Paxos’ New Proposal for Hyperliquid’s USDH Stablecoin Includes PayPal Integration

Core Insights - Paxos Labs has introduced a revised proposal for the issuance of Hyperliquid's USDH stablecoin, emphasizing a global strategy that includes a significant partnership with PayPal [1][2] Group 1: Partnership and Integration - The strategy centers around integrating USDH into PayPal's checkout and payment systems, which will also support Venmo and list Hyperliquid's HYPE token [2] - PayPal is committing $20 million in incentives to foster the growth of the Hyperliquid ecosystem [2] Group 2: Revenue and Growth Strategy - Paxos proposes that all revenue generated from USDH will be reinvested into Hyperliquid's growth and its Assistance Fund until USDH achieves a total value locked (TVL) of $1 billion, with a revenue share cap of 5% even if TVL exceeds $5 billion [3][7] - This framework is designed to ensure that Paxos' success is tied to Hyperliquid's success, positioning USDH as the default stablecoin for decentralized finance (DeFi) [3] Group 3: Regulatory Compliance - Paxos highlights its regulatory credentials, noting compliance with the GENIUS Act and its unique legal status as the only firm authorized to issue tokens in Europe [4] - The proposal includes plans to use PayPal's PYUSD as a reserve asset to strengthen USDH's legal and financial foundation [4] Group 4: Market Positioning and Competition - Beyond retail users, Paxos aims to position Hyperliquid as a liquidity layer for enterprise-grade finance, planning to integrate builder codes through partnerships with brokerages and fintech firms [5] - The proposal also seeks to attract asset issuers into Hyperliquid's HIP-3 open market and develop an "Earn" product utilizing USDH for consumer applications [5] - Paxos faces competition from other proposals, including those from Frax Finance, Agora, and LayerZero, as Hyperliquid validators prepare for a vote on September 14 [6][7]