Stablecoin Giants Battle to Launch Hyperliquid’s USDH

Hi! In today’s edition:

• 💰 Who gets to launch Hyperliquid’s USDH? Paxos, Agora & more line up

• 🧢 Ardoino: Tether’s BTC stash is only growing

• 🪦 Kinto can’t recover from exploit — shutting down for good

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Stablecoin Issuers Enter Bidding War to Launch Hyperliquid’s USDH

The Hyperliquid community is weighing proposals from a number of stablecoin issuers proposing to build a U.S.dollar-pegged stablecoin native to Hyperliquid called USDH.

Among the contenders are Frax Finance, Agora, Native Markets and even Paxos, which proposed spending 95% of interest earned to buy back Hyperliquid’s native token HYPE.

Paxos offered MiCA and GENIUS compliance, with cofounder Bhau Kotecha saying the firm also plans to “obtain HYPE holdings to ensure community alignment.”

But the regulated trust company didn’t necessarily edge out the competition.

A proposal from Agora founder Nick van Eck suggested a coalition-based infrastructure behind USDH was the “obvious choice,” and committed to sharing 100% of revenue earned from USDH to fund HYPE buybacks.

Agora’s coalition partners include Rain, LayerZero, EtherFi, MoonPay and Centrifuge. 

Van Eck urged particular caution against Native Markets’ proposal to utilize Stripe’s Bridge as USDH’s issuer, citing a conflict of interest from Stripe’s newly announced plans for a layer 1 blockchain Tempo.

“After thinking about USDH more, I realize the most important question for the Hyperliquid community isn’t about institutions vs natives. It’s about alignment. Who will best steward USDH?” commented Syncracy Capital founder Ryan Watkins. 

“Expecting a lot more details and new players to enter the picture in the coming days. Exciting times for Hyperliquid.”

Hyperliquid said on its official Discord channel that the USDH ticker will be assigned via an onchain validator vote that will take place between 10:00 and 11:00 UTC on Sept. 14.

You know what Monday means: Bits + Bips! 

Tune in live and watch on X or YouTube at 4:30pm ET / 1:30pm PT.

Delta Blockchain Fund’s Kavita Gupta, Frax’s Sam Kazemian, and Galaxy’s Alex Thorn join Unchained's Steve Ehrlich to discuss the hottest topics in the macro x crypto universe: USDH, Tempo/Ethereum L2 vs L1, Nasdaq’s eyes on DATs, and more.

Tether Didn’t Sell Any Bitcoin, Says CEO Paolo Ardoino

Tether CEO Paolo Ardoino dispelled rumors that the company had been selling its bitcoin holdings.

“Tether didn't sell any Bitcoin. As Samson says below, it contributed part of its stash into XXI,” said Ardoino, referring to Bitcoin advocate Samson Mow’s comments explaining Tether’s BTC transfers to XXI.

XXI, otherwise known as Twenty One Capital, is a bitcoin-focused investment vehicle, backed by Tether, Cantor Fitzgerald and SoftBank. In June, Tether transferred 14,000 BTC to XX1, followed by another 5,800 BTC in July.

“So that means at the end of Q2 2025, Tether would have had 4,624 BTC more than at the end of Q1 2025,” said Mow on X.

“If you combined it with the July transfer then Tether has (at least) a net increase in Bitcoin holdings of 10,424 BTC.”

Kinto to Shut Down After $1.6 Million July Exploit

Ethereum layer 2 project Kinto will shut down at the end of the month, following a $1.6 million exploit in July that critically weakened its financial stability.

The exploit involved a smart contract loophole on Kinto's Arbitrum-based chain, allowing an attacker to mint 110,000 counterfeit tokens and siphon around $1.55 million from lending pools. Kinto’s native token lost 95% of its value after the attack.

Despite efforts to recover through a "Phoenix” program that raised $1 million to reboot trading and partially reimburse users, the Kinto team said it was “time to face reality and shut down responsibly.”

The remaining funds will go towards repaying Phoenix lenders, with recovery efforts still underway to trace the funds stolen in the attack. 

Kinto founder Ramón Recuero has pledged to compensate hack victims with $55,000 using personal funds, with each eligible address receiving up to $1,000. 

“This will ensure that 80% of all depositors receive their full amount back,” said the Kinto team.

• 📜 A new Senate Banking draft crypto bill circulated Friday with stronger protections for developers, new bankruptcy rules treating certain digital assets as customer property, and a mandate for the SEC and CFTC to study tokenization.

• 🤝 The SEC and CFTC set a Sept. 29 roundtable to coordinate on DeFi, perpetual contracts, and 24/7 markets, pledging unified rules after clarifying spot crypto can already trade on U.S. venues.

• 💸 Nemo Protocol, a Sui-based yield-trading platform, was hacked for $2.4 million in USDC that was bridged to Ethereum, prompting an immediate shutdown of its smart contracts while an investigation is underway.

• 🔗 SharpLink Gaming has plans to stake part of its $3.6 billion ETH treasury on Linea after Sept. 10, diversifying beyond custodial staking to chase higher yields as a Linea Consortium member.

• 📈 Robinhood shares jumped 7% after hours as S&P Dow Jones Indices announced the firm will join the S&P 500 on Sept. 22, while Bitcoin-treasury company Strategy was passed over despite its $95 billion market cap.

• 🌐 Forward Industries secured $1.65 billion in cash and stablecoin commitments led by Galaxy Digital, Jump Crypto, and Multicoin Capital to launch a Solana treasury strategy, with Multicoin’s Kyle Samani set to become board chairman once the deal closes.

• 🏦 Hong Kong’s HashKey announced plans for a $500 million digital asset treasury fund, initially targeting bitcoin and ether, to bridge institutional capital with on-chain assets and mirror treasury strategies of firms like Strategy and SharpLink.

• 🏦 StablecoinX secured $530 million in fresh PIPE financing, bringing its total to $895 million ahead of a planned Q4 Nasdaq listing as “USDE,” funding a multi-year ENA token accumulation strategy that helped lift ENA nearly 12%.

• 🧱 Wildcat Labs raised $3.5 million at a $35 million valuation to expand its undercollateralized lending protocol, grow its 7-person team, and deepen Ethereum DeFi integrations, bringing total funding to $5.3 million.

1. Digital Cash: Making Stablecoins Private & Usable by Jon Charbonneau, Co-founder of DBA

2. Ethereum Might Succeed, But Not for the Reasons You Think by Jeff Park, CIO of ProCap

3. Liminal Collective: HYPERSPECUL(A)T(I)ON