The stablecoin issuer Paxos has updated its proposal for issuing USDH, a stablecoin planned for launch by the decentralized exchange (DEX) Hyperliquid, with new support for PayPal and Venmo.
In a Wednesday announcement, Paxos updated its USDH issuance proposal made on Saturday. The company stated, "PayPal has committed to supporting the Hyperliquid ecosystem," and will list the HYPE token, providing free deposit and withdrawal channel support for the new stablecoin, as well as supporting USDH and Hyperliquid (HYPE) for PayPal checkout.
PayPal will also provide $20 million in incentive funding for the HYPE ecosystem and integrate USDH into its payment app Venmo and remittance service Xoom. Paxos also noted that its regulatory status in the European Union will allow its stablecoin to circulate there, "ensuring USDH can scale globally."
This update also aims to align the interests of the issuer with those of the Hyperliquid ecosystem, promising that "Paxos can only win if Hyperliquid wins." "Paxos will not receive any revenue until the total value locked (TVL) reaches $1 billion, and after the TVL exceeds $5 billion, the revenue cap is 5%," Paxos stated. "Any fees earned by Paxos through this milestone will be held in the form of HYPE tokens," the company added.
After the TVL reaches $1 billion, Paxos will start earning 1% of the fees, which will continue to rise until it reaches 5% when the TVL hits $5 billion or more. In the initial phase, up to 80% of the funds will be used for ecosystem development, but as the TVL increases, this percentage will decrease to 25%, as more funds are allocated to Hyperliquid's aid fund treasury.
The aid fund is a treasury owned by the protocol that receives platform revenue and fees, used for market purchases of HYPE. It operates as a buyback and insurance fund for the ecosystem.
This update comes as multiple companies compete to issue USDH. On Monday, a coalition of cryptocurrency companies, including MoonPay, Agora, and Rain, submitted a joint proposal.
They opposed a proposal put forth by an entity indirectly controlled by financial giant Stripe. Agora CEO Nick Van Eck warned of "obvious conflicts" with Stripe's vertical integration.
On Tuesday, Ethena Labs became the sixth bidder for Hyperliquid's USDH stablecoin. The team behind USDe and USDtb proposed to support USDH with its USDtb stablecoin, which is linked to BlackRock's BUIDL fund.
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Original: “Paxos Updates USDH Stablecoin Bidding Proposal, Plans Integration with PayPal and Venmo”
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