DeFi
Ethena Labs Withdraws from Hyperliquid's USDH Stablecoin Bid Amid Community Concerns
The move reflects the growing influence of community governance in DeFi, as other contenders now vie for the right to issue the stablecoin on the derivatives-focused L1.
September 11, 2025
Companies mentioned:
• Ethena Labs has pulled its proposal to issue the USDH stablecoin on the Hyperliquid platform.
• The decision came after community and validator concerns were raised about the proposed structure.
• The withdrawal reshapes the race, with a final vote on the remaining contenders expected soon.
Ethena Labs has withdrawn its bid to issue Hyperliquid’s native stablecoin, USDH, following pushback from the Hyperliquid community and validators. The derivatives-focused Layer 1 is seeking a partner to launch its own stablecoin.
Ethena's proposal involved backing USDH with its own USDtb stablecoin, which is collateralized by the BlackRock BUIDL fund. Concerns from the community appeared to center on the structure of this backing and potential risks.
The withdrawal leaves other major players like Paxos, Frax Finance, and Native Markets in the running. The decision is now slated for a vote on September 14th.
This event highlights the increasing power of decentralized governance in shaping the direction of DeFi protocols. It signals that even established players like Ethena must align with community sentiment to succeed.
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