Sky joins battle for Hyperliquid's native stablecoin
Sky, formerly known as MakerDAO, has joined the list of teams proposing plans for Hyperliquid’s USDH stablecoin issuance.
In its proposal, Sky outlined how it sees USDH, offering yield, liquidity, regulatory compliance options, and ecosystem investment. According to a post by co-founder Rune Christensen, USDH will be technically identical to DAI and USDS, two major stablecoins issued by the company. It will also leverage Sky’s $8+ billion in collateral, while Hyperliquid will receive a 4.85% return on all USDH.
“By using Sky to power USDH, the Hyperliquid community will gain unbeatable advantages that no other stablecoin project can offer,” Christensen said in the post.
Sky suggests that USDH will use the interoperability protocol LayerZero to operate across multiple blockchains. It also proposes that USDH could be customized for compliance with the GENIUS Act, a 2025 U.S. law regulating stablecoins.
Sky is one of the earliest stablecoin issuers. The company launched in 2014 as MakerDAO and rebranded to Sky in November 2024. Its DAI and MKR tokens remain active and can be optionally upgraded to USDS and SKY. DAI, launched in 2017, is currently the fourth-largest stablecoin with a market cap of over $5 billion, following Tether’s USDT, Circle’s USDC, and Ethena’s USDe. Combined, Sky’s USDS and DAI have a market cap of around $12.5 billion.
Competition for USDH issuance is heating up, with teams able to submit proposals until September 10, 2025. Paxos, Frax Finance, Agora, and Native Markets have already shared their plans.
Hyperliquid, a decentralized exchange with nearly $400 billion in trading volume in August, is collecting proposals through on-chain governance. Validators will vote on September 14 to decide which bidder will define the design and governance of Hyperliquid’s native stablecoin and control key financial incentives for its ecosystem. Currently, the platform relies heavily on external stablecoins, with about 95% of its supply in Circle’s USDC.
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