Hyperliquid USDH Bidding War Heats Up, Upbit Unveils Ethereum L2, and Dogecoin ETF Set for Launch
Major stablecoin issuers compete for Hyperliquid's USDH, Upbit launches an Ethereum Layer-2 network, and the first US Dogecoin ETF prepares for trading, highlighting significant Web3 market evolution.
Executive Summary
The cryptocurrency market experienced a week of significant developments, marked by an intense competition among major stablecoin issuers for Hyperliquid's native stablecoin, the launch of an Ethereum Layer-2 solution by South Korea's largest exchange, Upbit, and the impending debut of the first US Dogecoin exchange-traded fund. These events underscore the continuous evolution of DeFi infrastructure, the expansion strategies of centralized exchanges, and the increasing integration of digital assets into traditional financial markets, set against a backdrop of anticipated shifts in US regulatory oversight.
The Event in Detail
Hyperliquid's USDH Stablecoin Competition Intensifies
Hyperliquid is moving to replace its reliance on bridged assets like USDC with its own native stablecoin, USDH, a strategic pivot designed to internalize the value generated by its ecosystem. A high-stakes "bidding war" is underway, with at least six major stablecoin issuers—Paxos, Ethena, Frax Finance, Sky (formerly MakerDAO), Agora, and Native Markets—competing for the right to issue USDH. The winning proposal will be determined by a stake-weighted validator vote.
Each contender presents distinct financial mechanics and operational models:
Ethena Labs proposes USDH backed by USDtb, a stablecoin linked to BlackRock's BUIDL tokenized fund. Ethena pledges to return 95% of net reserve revenue to the Hyperliquid community through HYPE token buybacks and ecosystem funding. Their proposal also includes a $75 million ecosystem incentive fund, potentially scaling to $150 million, and the launch of a Hyperliquid-native synthetic dollar, hUSDe.
Frax Finance offers a decentralized finance approach, backing USDH 1:1 with its frxUSD stablecoin, collateralized by US Treasuries. Frax commits to passing 100% of the underlying Treasury yield programmatically to Hyperliquid users, retaining zero fees.
Paxos, known for regulatory rigor, submitted a proposal for a USDH compliant with both the US Stablecoins Act (GENIUS Act) and the EU's Markets in Crypto-Assets (MiCA) framework. Paxos initially proposed allocating 95% of reserve yield to HYPE buybacks.
Sky (formerly MakerDAO) offers a direct yield of 4.85% to all USDH holders on the Hyperliquid platform. Its proposal involves USDH functioning similarly to DAI and USDS, backed by a diversified, overcollateralized pool of crypto and real-world assets (RWAs), including $2.2 billion in USDC within its Peg Stability Module (PSM) for instant redemptions.
Native Markets pledged to mint USDH directly on HyperEVM and evenly split reserve yield between HYPE buybacks and ecosystem growth, utilizing Stripe's tokenization platform, Bridge.
Agora, backed by VanEck and MoonPay, proposed returning 100% of USDH reserve revenue to the Hyperliquid community.
The potential for USDH to disrupt the stablecoin market has prompted Circle to announce plans for deploying native USDC and its Cross-Chain Transfer Protocol (CCTP) on Hyperliquid, signaling its intent to retain market share.
Upbit Launches Ethereum Layer-2 GIWA Chain
Dunamu, the parent company of South Korea's largest cryptocurrency exchange Upbit, has launched the testnet for Giwa, an Ethereum Layer-2 solution. Built on Optimism's OP Stack, Giwa aims to achieve one-second block times and full Ethereum Virtual Machine compatibility, enabling faster transactions and lower fees for decentralized applications. This initiative positions Upbit as an infrastructure provider, akin to Coinbase's Base network and Binance's BNB Chain, as it seeks to expand beyond its core exchange operations and foster a broader Web3 ecosystem. The network plans to support a Korean won stablecoin project, aligning with national currency sovereignty initiatives.
MYX Token Experiences Meteoric Rise Amid Manipulation Concerns
The MYX token saw an extraordinary 27,000% price increase over three months, reaching an all-time high of $18.93 and a market capitalization of $3.53 billion. However, analysts have raised concerns, characterizing the surge as a potential "orchestrated exit-liquidity game." Research suggests that MYX whales allegedly manipulated spot prices to trigger perpetual futures' mark prices, leading to significant short squeezes, including $11 million in liquidations on September 8. A 39 million MYX token unlock was reportedly timed with peak market hype, facilitating insider exits. The token has since experienced a pullback, falling 10.34% in 24 hours due to profit-taking, extreme overbought signals (RSI above 98), and worries about insider selling.
Story Protocol's IP Token Surges with Significant Funding
Story Protocol's IP token has surged 8x since its listing. This performance is bolstered by an ecosystem fund in collaboration with OKX Ventures and a substantial $2.2 billion PIPE funding round for an IP token reserve, which includes participation from a16z crypto. The protocol is designed to revolutionize intellectual property management by making IP programmable and tradeable on the blockchain, focusing on attribution, licensing, and royalty mechanisms for digital assets.
CoinShares to List on Nasdaq
CoinShares, a leading European digital asset manager with approximately US$10 billion in Assets under Management (AuM), announced its intention to go public in the United States through a merger with Vine Hill Capital Investment Corp. The transaction, valued at US$1.2 billion on a pre-money equity basis, includes a $50 million institutional investment. This listing on Nasdaq will make CoinShares the first European Web3 company on a major US stock exchange, facilitating its international expansion and providing US investors direct access. CoinShares currently holds the number one market position in EMEA with a 34% market share and is among the top four managers globally by crypto ETP AuM, alongside BlackRock, Fidelity, and Grayscale.
Anticipated Shift in US Crypto Regulatory Landscape
The US crypto regulatory landscape is poised for a systematic shift in 2025, moving away from "regulation by enforcement" towards more structured oversight. SEC Chair Paul Atkins has signaled a focus on promoting innovation while ensuring investor protection. Key legislative efforts include the Digital Asset Market Clarity Act (CLARITY Act), which seeks to classify digital assets as securities or commodities, and the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, signed into law in July 2025, providing a clear legal framework for fiat-backed digital assets. The Anti-Central Bank Digital Currency Surveillance State Act also passed the House, prohibiting the Federal Reserve from issuing a retail CBDC.
First US Dogecoin ETF Nears Launch
The Rex-Osprey Dogecoin ETF (DOJE) is scheduled to begin trading around September 18, 2025, marking the first US exchange-traded fund dedicated to a memecoin. Approved under the Investment Company Act of 1940, this ETF provides investors with regulated exposure to Dogecoin. The anticipation surrounding the launch has fueled a 20% price surge in Dogecoin over the past week, with institutional interest, exemplified by CleanCore Solutions acquiring over 500 million DOGE, suggesting a potential shift in the memecoin's status towards a more legitimate financial instrument.
Market Implications
These developments carry significant implications for the broader Web3 ecosystem and traditional financial markets. The intense competition for Hyperliquid's USDH highlights the evolving landscape of stablecoin design, with issuers actively competing on yield generation, collateralization mechanisms, and regulatory compliance. This competitive dynamic could lead to a decentralization of stablecoin issuance control and a shift in revenue capture from traditional centralized entities to community-aligned protocols.
Upbit's launch of the Giwa chain signifies a growing trend among major centralized exchanges to expand their influence into decentralized infrastructure. By developing proprietary Layer-2 solutions, exchanges like Upbit, Coinbase, and Binance aim to create integrated ecosystems, fostering developer activity and user adoption while potentially fragmenting liquidity across different chains. This strategy reflects a broader move to capture more of the Web3 value chain.
The MYX token's volatile price trajectory, coupled with allegations of market manipulation, underscores the persistent risks within the highly speculative segments of the crypto market. It serves as a reminder of the potential for "exit-liquidity games" and the importance of robust on-chain analysis for investors. Conversely, the substantial funding and surging performance of Story Protocol's IP token indicate continued venture capital confidence in innovative Web3 applications, particularly those addressing fundamental issues like intellectual property rights in the digital age.
The CoinShares Nasdaq listing and the Rex-Osprey Dogecoin ETF represent pivotal milestones for the integration of digital assets into mainstream finance. CoinShares' entry into a major US stock exchange provides traditional investors with regulated exposure to the burgeoning digital asset management sector. Similarly, the DOJE ETF legitimizes memecoins within regulated product offerings, potentially broadening their investor base and altering their investment profile from speculative novelty to accessible financial instrument. These developments signal a maturing market where traditional financial structures increasingly accommodate and validate crypto assets.
Broader Context
Collectively, this week's events illustrate a multi-faceted and dynamic progression within the Web3 space. The convergence of DeFi innovation, centralized exchange expansion into infrastructure, and the growing embrace of crypto assets by traditional finance indicates a maturing industry seeking both efficiency and legitimacy. The anticipated shift in US regulatory strategy, moving towards systematic oversight through legislation like the CLARITY Act and GENIUS Act, is critical for long-term stability and fostering institutional confidence. This regulatory clarity, alongside continued institutional investment and product innovation, is essential for mainstream adoption and the sustained growth of the digital asset economy. The diverse nature of these events—from core stablecoin infrastructure to meme coin ETFs—highlights the expansive and varied frontiers of the Web3 landscape.
Edgen Crypto·Sep 13 2025, 03:31
