to be very honest. We are typically very focused on large enterprises
and institutions. We're in the process of issuing for some of the largest companies in the world and won those processes against some of the
issuers here. And I think that it's important to outline that we believe specifically that Hyperliquid
is a perfect user-first on-chain ecosystem that really just truly cares about the users, that truly cares about the developers. And so that part is what's critical for us essentially to try to put our
best foot forward. But if it happens in the open, all the better in our opinion.
And can I also make a comment on this before we move on to the next topic?
Please.
Yeah, go ahead.
So well, as I mentioned earlier,
Sky has actually for several months
been building sort of several larger scale projects,
including I think I guess the most consequential is actually looking to move
the burn, the buyback system for the entire Skype protocol natively onto hyperliquid,
just in order to get better right natively aligned talent from the community itself, right?
To tab into the kind of technology that we have in Sky.
to tap into the kind of technology that we have in sky the sky fundamentally is like an ethereum
sort of an ethereum uh derived uh protocol right with a community that sort of has had its roots
in ethereum and this is one of the reasons why it developed what we call the star model right which
is where you sky basically creates these uh compartmentalized
projects called stars uh right now there's like two major ones called spark and grove and they
handle one handles about four billion of the collect portfolio on the other hand is around
two billion of the collateral portfolio and then the entire plan and the entire proposal
the sky usdh proposal uh proposal for growing Hyperliquid revolves
around then also launching and growing and innovating on Hyperliquid through actually
setting up a native team that is connected into the primitives and the technology and
infrastructure that Sky has available.
And the reason why I think this is so much more powerful
and sort of a more monolithic approach
is because of how it can scale further.
Like it's sort of, it's kind of like a cell, right?
That can divide itself,
where if you can set up one independently executing team
that can actually scale and deliver value,
then nothing's stopping you from launching more of them.
So this is kind of how I always envisioned,
this is how Sky sort of taps into new ecosystems.
And currently it's just, Ethereum is really the only place
where the scale and opportunities there
for this to really take off
in the sense of having multiple teams working in parallel but i think hyper liquid
would have the opportunity to do the same thing which is also why sky basically has been looking
at it in stealth mode for so long to figure out when when is sort of the the right opportunity to
to launch and i think there's just uh you know, I think that the, the basically the energy of the community and the value that exists, the sort of the raw value that exists in a hyper liquid community right now would really create, you know, create, will, will, has the potential to really deliver a type of exponential growth and permissionless innovation when combined with
Sky's technology. So no matter what, that is, of course, happening, because also, as I mentioned
earlier, it is already an ongoing project to also launch a star, regardless of how the USTH vote goes.
Yeah, for sure.
I think there was another question.
Was it by Alex?
I think I have a couple of questions.
Maybe I'll start with one first and go to the other one.
So one of the things we've been thinking about a lot,
and especially from our experience of issuing stable coins,
is how do we actually grow the
distribution and access to the hyper liquid ecosystem and usdh beyond what it currently
is today paxos is the infrastructure provider for some of the largest financial platforms in the
world from paypal to new bank to mercado libre to interactive brokers we currently have a top
three u.S. brokerage
that has trillions of dollars under management
building on Paxos infrastructure,
particularly for our crypto brokerage as a service offering.
And so all of their users will access crypto
through Paxos infrastructure.
And one piece of our vision here
is bringing Hyperliquid to that infrastructure
and making it so both the Hype token,
but also USDH and other Hyperliquid to that infrastructure and making it so both the Hype token, but also
USDH and other Hyperliquid products are accessible to this set of users and capital that sits
completely outside of the crypto ecosystem today. And I think we think this is what 10x is, 100x is
the growth of Hyperliquid as an ecosystem by taking it to the masses. And this is what we
think we're uniquely positioned to. And so my question to the group is,
how are you thinking about growing this asset?
And how are you thinking about growing
the hyperliquid ecosystem beyond just what it is today?
I think I can take sort of, in some sense,
at least an alternative vision for how it can grow.
Because so I basically completely agree with the approach
that we have to we have to sort of make it simpler.
We have to make it regulated.
We have to make it accessible to the normal people
that have been not really been into crypto for a very long time.
And that works by sort of making crypto seem more like Treadfire.
the direction that we ultimately ended up
believing is
the most powerful
and with the most potential in Sky
is to actually
not really build for humans, but
build for machines.
in the end, it's like a human thing
that you need a stamp of approval and you need permission and all of these things that makes it a lot easier to engage with financial products.
From a rational perspective, what you need is actually data.
You need the ability to see and verify, is this a good risk-adjusted return?
Is this a good opportunity?
Is this product the best thing available to me?
And basically, as finance as a whole and society and the entire world increasingly becomes automated and run by AI,
like this fundamental focus on transparent data, efficient mechanisms, right, lack of middlemen and sort of direct access to products and financial primitives, that ultimately, I think, is, in my opinion, is going to completely overshadow any kind of upside. I mean, well, the extremely huge upside that will also exist
from just letting in the masses to use crypto.
But ultimately, I don't think that compares to basically
just how much the machines are going
to make up of the overall usage of the financial system. Again, sir, I think that it's really
critical to focus on the hyperliquid ecosystem first, build a strong
flywheel that converts the existing USDC supply to USDH and have very strong
incentive and towards that and really subsidizing the costs of moving this multi-billion
dollar supply from USDC to USDH. We've seen, just as an example, the PYUSD, really payments-focused,
barely hit $1 billion market cap after two years usdg
big names great jobs but just crossed 500 million dollars after one year it's pretty clear that
hyperliquid doesn't need as much kind of distribution as it needs to convert the existing
sticky liquidity that is just stuck in USDC into USDH.
In our opinion, the most important thing to have, regardless of whether Bastion is selected or not,
should be to have a very strong flywheel effect that incentivizes the conversion of USDC into USDH.
And that every new market built with USDH is built with USDH, sorry, rather than USDC,
which was something that I actually really appreciated in the comments from Max
in the native markets proposal,
is that you want to move everything that is already existing to this financial instrument
that benefits to the entire community,
and then everything new should not kind of drag along with the previous currencies.
It should really be built with USDH. And so I think that this part is important, but you also
want to benefit from a kind of orchestration. You obviously want to make sure that there is some
hyperliquid pay products and other payment products that live on top of it, not just trading.
But I really do think that it
starts really with the ecosystem and really focused on the ecosystem. Yeah, Max, looks like
you want to speak. Yeah, thank you for that. You know, I would just add, right, like the blueprint
for scaling a stablecoin is there, right? Heather and USDC both started out on exchanges and branched
out from there after getting some, you know, critical mass of liquidity. I think what excites us at Native Markets is that Hyperliquid is,
you know, the craziest distribution mechanism we've ever seen, right? Like, especially as,
you know, deploying builder code interfaces gets easier, especially as deploying HIP3 exchanges,
you know, comes to mainnet eventually, anyone with an internet connection and an audience
is going to be able to put forward markets and assets
to anyone else with an internet connection, right?
And so I think we see an opportunity here
where just the nature of Hyperliquid,
if you have an asset that is aligned with builders,
plugs into trader workflows and so on,
gets to ride a very rapidly rising wave here,
especially as Hyperliquid gets more and more recognition and adoption.
And then I would just add, on a more institutional front,
I think people would be maybe surprised by the amount of very large and legacy financial firms and trading firms in particular that are present on Hyperliquid.
And, you know, if you build them a good product, you know, there's your distribution, right?
contribution, right?
So that's kind of how we view it.
Just the opportunity here is immense by virtue of the foundation we get to build on.
And if you believe the future of Hyperliquid is every trading firm worth their salt, running
a validator, and this really being a global financial arena, making sure you have the
right functionality to meet those users' needs where they are is critical in our view.
Yeah, I think Naseem and Max both made excellent points.
I think something that I've been hearing that I wanted to address is people are saying, you know,
And, you know, USTH gets us on Venmo, but like, that's an external product.
The goal here should be focusing on hyperliquid's DeFi ecosystem, attracting
builders, growing new, interesting products so that it's not, you know,
USTH going on to Venmo, it's external capital coming into the hyperliquid
ecosystem because of the advantages of what's being built there.
So I think it's really important to focus first internally
growing that ecosystem and only Frax has the experience
of bootstrapping a chain from scratch.
All right, anyone else?
We are left with about eight minutes for this section.
Yeah, if there's anyone who want to speak to something about distribution channels or anything like that,
I think maybe one thing, if there's no other questions that I have to ask,
thing, if there's no other questions that I have to ask, would be if you could vote for
any other project other than yours based on current proposals, which would it be?
And this is filling from Hanson's AMA.
I'll go first, since no one else wants to take the mic first.
But this is easy for me.
Like Sean mentioned before, I'm originally a Frax developer, so I'll throw my hat in the
ring for Frax.
I think they bring a super unique combination of skills no one else has, but also the institutional
backing.
Yeah, I would definitely say, and kind of touched on that earlier in one of my answers to a question, I do think that ultimately, whichever path the community goes with, it
has to be something that de-risks things from a regulatory standpoint.
And I think that Paxos is best suited for that because just like us, they already have
a New York Trust Charter and are highly de-risking the regulatory front and they're very well
known for that.
And so from that standpoint, I would definitely say go with Paxos if you're not going with
Bashan.
That's a no-brainer to me.
You know, as I mentioned earlier, right,
like our kind of focus at native markets goes beyond the stablecoin, right?
Like it is on scaling that stablecoin,
building financial applications around that stablecoin, right? Like it is on scaling that stablecoin, building, you know, financial applications around that stablecoin and really providing value to the hyperliquid community that way. We went with Bridge because out of the, you know, stablecoin as a service providers
that populate this landscape, they're the ones who most understood our needs and the needs of
the hyperliquid community that we're trying to cater to here. And so, you know, with that in mind, right, like if we couldn't work with Bridge,
we'd want to see that same level of graciousness in understanding what exactly, you know,
a hyperliquid trading firm, right, you know, what is their preference for getting on and off
the system? You know, what our system? What are competitive fees look like?
Those are all ways to judge a specific issuance provider.
And like I said, we found Bridge to be the most competent and the most graceful in recognizing concerns we had in regards to
representing the hyperliquid community on this.
Yeah.
Oh, yeah.
Go ahead, Bill.
No, go ahead, Sean.
You got it.
Okay.
I feel bad for not picking Agora back, Drake.
Agora is going to be fine. They are fantastic.
Yeah.
But if I was going to choose one, I think it would go with, you know, loyalty to early builders, and that would be Max.
I can jump in.
You know, assuming it's not going to be us, I think the two things I would really
look at out of what I think would be the best outcome for the Hyperliquid ecosystem, one
is a provider that is a truly neutral infrastructure provider, one that doesn't have, you know, a competing blockchain or any kind of
like competing interests to that extent.
And one that is really just focused on providing neutral infrastructure.
I think that's criteria one for me.
And then two, you know, I think the teams that have take, have a track record
of taking regulation seriously and going through the effort to obtain those licenses are really important. I know there's a lot of conversation around like,
well, you know, this isn't in place yet, or this will happen, or we plan to do this.
You know, I've been working on regulated stablecoin issuance for the last three to four years, and
it is much, much harder than anyone believes. It takes much, much longer than you might think. And I would be very worried about anyone that says, yeah, we'll get licensed later
because it puts a huge risk to USDH. If you start issuing USDH next week and then you have delays
in your regulatory process, what happens? You have to stop issuing USDH. And I think that's a huge
risk. And so those are the criteria I would look at. And based on those criteria, in my mind, you know, I would look at someone like Bastion
and potentially Agora if they pursue some state or federal licensing.
I'd just like to respond on two things there.
Like, I want to make it very clear to everyone that, you know, MTLs are what Circle uses
today, right?
Like, that is what USDC operates on.
That is the current status quo.
And that is not Genius compliant, just to be clear.
Yeah, and Circle already has an OTC charter application
as well.
Yeah, they have an OTC application.
It is very clear in the Genius Act
that MTLs are not compliant.
So I don't think that's the right comparison to make.
All right, well, let's give Flemek some time to respond.
So, I mean, we've already kind of walked through the timeline on what genius readiness means in our proposal.
So I'll let the audience, you know, come to their own conclusions on that.
The second point I wanted to just raise around, you know, this idea that working with Bridge is, you know, getting, I don't know, that Stripe has any control or involvement here.
I think it's just fear mongering, right?
As I pointed out earlier, we went with Bridge because they were the most graceful in acknowledging these types of concerns.
concerns.
If it ever becomes the case that working with Bridge
is not the best issuance partner for the hyperliquid ecosystem,
we have an off ramp.
I just want to make that clear.
You said that you thought Bridge was the most competent
and most graceful.
Who else did you consider as an issuer
Sorry, Drake, was that addressed to Max?
Oh yeah, sorry, Max.
Earlier you said that you found Bridge to be the most competent and most graceful, and
I just wasn't sure who else you talked to or considered.
We're an issuer and so.
Would have loved to have been considered.
I don't think we were, but.
Yeah, I don't think we were, but.
Yeah, I don't think we had that conversation either.
Our primary considerations were the ability to mint natively on Hyperliquid and to, you know, basically have a mint and redeem product
that we felt could be best integrated with, you know, heavy power user workflows.
But I guess the question is, did you guys consider anyone else besides Bridge? integrated with heavy power user workflows.
But I guess the question is, did you guys consider anyone else besides Bridge?
We did.
We had a multi-month diligence process.
Any names that you could share?
Not sure if Max is having mic issues.
I'm happy to hop in here.
Out of respect for the process, I'm not sure we can share other issuers that we spoke to.
I can say that we spoke to a few issuers over the last couple of months, and Bridge came
last couple of months and Bridge came out in lead for the types of things we needed.
out in lead for the types of things we needed.
Fundamentally, our strategy was that we need to have issuers that are ready to go on Hyper-EVM
as a native destination for minting day zero. And unfortunately, across many of the issuers we spoke
to, that wasn't something they were willing to concede on or be able to offer. And so for us,
Bridge gave us the best speed to value,
a API that we could immediately integrate,
and individuals who are ready to support Hyper-EVM
as a native destination on day zero.
If there are other issuers, I will note
that we are issuer agnostic.
And that is one of the benefits that the Native Markets team
has over, say, Stablecoin as a Service providers themselves
or issuers
themselves, in that when time comes, if there is a need to ever pick another issuer, it
is certainly within the scope of our agreement with Brave.
Yeah, I mean, we would have loved to have that conversation.
You know, we're a core business, a stablecoin issuer as a service.
So, you know, doors always open if you guys want to chat.
As we've mentioned, we've been building on Hyperliquid for a while now.
And so it's definitely something that we're excited about.
So good luck to you guys and Bridge.
Yeah, same here at Agora.
We would love to be part of that convo, whatever happens again.
Certainly, we will follow up on those conversations. At our end, some of the information
around these issuers and their availability,
akin to acquisitions that have been made,
were only made public this week.
And so we're working with the information we had.
Sounds good.
All right.
Yeah, I think generally, we are all pretty aligned here in the success of
Hyperliquid. And we really want to see the ecosystem grow, right? So I think we all have
the same final goal, but eventually there might be different perspectives and ways that we envision
getting there. So I think it's been really interesting to hear all your different answers
to this particular question.
I think it helped me also to see
the awareness of the competition
and also like how you guys could improve.
Yeah, I think it's been very helpful
and been a very good session so far.
I think the last part of this kind of round table
is the audience Q&A.
We'll open the floor for 10 minutes
for five questions from the community.
At this point in time, I want to say
that please make your questions count
because we will direct one question to each team
and we just want to have a good conversation here.
So if anyone wants to ask a question to Paxos,
please raise your hand.
I have one.
Yeah, go ahead.
So question for the Paxos team is,
how do you envision
bootstrapping the
liquidity for
USDH and making it more successful than
some of the other
stablecoins that have been that you guys may have launched in the past.
Sure, happy to answer that. I just wanted to confirm, were we trying to save this time for
audience questions, or are we still doing kind of speaker to speaker? So I'll make sure.
Yeah, I think we can do speaker to speaker and audience.
I think there was no question, no hands raised from the audience.
I'm happy to answer that quickly.
So I think there's a couple different things here.
Obviously, we've already built in the ecosystem and have several structured products that have already cleared $50 million of TVL in the hyperliquid ecosystem.
And so building connectivity there is an obvious starting point, but more specifically, what we have already aligned on internally at Paxos is we will provide
the seeding of liquidity pools off of our balance sheet. We're very well capitalized.
We've provided up to nine figures of liquidity for previous stablecoins and we'll do this again.
We also have deep relationships with market makers. I think one of the most important things we can do
at launch is to leverage our balance sheet,
leverage our relationships to capital
to ensure that users can get out of USDC
and into USDH as efficiently as possible.
All right, appreciate the answer there.
Next, if you have a question for native markets, please raise your hand or any speaker
or audience.
Okay, let me choose one.
Yeah, A-A-A-L-X, please go ahead hey guys can you hear me okay yes sweet yeah thank you for
for everyone's time uh really it was really interesting to hear everyone's
proposal um i just had a question for native markets for Max, because I think many would, well, I can only speak for myself,
but I think I would agree that native markets is like one of the strongest
in terms of like pure hyperliquid alignment.
But I think the strange thing for me is what is the reasoning to choose bridge as the issuer?
Because is there not a kind of direct competitive interest between Stripe launching Tempo and
bridge being owned by Stripe?
Is there any, like, is there a guarantee that bridge would remain completely net neutral
or are there any kind of influencing forces that bridge might not be able
to kind of remain neutral and have to be more supportive of stripe if let's say usdh is kind of
you know becomes this huge dominating kind of stable coin and kind of uh is threatening i don't
know tempo in some way yeah i mean so building out a stable coin for HyperLogrid, you know, first of all,
it's net new territory to some degree, right? Like we have an EVM, but HyperCore is its own beast.
And in speaking with Bridge, it was very clear that they viewed it as a collaboration
in how to go about this and thinking, you know net new product focus on how do we bring this to
Hyperliquid and deal with the nuances and caveats that come with dealing with a non-EVM environment
in HyperCore. On the bridge-stripe relationship front, our agreement is with bridge.
As I've said multiple times before, we have what we believe are necessary off-ramps if there is ever a conflict um i think what i
would want to point out for everyone here is that there is also upside uh in dealing with a stripe
company um you know being able to get onto hyperliquid with Fiat Rails, you know, like that's something we'd be very keen to work on there beyond just our own institutional mint and redeem interface.
And I would also just point out, like, as far as I know, Tempo is like a multi-stable coin chain.
It would be an amazing future if USDH could scale there too, and value continues to accrue
back to hyperliquid.
So I really find these fears to be unfounded.
As Adish pointed out, we are issuer agnostic.
We've made absolutely certain of that.
Like, that has been the biggest consideration in a lot of these, you know, in this whole process for us because we recognize how important
a non-movable ticker can be.
And what you have to keep in mind with that, right?
So yeah, that's my two cents on that.
Yeah, that makes sense.
Thank you, Max.
Appreciate it.
Thanks, Alex, for the question.
All right, next up, if you have a question for Sky or Rune, please raise your hand.
Hey, Arcton, are you there? Yep, yep.
Yeah, I have a question for Native Markets as well, so for Max, because you have been
building in the Hyperliquid ecosystem for quite a while, so you have connections to
many projects, many validators, many people from the community, and so I guess we have connections to many projects, many validators, many people from the community.
And so I guess we have seen this previously in some other governance proposals and voting.
It's when the connections that you have within an ecosystem can be quite unfair to other people
that might have either better proposals or that might have less connections that you have. So how do you ensure that your personal relationships
and the overall vote doesn't favor you
just because you have been the most aligned since the beginning,
therefore you should be the one favored for this choice?
Yeah, I mean, I can appreciate the concern,
but from where I sit, this has been an open process.
We're hosting public debate here.
We have another, you know, public call with the Flowdesk team right after this.
You know, I don't really see the angle in terms of, you know, what unfair advantage there could be.
Everyone is, you know, I think very diligently assessing every proposal.
And we've put our best foot forward.
And, yeah.
Yeah, I think there was something that you said previously during this space.
All right, Atem.
Sorry.
This, for now, it's going to be for Sky.
Just to bring it back.
Yeah.
Anyone with a question for Sky?
No one? All right. no one all right any speakers with a question for sky all right there's one first guy uh pbr
pbr can you hear me yes sir can you hear me yes sir good morning good morning um i guess the
question for them could be about governance because i kind of went back and forth a little
bit in the discord about it how would governance be handled um for usdh going forward because i kind of went back and forth a little bit in the discord about it how would governance
be handled um for usdh going forward because i know they have some other things going on on
different chains with with holders and whatnot um so they could speak on that if you don't mind
thanks appreciate it awesome space yeah this is exactly the type of question I love because Sky at this point is basically
a project that specializes in governance as a means of scaling and ensuring that value
is created in the ecosystem.
So that's really, I mean, that's sort of the long term mission of the USTH proposal is really to come up with the best possible model, essentially for governance of the USTH stablecoin.
And by having the best possible governance, you'll just naturally end up making the best decisions as it relates to things like risk management,
regulatory strategy, and go-to-market strategy,
and all of these things.
Even as the environment changes over time,
the question is, how good is the product itself
at adapting to this?
And so I already briefly mentioned this earlier,
but the initial launch of USDH would involve also the creation of a star, which is a type
of sky ecosystem agent, basically.
So a project that takes actions and has governance and controls capital that were then allocated into hyperliquid and would and most importantly
would have its token be completely farmed exclusively by usdh holders on the hyperliquid
blockchain so you'd end up with having hyperliquid users actually controlling the star and then
determining how should the usdh collateral be allocated into hyperliquid for best risk
adjusted return ultimately.
But then that's still just the beginning.
I mean, the real vision is that USDH itself becomes under the control of basically a more
advanced governance framework that we're creating right now called generators, which
would really mean that you would have a new token, essentially, that
will be launched at a later point in time, also exclusively farmed out on hyperliquid.
So again, ensuring that, first of all, it drives a lot of TVL and just a lot of value
to the hyperliquid ecosystem, but also then that you have hyperliquid users directly actually
controlling USTHh right so the people who use usdh should be directly the ones
who have the upside uh in sort of its individual uh governance performance like it's it's out
performance essentially uh for controlling it well and and and that would be possible in the
very long run and it would be possible to to um to run. And it would be possible to basically customize it
and adapt it to the environment.
This doesn't, of course, mean that it's not going to fully
benefit hyperliquid as well.
It's just that the base deal that is being offered
in hyperliquid, which is just giving the full value
on the stablecoin itself.
That's kind of just that's what sky can offer when
you don't even you know that's kind of rent in some sense right let's just return capital
then you add governance capabilities on top of that and there's a possibility for even more value
creation thank you appreciate appreciate the answer there um up next if you have a question
for frex uh please raise your hand.
Or does any speaker want to ask Frex a question?
Ah, okay.
All right, a non-Canadian, can you hear me?
Sorry, can you hear me?
Yes, please go ahead.
My question is, we're talking about regulation and the genius act so any stable coin company that uh hype i i guess the the biggest point for this i
believe is to make hype more money and make hype token holders more money so the question is how
much let's say there's a billion dollars how much of that income will go to hype every year?
And will hype or the stablecoin issuer
have to pay taxes on it first?
Yeah, so this will be directed, I guess, towards Frex.
Basically, of a billion dollars,
how much probably will that go to hype every year?
Will there be taxes on that?
I don't think this is a FRAX-specific question, and I'm not a tax accountant, so I would have to check on that. But it's, you know, treasury risk- free rate on whatever the TVL is,
which is currently around 4%.
So in general, 40 million would go to hype a year.
Would there also be taxes on that?
I mean, I know you're not a tax accountant,
but would there have to be tax paid?
It probably depends on the country of different people.
Yeah, it depends on, yeah.
Yeah.
Sorry, Anon, I think this is not very FREX directed, so you're gonna have to remove this
for now, but if you have something specific to ask FREX about the proposal, please let
us know. If not, then can I get someone specific to ask Rex about the proposal, please let us know.
If not, then can I get someone else to ask?
If no one has a question, any speakers?
Alright, maybe we can move ahead then.
Does anyone have a question for Agora?
Okay, no questions.
You're off the hook, Jake.
I have a question, Greg.
Okay, he's on the phone.
If he chose us, I'll give him a softball, which is, what are you most looking forward to about Agora in the next year, both for Hyperliquid and then what you have on the horizon?
Yeah, that's a good one. I would say, you know, the last,
Agora is like relatively new. And I would say the last 18 months have been a lot about
laying the infrastructure, both internally as a company and, you know, actual infrastructure
to scale on a global scale, right? I think we all believe that stable coins will sort of 10X
into the trillions from here.
And so I would say, you know, the thing I'm most excited
about is kind of like we built the rocket ship
and we're ready to launch.
So excited for that launch to start.
Awesome, yeah.
Thanks for sharing.
Lastly for Bastien, if there's any question,
please raise your hand.
If the audience doesn't have any question,
maybe one of the speakers, if not we can wrap up.
All right, okay, sounds like no one has a question. So I think to end off, we'll just give each team one minute to share your final thoughts
with the audience and why you are the best candidate or team to handle the responsibility
for USDH.
Let's start off with Max.
Thanks again everyone for joining the call today and hearing us out on our continued proposal. Like we've said before, we believe this is a product
that really meets Hyperliquid users where they are today.
It solves for the biggest concerns around bridged USDC risk
that have, you know, prevented untold amounts of capital
from coming to Hyperliquid to date.
And it also brings back value to our ecosystem.
And ultimately the success of our company is 100% aligned with the success of Hyperliquid.
I don't know if it can get any stronger than that.
Thanks, Max, for the answer there.
Next up, Drake.
Yeah, I would just say that, you know, I'll end this conversation with sort of the list of things that I think should matter to the community as they make a decision about, you know, who they're going to go with. I would say, you know,
whoever you choose should be able to offer the community more than just a stable coin. Obviously, it should be able to offer institutional access
fiat on and off ramps for both retail and in, you know, in size, they should be able to grow
hyper liquid, not just offer a stable coin. I think, you know, I think you should want someone
who has less counterparties, you know, in general, you don't want the token that's a wrapper of a
wrapper of a wrapper or relying on a, relationship with someone else. You should care about actual licensure. You should
care about the regulatory oversight that comes with that, not just because of safety reserves.
Anyone can do safe reserves, but because it's impossible to get excellent banking relationships
in TradFi without licensure, right?
Like this is the thing that I think a lot of people don't fully appreciate is that, you
know, debanking may be over on crypto Twitter, but the truth is all of these banks are still,
they care deeply about this.
And I think you should care about an issuer, you know, or a team having experience actually
launching stable coins, should have deep understanding of what it takes to do that.
There's a lot of people, you know, there's a lot of dead projects who thought they
were going to follow the die playbook or the usdt playbook and that doesn't work today right the
ecosystem is different and so i would say you know look at people who have actually launched stable
coins um and obviously i think we're the best suited to fulfill all that. But even if you don't think we're the best, you should know what matters.
Awesome. Next up here, Sean.
Yeah, so I don't know Jeff personally, but I found out he grew up at the same time as me as the high school at the high school just down the road in Silicon Valley.
And so I understand the Silicon Valley ethos that, you know, makes hyperliquid special, which is that any builder with an idea and purpose can change the world if they ship a like world class product.
And so I think what hyperliquid needs right now isn't more institutions because they're going to come to Hyperliquid regardless as Hyperliquid grows, and they're already coming.
So what it needs is more relentless building, breakthrough products in what is still a young DeFi ecosystem.
So for FRAX, we're the only proposer that has built and scaled its own chain from scratch. We've incubated native DeFi projects and that's exactly the type of experience that I think Hyperliquid and USDH need to grow right now.
Yes, we've also lined up the federal-grade native issuance through our alliance, but our edge is
really DeFi execution. So our proposal is 0% take, on-chain streaming of all income,
multi-chain presence, and experience in attracting top builders.
So I'd ask the Hyperliquid community to just choose the model that aligns most with your builder-first, community-first culture.
Thanks.
Thanks, Sean.
All right, next up, Nassim.
Yeah, I think the community should truly focus on two things.
The first one is neutrality, having a partner that is truly, fully invested in the relationship and launching and growing for a company that needs to have their own success tied to the success of their own partners. You want to make
sure that you're not in a relationship where you have some party that grows your own internal
product and then leverages that down the line to grow their own, build their own. And with us,
there's just no chance of that happening. The other aspect that I would say is extremely important and has been mentioned in this conversation is genius compliance today is paramount.
You want to de-risk things like audits and additional requests from regulators and potentially rejections in the future and so on. You want to make sure that the partner is regulated today with the right licensure to
comply with Genius. And there are only a handful of companies that can do that in the world,
and we're one of them. And then finally, I do think that regardless of the path, those should
be the things that the community think about. And it might take the path of having a single issuer
and then growing into multi-issuer over time to reduce the risks.
But that's like a door that the community should keep open, regardless of this process is kind of de-risking things over time and embracing a culture of being agnostic to the issuer for the benefit of the ecosystem.
Thanks, Nassim. All right. of being agnostic to the issuer for the benefit of the ecosystem.
Thanks, Nassim. All right, we have next ball, and then lastly, Ruin.
Yeah, thank you.
So I think a couple of things for us, right?
I think the most important things to highlight
is we've built and deployed and shipped and grown products
in the Hyper-EVM alongside the ecosystem, alongside
the partners in the ecosystem. And we plan to continue doing so, but we have a proven
track record of doing that. In addition to that, we don't believe that, you know, we
know Hyperliquid is going to keep growing, but we don't believe it's going to keep growing
indefinitely. And we're not just here to ride the coattails of that growth. We're here to
juice that growth. We want to make Hyperliquid 10x bigger, 100x bigger and driving growth through unique avenues
through our own distribution network.
And that's what we're focused on, making Hyperliquid as big as it can be, even juicing the momentum
it already has.
At least a few others mentioned this, but we have a decade of experience doing this.
We've been a regulated stablecoin issuer that has global regulatory coverage and combining that with our
experience and commitment to Hyperliquid I think makes us a really strong choice. And even if it's
not us, I'd hope that the community considers those facts as they're making their choice.
Thanks, Val. Lastly, we have Grun. Yeah. So Sky is a huge stablecoin protocol, more than 8 billion stablecoins in circulation, manages massive, diversified, highly transparent portfolio of collateral that's able to actually generate a better risk-adjusted return.
generate a better risk adjuster return.
And then we have super exciting technology
that is all about scaling up the latent potential
of Hyperliquid and all of the crypto communities
by putting powerful tools and the ability to tap
into the synergies and the scale of Sky.
And yeah, I mean, obviously putting all these things together
in usdh will be extremely powerful but even without that it's still going to come to hyperliquid and
i think it's going to result in massive value unlocks and synergies and innovation and more known-answers business models. So the future is bright.
Sounds good.
Yeah, with that, this concludes the end of today's roundtable.
Thank you everyone for joining.
And yeah, to the speakers, thank you for being so involved
for the past two and a half hours.
Yeah, we hope today's discussion has provided some valuable insights
into the current state of the projects
and also strengthen your confidence
in the vision that they have for Hyperliquid.
We believe this is just the beginning
and that the job's not finished.
So thank you guys.
Wish you all the time.
Hyperliquid.
Thanks, everybody.
