Unchained - Why the War Over the USDH Ticker on Hyperliquid Is Bullish for Crypto - Ep. 902

Episode Date: September 12, 2025

Stablecoins are supposed to be boring, but the fight for the USDH ticker on Hyperliquid has turned into one of the most dramatic battles in crypto.  From Ethena suddenly pulling out, to Paxos revamping its bid, to whispers of favoritism, the contest has put protocol-native stablecoins in the spotlight.  In this episode, MegaETH co-founder Shuyao Kong, who just announced their own stablecoin USDm, speaks about why they chose Ethena as a partner, and why alignment with Hyperliquid matters more than short-term incentives.  She also explains why ecosystems need both yield-chasing and yield-agnostic stablecoins — and whether Circle and Tether could be pushed aside in the next wave of competition. Thank you to our sponsor, ⁠Token2049⁠! Get 15% off your tickets with the code UNCHAINED! Guest: Shuyao Kong, Co-founder of MegaETH Links:  Unchained:  The Competition Is On. Who’ll Win the USDH Ticker on Hyperliquid? Bits + Bips: Hyperliquid’s USDH Bidding War & Why the DAT Model Is Broken Ethena Joins Race to Issue Hyperliquid’s USDH Paxos Unveils USDH Proposal V2 With PayPal, Venmo Integrations  Sky Joins Bidding War to Launch Hyperliquid’s USDH Stablecoin Issuers Enter Bidding War to Launch Hyperliquid’s USDH Ethena withdraws its proposal  The Block: MegaETH launches native USDm stablecoin with Ethena to subsidize sequencer fees Polymarket bet: Who will win the USDH ticker? Timestamps: 🎬 0:00 Intro 🔥 3:02 Why Shuyao is so energized by the USDH ticker war 🔄 4:52 How the USDH drama reshaped MegaETH’s USDm launch 🤝 5:27 What convinced MegaETH to choose Ethena as its partner 🌐 11:20 What it really means to be aligned with an ecosystem 🚪 15:36 How Shuyao views Ethena’s sudden withdrawal from the contest 📣 18:22 Whether public governance decisions will keep gaining influence 🏗️ 20:16 Will protocol-native stablecoins be the winners of the next wave? 💵 21:22 Could Circle and Tether actually get pushed aside on Hyperliquid? Learn more about your ad choices. Visit megaphone.fm/adchoices

It is such a bullish news for the ecosystem because what is happening is competition is driving more economic back to the user and developers. So I think that's also why this news is so controversial. It's so significant and it's such a demonstration of, I think, just next step, what the protocol is really about. It's about bringing economic value back to their users. this. Hey everyone, welcome to Unchained. You're a no hype resource for all things crypto. I'm your host, Laura Shin. This is the September 12th, 2025 episode of Unchained. The crypto world is buzzing. On October 1st and 2nd, 25,000 people will be at token 2049 Singapore, the largest crypto event in the world, featuring headline speakers like Eric Trump, Vlad Tenive, Tom Lee, Bollagosin, and Arthur Hayes. Visit asia.tokin249.com now to get 15% off tickets with the code unchained.

Today's guest is Shuiang, co-founder of Mega Eve. Welcome, Shuiya. Thank you, Laura. I have been a long-term fan of your podcast and book. It's such a pleasure to be here. Thank you. That's so sweet. Well, I'm excited to have you.

Listeners might actually already know you because you appeared on the chopping block, but they called you Brother Bing throughout and went into a whole thing about how you even got that nickname. So for those of you who know Brother Bing, this is Brother Bing. But yes, we have used her real name here. Okay, so we are in the midst of what has so far been a very intense competition

for the USDA-StH stable coin ticker on Hyperliquid. We actually already did an episode on this. We listened to two of the teams, kind of talking about what they were pitching. But there was many other teams that have made proposals and a bunch of them have also offered to give all the revenue back to Hyperliquid. You know, the race has had an element of drama.

There's been accusations that this was in the bag for native markets all along. There were, you know, Paxos and other teams that like revamped their proposals based on feedback. And then on Thursday, Athena, which they had actually already bought other stable coin tickers on Hyperliquid, they withdrew from contention for the USDA ticker that happened on Thursday morning. So, you know, throughout Shuiyau, your protocol has actually been kind of in a bit of an interesting position because you actually also announced your protocol native stable coin USDM on Monday. And you mentioned to me earlier that the hyper liquid drama actually caused you to shift that announcement. So why don't you, you know, because you've been through what the community is going through a public, but you went through it in private. I was just curious, like, why do you think we're seeing this kind of like, you know,

spelling up a competition and deliberation over these different protocol native stable coins? Yeah, I think first of all, I am super bullish that Hyperliquid is actually doing such a public auction. I think it's a fantastic opportunity not only to bring attention, but bring the best deals out to the Hyperliquid community. It is also a fantastic way to educate the community on what is the role of a stable coin in an ecosystem. I think fundamentally I am super bullish because I think crypto in our industry is all about this intermediary. And stable coin issuer used to be serving as an intermediary in an ecosystem. But now we're seeing that protocol are owning the stable core narrative again, and revenue or yield are being redistribute back.

to the community. From our end, I think we saw this trend very much earlier on. Our goal is to build an ecosystem center around economic model that brings a very sustainable protocol. And obviously, another goal in the beginning was, you know, I was at consensus for a long time. I've seen many different protocols launching from zero to one. And every time I go to a new ecosystem, I'm trying

to like bridge asset or trade and I would see like 10 different representation of stable coin. I just don't know which one to use. And obviously you go with the big ones, right? But the big ones, the yield doesn't go to the ecosystem. So I think partly it was because I was trying to solve the user pain point. When you go to an ecosystem, there is one stable coin that is aligned with the community interest, it's backed by the community. So that was the original purpose of us issuing our own stable coin. But I think hyperliquid definitely, you know, took it to like 10x much bigger and better than us. Yeah, well, I'd be curious if you could just relay that story again about how this competition over USDA affected your announcement. Yeah, it wasn't affecting. I mean, we were

supposed to announce it in the middle of the week, but then we saw the USCH announced, well, the governance forum and we follow it up very closely and then we realized that, okay, you know what, instead of announcing in the middle of the week, because everybody is following USBH, we should just announce ours a little bit earlier. So we worked over the weekend. Okay. Yeah. Yeah. Well, you know, clearly, I think that was the right move because that news did break through on Monday. But yeah, by the middle of the week, the competition over USDA-H kind of had broken through to. to a fever pitch. So the other thing that's been really interesting to watch is all these different arguments that have been made in public over, you know, which team should win. And, you know,

there's been a lot of different kind of factors that people have been calling out about, you know, what they think are more important than others. When your team was trying to decide which team to go with for USDM, what factors did you consider and how did you eventually make your choice? Yeah, the analogy I often think about doing business development in crypto is always, it's like a pick, it's like early stage investing. The fundamental thesis and ethers and how we think about just business development is picking the right team, whether they are founders or the team within a larger company. And then the reason is that if the founder and team really value your business and value the partnership, then they can actually weather all of the difficulties, right? So I saw that a lot of people were worried about, like, compliance.

Obviously, it was a reason for us. But if you look at Genius Act, it's going to take months for things to play out. And my job is to pick a team that's able to weather the compliance storm with us. Another factor would be like adoption of the stable coin. My job is to make sure that my partner is able to bring new use cases, is able to be resilient and strong when, you know, things are not going well. And then I think lastly would be, you know, a team that really value our own ecosystem, like understand what mega does.

I think in the case of hyperliquid, right, we both saw the announcement this morning from Guy. I think the chance of native markets winning is perhaps really high. I think here the hyperliquid community are valuing that, okay, we're going to choose an early stage company, even though they have no track record. But we believe that they're going to do the best thing for us, even though they're not giving 100% yield back to the community, right? But their goal is really gross, the USDA adoption.

Yeah, and just for people, so I know this is going to go out Friday, But on Thursday, at the time we're recording, it looks like Native Markets has a 93.5% chance of winning the USDA-Ticker on Polly Market. So, you know, I kind of also looked there's a little like dashboard where you can look at how the race is going. And yeah, it does look like all of, you know, I wouldn't say all, but like the vast majority of the validators that have a large stake are for Native markets. But I actually wanted to ask about that. Is it just so like when I was looking at it, I was like, well, you know, people can move their stake. Is it just that they haven't moved their stake? Or is it just that people think the whales are going to, you know, not change their stake?

And so like even if everyday people switch their stake, it doesn't matter? Or like, what do you think? Oh, I can only guess. I feel like people speculate on this. And I think part of it is a self-fulfilling prophecy. but I do think this idea of backing a native protocol makes sense to everyone, and it kind of became a consensus. Oh, okay.

Well, earlier in the week, I don't know if I would say that everybody thought that. But okay, before we even get into all that, I did want to ask, like, so you guys chose Athena, why did you choose Athena? Yeah, so I mean, Athena has a track record of building a stable con that is wildly successful. But second, I would say, like, you know, we follow our philosophy. I think working with Athena team with Guy has been really a pleasure.

They were able to solve a lot of our compliance issues. So we were actually thinking about this many months ago. This was before Genius Act, before, like, anyone even thought about it. So the amount of money and time we spent our legal was, like, insane. And then, and obviously, you know, Guy came and just, sorted a lot of things off our shoulder. And, you know, we are focusing on launching a chain, right? Like, our job isn't launching stable coin. So that's a primary reason. We've talked to other partners as well. And everyone has been, I would say, amazing. I have, you know, nothing against them.

To us, it's a matter of fit. It's a matter of just partnering with someone we really believe in. Well, in a moment, we are going to talk a little bit more about what exactly is happening with USDA. But first you record for the sponsors to make the show possible. Eric Trump, Donald Trump Jr., Tom Lee, Vlad Tenive, Paolo Ardoino, Balji Srinivasin, Arthur Hayes. These are just some of the headliners at Token 2049 Singapore, the largest crypto event in the world, happening October 1st and 2nd. Over 25,000 attendees, 500 exhibitors, and 300 speakers will converge for an unmissable week. Token 2049 will take over all five floors of Marina Bay Sands, transforming it into a pop-up city with 1,000 side events,

non-stop networking, and immersive experiences, all leading into the Formula One Grand Prix weekend. Ticket prices are rising this week. Visit asia.tokin249.com and use code unchained for 15% off tickets. Back to my conversation with Shui Yao. So you mentioned earlier about how people were valuing this hyper-liquid-aligned characteristic. Explain what that means. When people say that, what are they really saying?

Do you mean the characteristics of the different framework and criteria? Like, what does that mean in specifics? Like, what does it mean to be hyper-liquid-aligned? Like, why would somebody who's more like Apaches or Athena or whatever, some of those other teams that were not being described that way? Like, why, like, what is the difference? This is why I love your podcast, by the way. You're very, like, don't throw the word alignment to me, be specific.

So my mentor model has been, like, if hyperliquid goes down, what will this stablecoin partner do? If this stable coin partner have other business, they're going to abandon hyperliquine and go to something else, right? That's going to support the business. I think a super hyperliquid aligned team would stay. Again, weathering the storm along with the core team because this is their core battleground. Like, they have to win.

I think that's where like the spirits of alignment fundamentally comes from. Like, this is our bets. Oh, interesting. Sort of like we're already a success in other areas so we can cut our losses if this doesn't work out. Whereas like for something like a native market, which is I think the proposal that has the most, you know, frequently called hyperliquid aligned. They don't have anything else. It's like sink or swim kind of situation.

That is my interpretation of alignment. I think that's why people are saying, you know, home girl is the most bullish because they can't run away. There's nothing else out there. Okay. Well, so that's just one of the, you know, more common argument points that we've seen this week. And I wondered if you could talk about like some of the other, you know, critiques or or the way people are kind of prioritizing different characteristics.

Like as you're looking at that, do you feel like there's certain ways that people are thinking about this that's like a little bit smarter or like not as smart? Like what are some of the different arguments that you've seen that kind of caught your attention as like maybe how people are not necessarily, you know, because like the people in the public, they're not building. So just in conversation, they might not be thinking about it the way that like a builder would. There are a few actually stood out to me and actually contributed to how, you know, as an observer, I look at this, which again, makes me even more bullish on hyperliquid, I guess. I think what they jump up to me was, I think, Paxos offering. They do have unfair advantage in Web 2, in Trified that I think no one else can offer. I think that's really attractive. And I think the second one was, I think the lawyer at Varian Farm tweeted out, you know, about the compliance.

It's really about, it's not about compliant today. It's really about complying in the future, which I thought was like a genius argument. It's actually how we thought about picking a partner as well. And then I think the last one was, I forgot whom, you know, I think the Athena argument has always been like, you know, if the rate goes down, and then you kind of want a more yield-bearing stable coin. I think that was clever. You know, the way I really think about stable coin is, you know, there are two type of stable coin users.

One is the yield-sensitive ones. You know, whatever you do, you have a risk appetite that, you know, trading pair, everything has to be like levered and there has to be like something that's juicier than the 5% T-bill. And the other part is the yield-agnostic one. I think for an ecosystem, you've got to have both. And it seems like the status quo is, you know, for the yield bearer, and you do have Eustina. You would have the newer ones, such as a cap protocol.

For the yield agnostic one, you have USC, which is already big on hyperliquid. I assume USCT or USCT0 might come to hyperliquid as well. Big fan of the UST team. We work with them as well. And then USDA. So, yeah, that's how I see the whole landscape. Okay. So then I did want to also ask just, like, that moment when you saw that Athena withdrew,

what did you think of that? Like, did you think that was a smart, you know, move on their part? Like, why not just wait and see what happens over the next few days? Or, yeah, why do you think they decided to withdraw? I could only guess. I think, you know, when you're a founder, every day you wake up, you're like, I have, like, 100 things to do. And I need to prioritize. I think I'm just guessing in the Athena team's head is like, okay, I probably have other priority that I should work on, not sure about the hyperliquid

situation given, you know, where the stakers are staking, the likely outcome of the votes, and I should just like cut the laws and focus on something else. That's more important. But also, I thought that post was genius because it gets a, tension and then everyone actually can see if you think that doesn't win the proposal, what else they're going to do in the hyperliquid ecosystem? So all in all, I think, is a winning post. Yeah, I mean, they basically said we already have these other tickers anyways. We're going to go ahead and do everything that we said we would do in the proposal,

but with a different ticker. Yeah, because I think the line that got me was something like, what was it, like saving five basis points on yield that's like going to be going down anyway. like meaning if it's from the treasuries, then yeah. So it's like, okay, yeah, that's a good point. All right. Oh, uh-huh. No, I was going to say exactly that they're catering toward the yield sensitive audience.

Yeah, exactly. All right. So I just also want to ask like about this competition. Like, do you feel like we're going to be seeing more of this kind of public, you know, RFP type situation with Dow's or do you feel like we won't? because, you know, there has been controversy. And I do see still, like, some, you know, drama and intrigue on my timeline, people accusing each other of this and that, like, this team was trying to bribe that team.

And anyway, as we saw also, Haseeb Qureshi of Dragonfly tweeted that, you know, he was already hearing well before the voting started that a bunch of the top validators were going to go for native brackets and he felt like it was sort of rigged from the start. And yeah, I retweeted that and I got a lot of pushback and Haseeb got a lot of criticism. So yeah, I'm curious, do you feel like this has overall been good for the community and like points to a future trend? Or do you feel like people after watching this are going to be like we're definitely not going to do anything in the public? So, I mean, what hyperliquid did is very hyperliquid quoted. I doubt a lot of other protocol can replicate.

I think they just have insane vision and it's almost like a style and attitude in how they run their ecosystem. I think the public pushback is very stereotypical crypto. I don't know, you and I have been this industry for a long time. People just like catch on this controversial stuff. And honestly, this industry has been quiet in the last few months. So I don't know. I just saw people enjoy this. But yeah, I remain, I'm not certain how many teams will replicate such a, you know, public governance show.

Okay. Yeah. It's been, it's been interesting because it's captured so much attention, which is positive, but then there's just been, yeah, a lot of drama. Well, I would just add one more thing is I think I encourage more protocols to actually do open governance. I think this is what crypto was designed for in 2017, and people should do it. But I just think it's risky for a lot of teams. Yeah. Well, yeah. Basically, there's just been this interesting trend with the DAOs where it just feels like a lot of them are kind of pausing or just closing.

And even like scroll on Thursday also announced that they're, I don't remember the specifics of the wording, but yeah, they're not going to be as active in some fashion. And so like earlier before like basically when I recorded Wednesday with Agora and Paxos, we were like, oh, this has revived DOWs. And now now I'm like, maybe not. But anyway, so I wanted to ask you, do you feel like this concept of this protocol native stable coin? Do you feel like those stable coins will always win? Or do you feel like, you know, now that we've had so many teams that have proposed stable coins on hyperliquid that this will just be an ecosystem that is full of many

stable coins, like how do you feel that competition will play out once that these are all launched? I think the one that gives the most back to token holder and community participants will ultimately win. I think stable coins, the sub is as a business is perhaps not differentiated. So you have to customize your offering based on what that ecosystem is known for and it was important to that ecosystem. You know, in Hyperliquid is always the crypto-native. I listened to your part with Paxos and Agora. They kept mentioning, you know, we're here to supercharge a crypto-native ecosystem.

So, yeah, I do not see many stable coin in successful ecosystem. I think they converge into the two category I mentioned, yield-sensitive and yield-agnostic. Okay. And then what do you think all of this means for tether and circle on hyperliquid? Like, do you feel like they'll eventually be pushed out in some way? Or what do you, yeah, see happening to these incumbents? Unlikely in the near or medium term. I think they will continue to be there. I think they're adapting as well. You know, I think before it's incredibly expensive and difficult, right, to get this incumbent. And I think now they're finding new solutions to be or perhaps.

on different ecosystems. So I think the how to see the battle is about to start. And I think fundamentally going back to what I said in the beginning, it is such a bullish news for the ecosystem. Because what is happening is competition is driving more economic back to the user and developers. So I think that's also why this news is so controversial. It's so significant. and it's such a demonstration of, I think, just next step, what the protocol is really about.

It's about bringing economic value back to their uses. Okay. All right. Well, it's been a pleasure having you on Unchained. Thank you, Laura. Don't forget, next up is the weekly recap. Stick around for this week in crypto after this short break. Thanks for tuning in to the weekly news recap. Let's begin. Black Rock weighs tokenizing E. TFS for 24-7 trading. Black Rock, the World.

world's largest asset manager is exploring how to bring exchange traded funds onto blockchain networks, according to people familiar with the effort cited by Bloomberg. The initiative would involve creating tokenized versions of funds tied to real-world assets, such as equities, subject to regulatory approval. Tokenized ETFs could expand trading beyond Wall Street's regular hours, widen international access, and even allow shares to be used as collateral within crypto markets. The move follows BlackRock's successful launch of its spot Bitcoin ETF and the tokenized money market fund Biddle, which has grown past $2 billion in assets. Chief Executive Larry Fink has repeatedly said, every financial asset can be tokenized, highlighting the firm's

long-term vision. While tokenized assets remain a small market compared with the multi-trillion dollar ETF industry, BlackRock's interest signals growing momentum. Nasdaq seeks SEC approval to list tokenized stocks. NASDAQ has filed a proposal with the U.S. Securities and Exchange Commission to allow trading of tokenized shares on its exchange, a step that could mark the first time blockchain-based equities appear on a U.S. regulated market. The plan would let investors choose between traditional and tokenized settlement

while preserving the same shareholder rights as underlying stocks. In its filing, NASDAQ said, tokenized assets would carry the same execution priority as conventional shares and be clearly labeled for clearing through the Depository Trust Company. Chief Financial Officer Sarah Youngwood said at a recent industry conference, The solution leverages the current infrastructure and market structure. The initiative arrives as regulators in Washington consider broader rule changes for digital assets. Experts caution integration with the DTCC's massive settlement system

could prove costly and complex, but others view the proposal as a breakthrough that could bring blockchain directly into, Wall Street's core plumbing. Atkins presses on-chain capital raising without legal uncertainty. U.S. Securities and Exchange Commission Chairman Paul Atkins used a keynote at the OECD in Paris to urge clearer rules for blockchain finance. He said entrepreneurs and investors should be able to raise capital on-chain without endless legal uncertainty, while reaffirming that most tokens fall outside securities law. The remarks come under the SEC's Project Crypto Initiative, which seeks to modernize regulations so trading, lending, and staking can operate under a single

framework with updated custody rules. Atkins described the approach as offering only the minimum effective dose of regulation needed to protect investors, a shift from the enforcement-heavy policies of prior years. The SEC and Commodity Futures Trading Commission will hold a joint roundtable later this month to explore how products like perpetual contracts and decentralized finance could return to U.S. markets. Forward Industries raises $1.65 billion for Salana Treasury. Forward. Industries has closed a $1.65 billion private placement to create what it calls the largest Salana-focused corporate treasury to date. The NASDAQ listed firm secured commitments from

Galaxy Digital, Jump Crypto, and Multi-Cointer. capital, among others. Shares of forwards surged as much as 128% in pre-market trading, while Solana's sole token gained over 2%. The company said the funds will be used to anchor its balance sheet in Sol and participate actively in Solana's decentralized finance markets. Multi-coin co-founder Kyle Simani has been appointed chairman of the board, with executives from Galaxy and Jump joining as observers. The move positions forward alongside other firms building Solana treasuries, including Upexy and Sharps technology. Commenting on the momentum, Bitwise CIO Matt Hogan, noted that,

all the ingredients are there for an epic end of year run for Solana, pointing to treasury accumulation and pending exchange traded product filings as catalysts for what he called Solana season. In related news, the Avalanche Foundation entered late-stage talks to raise $1 billion through two U.S.-based investment vehicles that would use the capital to buy discounted tokens directly from the foundation. Mix faces $170 million civil attack allegations. Decentralized derivatives platform, Mix finances under scrutiny after blockchain analytics firm.

Bubble Maps alleged a single entity exploited its token airdrop for roughly $170 million. Investigators flagged about 100 wallets, all covered. created around the same time and funded through OKX that together claimed nearly 10 million Mix tokens. Bubble Maps called the incident the biggest air drop Sibble of all time. The claims follow Mix's token, soaring more than 1,000 percent in two days, sparking a short squeeze that liquidated $40 million in positions. In its response, the team said rewards were tied to genuine trading activity and liquidity provision, though it acknowledged allowing high-volume users to change addresses before launch. From the perspective of focusing on trading itself, we did not impose specific

prohibitions on such requests, the team stated. Scroll Dow halts governance after leadership resignations. The decentralized community behind the Ethereum layer 2 scroll has paused its governance process following several high-level departures. Delegate Olympio disclosed on X that Dow leader Eugene resigned earlier this week with co-founder Haichin Shen confirming the team is redesigned governance. The decision has sparked questions about the status of ongoing proposals, including a Treasury management plan. They are redesigning governance, but the pathway forward is unclear, Olympio noted, adding that communication on next steps has been limited. Scroll contributor Razaziety emphasized that the move should be seen as a temporary pause rather than a permanent dismantling

of governance. For now, active proposals remain visible, but their execution is uncertain. The The Dow, which launched alongside its native token, SCR, operates in tandem with the Scroll Foundation and a Security Council. Global crypto users warned after massive supply chain hack. Millions of crypto users were on alert this week after hackers injected malware into widely used JavaScript packages downloaded billions of times each week. The attack began when a developer was tricked by phishing emails, giving attackers access to publish tainted code that could secretly swap wallet addresses and redirect funds across major blockchains, including Bitcoin, Ethereum, and Solana. Security experts initially urged users to halt transactions,

warning the compromise could be catastrophic. But implementation errors exposed the malware quickly, causing automated builds to fail and limiting losses. On-chain data shows attackers netted less than $505 before being shut down. Ledger's chief technology officer Charles Gillamay called the outcome fortunate, while cautioning that supply chain attacks remain a serious threat. Linea AirDrop marred by outages as token slides. Consensuses Ethereum Layer 2. Network Linea launched its Linea token this week, but the rollout was hampered by technical issues. Ahead of the token generation event, block production on the MayNet paused for about 45

minutes due to sequencer performance problems, later described as a partial outage that lasted nearly 10 hours. While 749,000 wallets were eligible to claim 9.36 billion tokens, many users reported failed transactions and rising gas fees. By contrast, Binance recipients accessed their allocations instantly, prompting criticism from community members. Linea head Declan Fox said the network was simply overwhelmed, noting, once you get punched in the ring, you need to react well, which we did. After the bumpy debut, Linea tokens lost more than 20% from their their peak. Seeking to calm concerns, Consensus founder Joseph Lubin suggested future rewards for long-term holders, hinting that additional distributions from consensus or metamask-linked projects

could be directed to those who keep linear tokens on hand. Unchained is produced by Laura Shin, with help from Matt Pilchard, Juan Oranovich, Margaret Curia, and Pam Majumdar. The weekly recap was written by Juan Aranovich and edited by Stephen Erlich. Thanks for listening. Thank you.