BlackRock Backs Ethena's Bid for Hyperliquid Stablecoin

Ethena Eyes Hyperliquid's Stablecoin Market with BlackRock's Backing

Ethena Labs, known for its synthetic-dollar protocol, is vying to become the stablecoin provider for the decentralized exchange (DEX) and layer-1 network, Hyperliquid. Hyperliquid, currently relying on USDC and USDT, is seeking a “Hyperliquid-aligned” stablecoin alternative.

While Paxos and World Liberty Financial (backed by Donald Trump) have also submitted proposals, Ethena’s stands out due to its partnerships with Anchorage Digital and Securitize, a real-world asset (RWA) tokenization firm backed by BlackRock.

Robert Mitchnick, BlackRock's Head of Digital Assets, voiced support for Ethena's USDtb, stating it's “100% backed by BUIDL and uniquely positioned to offer institutional grade cash management as well as on-chain liquidity to Hyperliquid users.” USDtb is issued by Anchorage and backed by BlackRock’s tokenized BUIDL fund.

Hyperliquid, once considered a DeFi startup, now commands significant attention. With $5.7 billion in stablecoins on its network, it's a valuable target for stablecoin providers.

Ethena proposes that its USDH stablecoin would initially be backed by USDtb, indirectly benefiting from BlackRock's BUIDL fund. A minimum of 95% of the revenue generated by USDH reserves would be allocated to Hyperliquid's Assistance Fund, HYPE purchases, and validator distributions. The HYPE token, used for governance, saw a 20% increase, trading around $53.

If approved, Ethena will cover transaction costs for USDH adoption within Hyperliquid. Anchorage would issue USDtb natively on Hyperliquid's network. Securitize will also deploy its platform, bringing tokenized funds, stocks, and other financial products to Hyperliquid's ecosystem without deployment costs.

Key Takeaways

• Ethena Labs proposes USDH as Hyperliquid's stablecoin, backed by USDtb and indirectly by BlackRock's BUIDL fund.
• BlackRock's executive supports Ethena's proposal, highlighting institutional-grade cash management and on-chain liquidity benefits.
• Hyperliquid's growing significance attracts major players like Ethena, Paxos, and projects linked to Donald Trump.
• The proposal includes benefits such as native USDtb issuance on Hyperliquid and Securitize's RWA platform deployment.