Ethena Labs has withdrawn its bid to issue Hyperliquid’s USDH stablecoin after validators and community members raised concerns.
In a Sept. 11 post on X, Ethena founder Guy Young confirmed the withdrawal, citing feedback questioning Ethena’s positioning within the ecosystem.
Young noted that conversations with validators raised three main points: Ethena is not a native Hyperliquid team, it operates several products outside USDH, and its broader ambitions go beyond one exchange partnership.
He said Ethena has chosen to step aside rather than contest the arguments presented by the community.
Earlier in the week, Ethena joined the Hyperliquid stablecoin contest, which has attracted several teams, including Paxos, vying to manage USDH.
Its pitch involved backing the stablecoin entirely with USDtb, a token connected to BlackRock’s BUIDL. The team also pledged to return nearly all reserve revenue to the Hyperliquid community, cover migration costs from USDC, and inject at least $75 million in incentives.
Native Market gains momentum
Ethena’s withdrawal clears the field for Native Markets, which Young publicly congratulated. Notably, CryptoSlate previously reported that the Native Market team was a clear favorite among the competing teams.
Young addressed critics who had questioned Native’s credibility, arguing that their success reflected Hyperliquid’s community-driven ethos.
According to him:
“No one gives a f#ck how big you are, your background, pedigree or financial resources. It is a level playing field where emergent players can win the hearts of the community and are given a fair shot at succeeding.”
Broader plans
Although Ethena’s USDH bid is off the table, Young stressed that the project’s broader plans on Hyperliquid remain unchanged.
He outlined plans to prioritize products such as synthetic dollars (hUSDe), USDe-powered savings and card products, and hedging flows designed for Hyperliquid markets.
Ethena also intends to explore HIP-3 markets, including reward-bearing collateral, modular prime broking, and perpetual equity swaps.
According to Young, these initiatives represent Ethena’s long-term strategy of doubling down on innovation.
He wrote:
“We will do what we have always done since day one: outcompete everyone else on product regardless.”
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