Frax Finance has formally proposed the native issuance of its stablecoin, USDH, on the Hyperliquid derivatives exchange. The proposal directs 100% of the yield generated from the underlying assets to the Hyperliquid community. This development aims to pair a high-performance stablecoin with a hyper-performant blockchain.

The announcement signals a strategic push by Frax to expand its stablecoin's reach within the DeFi ecosystem. For Hyperliquid, a native, yield-bearing stablecoin could enhance liquidity and user engagement on the platform. The move has already been met with a positive market reaction, with Hyperliquid's native token, HYPE, seeing a price increase following the news.

The proposal is subject to a vote by on-chain validators. This collaboration between a stablecoin issuer and a decentralized exchange highlights a growing trend of protocols seeking deeper integrations to create more compelling products and value propositions for users.