What to know:

• Ethena is aiming to issue Hyperliquid’s future stablecoin, competing with companies like Paxos, Agora, and Sky.
• The stablecoin is expected to be supported by Ethena’s USDtb, created with the federally chartered bank Anchorage Digital and backed by BlackRock’s tokenized money market fund.
• Ethena asserts that if its proposal is chosen, it would return 95% of the net revenue generated from USDH reserves back to the Hyperliquid ecosystem and assume expenses for transitioning existing USDC trading pairs.

Ethena, a decentralized finance protocol, has revealed plans to propose the issuance of Hyperliquid’s upcoming stablecoin, participating in a competitive bidding landscape that is already seeing interest from various firms like Paxos and Agora. The new token would be entirely underpinned by Ethena’s USDtb, a stablecoin collaborated with Anchorage Digital, complemented by the backing of BlackRock’s tokenized money market fund.

“We are excited to enable Ethena’s USDtb, which is 100% backed by BUIDL and uniquely positioned to offer institutional grade cash management as well as on-chain liquidity to Hyperliquid users,” said Robert Mitchnick, Blackrock’s head of digital assets, in the proposal.

If Ethena’s proposal is accepted, the organization has committed that 95% of net proceeds from USDH reserves will be reinvested into the Hyperliquid ecosystem, while also covering the costs entailed in transitioning existing trading pairs from USDC to USDH.

This proposal emerges amid intensified competition to secure the issuance of Hyperliquid’s USDH stablecoin. The decentralized exchange engaged in nearly $400 billion in trading volume last month, presenting an appealing opportunity for stablecoin issuers. The decision on proposals is set to be made by validators on September 14.