- Ethena Labs withdraws from the bid to issue USDH.
- Community concerns cited for decision.
- Market dynamics and competitor landscape impacted.
Ethena Labs has officially exited the bid to issue Hyperliquid’s USDH stablecoin, as announced by founder Guy Young on September 11, 2025, following community feedback.
The withdrawal reshapes the competitive landscape, potentially diverting liquidity toward Ethena’s offerings, and elevates Native Market as the frontrunner for the USDH stablecoin project.
Ethena Labs has officially withdrawn from the bid to issue Hyperliquid’s USDH stablecoin after significant community pushback. Guy Young, Ethena’s founder, confirmed the decision on his X (Twitter) account.
The decision influenced market dynamics and impacted the competitive landscape.
Ethena Labs, not a Hyperliquid-native team, faced concerns over its broader ambitions and multiple DeFi products. Guy Young had offered significant incentives, including $75 million, to Hyperliquid. The community raised issues regarding alignment with their community-driven focus.
The withdrawal has significant implications for Ethena and the wider DeFi ecosystem. Market sentiment and funding strategies saw immediate shifts. Native Market emerged as the leading contender for USDH, altering market perceptions and influencing community expectations.
Ethena’s synthetic assets and liquidity initiatives may see redirection towards Hyperliquid-native products, impacting TVL patterns. Prediction markets responded swiftly, with Native Market’s odds for USDH obtaining a notable increase.
The event highlights ongoing challenges of community-driven decisions in the DeFi space. Previous examples include MakerDAO and Curve governance, reiterating the dominance of protocol-native teams. Historical trends show sustained preference for community alignment over external large-scale proposals.
Potential financial outcomes include a pivot of Ethena’s focus to enhance involvement with Hyperliquid-native synthetic dollars and new collateral forms. Guy Young emphasized equitable opportunities in the DeFi space, suggesting no lasting impact on broader Layer 1 markets so far.
