Ethena Joins the Battle to Issue Hyperliquid’s USDH

Hi! In today’s edition:

• 🔥 Ethena makes aggressive play in USDH race, but is it all a theater?

• 🕵️ MYX airdrop scandal: biggest sybil ever?

• 📊 Cboe brings perpetual-style BTC/ETH futures to U.S. markets

• 🚀 IP token surges after Heritage Distilling stockpile move

• 🎙️ Bits + Bips: USDH bidding war, DAT model critique, tokenized stocks

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Ethena Joins Race to Issue Hyperliquid’s USDH

Another decentralized stablecoin giant has joined the growing list of contenders to issue Hyperliquid’s stablecoin USDH.

Ethena Labs pitched itself as the “ideal partner for USDH” in a Tuesday proposal, outlining plans to back USDH entirely with USDtb, a stablecoin backed by BlackRock’s BUIDL fund and issued through the Anchorage Digital bank.

Ethena pledged to return 95% of reserve revenue to the Hyperliquid community, cover migration costs from USDC to USDH, and commit at least $75 million in ecosystem incentives.

The USDe issuer also proposed launching a Hyperliquid-native synthetic dollar called hUSDe, having already purchased the ticker weeks ago, intended to “drive significant spot and hedging flow activity” through Hyperliquid.

Ethena said its commitments to the Hyperliquid ecosystem are not conditional on winning the USDH bid.

“We believe Hyperliquid is one of the most impressive and important stories to emerge in the last 20 years not only within crypto, but all of tech and finance,” said the Ethena team.

On Sept. 14, Hyperliquid validators will decide between Ethena, Sky, Paxos, Frax, Agora and Native Markets’ proposals. 

But according to Dragonfly Managing Partner Haseeb Qureshi, the outcome of the validator vote might have been decided long before it started.

“Native Markets' proposal came out almost immediately after the USDH RFP was announced, implying they had advanced notice. Everyone else scrambled over the weekend to put something together. So this whole USDH RFP was basically custom made for Native Markets,” wrote Qureshi on X, citing USDH bidders who spoke off the record.

Qureshi’s view was contested by Nansen CEO Alex Svanevik. Nansen runs the largest Hyperliquid validator through a partnership with HypurrCollective.

“Our teams have put a ton of effort into reviewing proposals and speaking with bidders to find the best alternative for HL [Hyperliquid],” said Svanevik.

“We’ve even encouraged players on the fence to push forward with their proposal to make the process even more competitive.”

Sybil Attack Allegations Hit MYX as Single Entity Claims $170 Million From Airdrop

Decentralized perpetual exchange MYX Finance is the latest project at the center of airdrop controversy, after its token surged 1,000% in 48 hours and triggered a massive short squeeze that liquidated $40 million on Tuesday.

Blockchain analytics firm Bubblemaps shared evidence that roughly 100 sybil-linked addresses received 1% of the MYX total token supply, worth about $200 million at its fully diluted valuation of $17 billion. 

All those addresses claimed their MYX tokens at around the same time, with no prior activity to the airdrop. They tied back to a single entity that would have claimed $170 million from the airdrop.

Bubblemaps suggested the event might have been the “biggest airdrop sybil of all time.” 

A Sybil attack occurs when a single entity creates and controls multiple fake identities within a decentralized network to gain disproportionate influence or manipulate the system for malicious purposes.

The MYX team responded to Bubblemaps’ post, saying it had implemented anti-sybil measures towards bots that wash traded extensively, but other campaign rewards were based on genuine trading volume.

“Prior to launch, some users requested to change their addresses, including a number of high-volume participants,” said MYX.

“From the perspective of focusing on trading itself, we did not impose specific prohibitions on such requests.”

Cboe Plans to Launch Continuous BTC and ETH Futures Trading

Cboe Global Markets plans to launch continuous bitcoin and ether futures trading starting Nov. 10, pending regulatory approval, according to a release from the exchange on Tuesday.

The new futures contracts will be structured as single, long-dated contracts with a 10-year expiration, designed to provide continuous long-term market exposure without the need to roll over contracts periodically.

They will also be cash-settled and adjusted daily against real-time spot prices through a transparent funding rate mechanism, which mimics the price alignment feature of perpetuals.

“Perpetual-style futures have gained strong adoption in offshore markets,” said Cboe’s Global Head of Derivatives Catherine Clay.

“Now, Cboe is bringing that same utility to our U.S.-regulated futures exchange and enabling U.S. traders to access these products with confidence in a trusted, transparent and intermediated environment.”

Story Protocol’s IP Surges 30% After Treasury Firm Embraces Token

Story Protocol’s native token IP hit an all-time high price of around $11.75, surging 30% after Nasdaq-listed Heritage Distilling announced plans to build significant IP token reserves.

Heritage’s strategy is backed by $220 million in private investment in public equity (PIPE) financing, which included participation from high-profile investors like a16z crypto, Amber Group, Polychain Capital and Cantor Fitzgerald.

It comes shortly after the controversial exit of Story’s co-founder Jason Zhao, who stepped down from his full-time role last month to focus on a new AI project called Poseidon.

Some members of the crypto community labeled Zhao's exit as a "soft rug pull" because the project had not delivered on its promises while insiders still held significant token stakes.

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Bits + Bips: Hyperliquid’s USDH Bidding War & Why the DAT Model Is Broken

We debate Hyperliquid’s USDH bidding war, DATs drifting off course, and why Galaxy skipped L2s for its tokenized stock.

The fight for Hyperliquid’s USDH stablecoin is more than a ticker battle—it’s a referendum on how crypto distribution, governance, and incentives will shape the next trillion-dollar market. 

In this episode of Bits + Bips, Steve Ehrlich sits down with Delta Blockchain Fund’s Kavita Gupta, Galaxy Digital’s Alex Thorn, and Frax founder Sam Kazemian to dig into the big questions: Who will win the USDH war, and why does distribution matter more than design? Are DATs fulfilling their promises—or raising money without accountability? Why are L2s the wrong place for tokenized stocks? And where exactly is the trillion-dollar opportunity in stablecoins?

Listen to the episode on Apple Podcasts, Spotify,Pods, Fountain, Podcast Addict, Pocket Casts, Amazon Music, or on your favorite podcast platform.

• 🧩 Binance integrated USDe, the synthetic dollar from Ethena Labs, across its platform as collateral and a yield-bearing asset, with the move potentially reshaping how margin and rewards work on the exchange.

• 🛠️ Ethereum layer 2 network Linea quickly resolved a disruption in its transaction ordering system on Wednesday by identifying the issue and deploying a fix within an hour, then moving to active monitoring.

• 🐞 Polygon experienced a temporary bug affecting transaction finality and access to some services, forcing validators and apps to resync until node restarts partially resolved the issue.

• 📊 Kraken rolled out tokenized U.S. stock trading across the EU, offering over 60 stocks and ETFs to millions of users in a direct challenge to Robinhood’s expanding footprint.

• 📉 Eric Trump’s board role at crypto treasury firm Alt5 Sigma was quietly downgraded to observer after talks with Nasdaq, despite earlier announcements tying him and his family closely to the firm’s $1.5 billion token strategy.

• 💬 Patrick Witt, Trump’s newly appointed crypto adviser, said his top priorities include speeding up Senate action on crypto market rules, enforcing the stablecoin law, and managing the U.S. bitcoin holdings.

• 👥 Coinbase hired the founders of Sensible, a DeFi yield startup it previously backed, as part of its seventh acquisition move this year to accelerate plans for an “everything exchange” covering all types of digital and tokenized assets.

• 📈 Fidelity launched a $202 million Ethereum-based money market token as part of a broader $7.5 billion boom in tokenized Treasuries, with Ondo Finance using it to back its crypto yield product.

• 🧱 HSBC and BNP Paribas joined the Canton Foundation, backing a blockchain network focused on real-world asset tokenization, as major banks increasingly embrace digital assets for regulated finance and global liquidity.

• 💰 Japanese bitcoin investment firm Metaplanet raised $1.4 billion by issuing 385 million new shares to ramp up its BTC holdings, pushing its treasury to over 20,000 bitcoins amid Japan’s weak yen and mounting debt concerns.

• 📈 Gemini increased its IPO target to $433 million and raised its share price range ahead of its Friday debut, seeking a $3 billion valuation amid rising investor interest in crypto stocks.

• 🔄 Sharplink launched a $1.5 billion share buyback plan after its stock fell below the value of its ETH holdings, aiming to boost its price and demonstrate confidence in its long-term strategy.

• ⚔️ Ethereum trade router Barter acquired Copium’s codebase to boost its ability to deliver better pricing and reduce slippage in decentralized trading, while Copium’s team moved on to other ventures.

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