Native Markets: An Overview
Native Markets issues USDH, a U.S. dollar–pegged stablecoin that functions as the native quote asset for the Hyperliquid decentralized perpetuals exchange. USDH captures yield from its reserve assets within the Hyperliquid ecosystem and seeks to reduce reliance on bridged stablecoins like USDC.
Quick answer
Native Markets issues USDH, a U.S. dollar–pegged stablecoin that functions as the native quote asset for the Hyperliquid decentralized perpetuals exchange. USDH captures yield from its reserve assets within the Hyperliquid ecosystem and seeks to reduce reliance on bridged stablecoins like USDC.
Native Markets is a U.S.-based decentralized finance company that developed USDH, a stablecoin pegged to the U.S. dollar. USDH operates as the native stablecoin for Hyperliquid's decentralized perpetuals exchange and was created to internalize yield from stablecoin reserves inside the Hyperliquid ecosystem while lowering dependence on externally issued, bridged stablecoins such as USDC.
Overview
Native Markets was founded to issue and manage USDH, Hyperliquid’s native stablecoin. The initiative centers on establishing an "Aligned Quote Asset" (AQA) for the exchange, a structure that contractually allocates part of the stablecoin's revenue to Hyperliquid. The design intends to form a self-reinforcing financial loop in which the stablecoin's expansion helps increase ecosystem value, chiefly by enabling buybacks of Hyperliquid's HYPE token.
Hyperliquid's community and validators selected Native Markets for its explicit "Hyperliquid-first" strategy. That approach prioritized direct issuance on Hyperliquid's Layer 1 (HyperEVM) to minimize cross-chain friction, favored on-chain, enforceable yield-sharing over trust-based arrangements, and proposed an issuer-agnostic system to improve platform sovereignty. By converting Hyperliquid's existing stablecoin deposits to USDH, the project sought to capture revenue that would otherwise accrue to outside issuers. Projections from September 2025 estimated that migrating the existing 200 million in annual revenue for the ecosystem.
History
The USDH Issuer Competition
In early 2025, Hyperliquid issued a Request for Proposal (RFP) to choose an issuer for a native stablecoin to be designated USDH. Native Markets, a newly created entity, entered the contest alongside established digital-asset firms including Paxos, BitGo, Ethena, Frax, Agora, Sky, and Bastion.
Hyperliquid's validators steered the selection, emphasizing preferences for native issuance on Hyperliquid's network, transparent and contractually enforceable revenue-sharing, and an architecture that avoided reliance on a single institutional issuer.
Selection and Vote
The selection process unfolded over several days in September 2025. On September 9, bidders presented their proposals at a multi-hour community roundtable. Native Markets rapidly gained prominence, securing public backing from validators such as Infinite Field, CMI Trading, and the largest validator, "Nansen x HypurrCollective." Prediction markets on Polymarket reflected this momentum, assigning Native Markets better than 90% odds of prevailing by mid-September.
USDH Stablecoin
USDH is a centralized, fiat-backed stablecoin engineered to maintain a 1:1 peg with the U.S. dollar. It is issued by Bridge Building, Inc. ("Bridge, a Stripe company") and serves as Hyperliquid's native quote and settlement currency.
Reserve Mechanism
USDH is fully collateralized via a mixed portfolio of off-chain and on-chain assets.
The project provides transparency through blockchain oracles and planned its inaugural monthly third-party reserve attestation for November 2025.
Issuance, Redemption, and Compliance
- Off-chain Reserves: Consist of cash and U.S. Treasury securities held in the BlackRock Liquidity Funds (BLF) Treasury Trust Fund. These assets are managed by global asset manager BlackRock, with JP Morgan Chase and Lead Bank serving as custodians.
- On-chain Reserves: Composed of tokenized U.S. Treasuries (USTB). This portion of the reserve is managed by Superstate, utilizing Fireblocks as the infrastructure custodian.
Ecosystem Integration and Economics
USDH's economic design is tightly connected to the Hyperliquid exchange via mechanisms intended to share revenue and drive adoption.
Aligned Quote Asset (AQA) Protocol
Under Hyperliquid's AQA framework, Native Markets programmatically directs 50% of USDH's gross revenue to the Hyperliquid Assistance Fund (AF). The Assistance Fund then deploys those funds to repurchase Hyperliquid's native token, HYPE, on the open market, creating deflationary pressure and returning value to the ecosystem. Native Markets retains the remaining 50% of revenue to support USDH's expansion and integration.
Trader Incentives
Hyperliquid provides multiple incentives to encourage traders to use USDH as the quote currency in its markets:
- Taker fees are 20% lower.
- Maker rebates are 50% higher.
- Trading volume counts 20% more towards qualifying for lower fee tiers.
- Bridging & On-ramps: Across Protocol and Relay facilitate cross-chain transfers of assets to USDH on Hyperliquid.
- DeFi Protocols: Integrations included lending/borrowing platforms Hyperlend, Morpho, and HypurrFi; the DEX Project X; the aggregator OpenOcean; and Rysk Finance.
- Integrated Order Books (HIP-3): Felix, a perpetuals DEX, and Ventuals, a market for pre-IPO stock futures, were slated to support USDH.
Team and Key Figures
Native Markets' official site characterizes the team as "alumni of Uniswap, BlackRock, Stripe, Circle, and Ramp" without listing individual names, while reporting by crypto-focused media outlets has named several principal contributors.
- Max Fiege: Team Lead and co-founder of Native Markets, described as an "early Hyperliquid ecosystem advocate" and a "well-known Hyperliquid investor."
- MC Lader: A member of the Native Markets team who previously served as the President of Uniswap Labs.
- Anish Agnihotri: A member of the team identified as a blockchain researcher.
Frequently Asked Questions
What is Native Markets?
Native Markets issues USDH, a U.S. dollar–pegged stablecoin that functions as the native quote asset for the Hyperliquid decentralized perpetuals exchange. USDH captures yield from its reserve assets within the Hyperliquid ecosystem and seeks to reduce reliance on bridged stablecoins like USDC.
How does Native Markets work?
Native Markets operates through smart contracts deployed on the Ethereum blockchain. Users interact directly with the protocol via a web interface or wallet integration — no account creation or KYC is required. All operations are settled on-chain and are publicly verifiable.
Is Native Markets safe to use?
Native Markets has undergone smart contract audits and is among the more established protocols in DeFi. However, all DeFi protocols carry inherent risks including smart contract vulnerabilities, oracle failures, and liquidation risk. Users should only commit funds they can afford to lose and review the protocol's audit reports before participating.
What blockchain is Native Markets built on?
Native Markets is primarily deployed on Ethereum. Many leading DeFi protocols are also expanding to Layer-2 networks such as Arbitrum, Optimism, and Base to reduce transaction costs and improve throughput.
What are the risks of using Native Markets?
Key risks include smart contract exploits, governance attacks, oracle manipulation, liquidity crises, and regulatory uncertainty. DeFi protocols are uninsured — losses from exploits are typically not recoverable. Always review audits and understand the mechanism before depositing funds.
How do I get started with Native Markets?
To use Native Markets, you need a self-custody wallet (such as MetaMask or Rabby), ETH for gas fees, and the relevant tokens for the action you want to perform. Visit the official protocol interface, connect your wallet, and follow the on-screen steps. Start with a small amount to familiarise yourself with the UX.
What token does Native Markets use?
Native Markets typically has a native governance token that allows holders to vote on protocol parameters, fee structures, and treasury allocations. Check the protocol's documentation for the current token ticker, total supply, and distribution schedule.
Who created Native Markets?
Native Markets was founded by a team of blockchain developers and DeFi researchers. The protocol is typically governed by a decentralised autonomous organisation (DAO), meaning ongoing development and parameter changes are decided collectively by token holders rather than a central company.
What is the total value locked (TVL) in Native Markets?
Native Markets's TVL fluctuates with market conditions and can be tracked in real time on DeFiLlama (defillama.com). TVL measures the total value of assets deposited into the protocol and is a key indicator of user confidence and liquidity depth.
How does Native Markets compare to other DeFi protocols?
Native Markets is differentiated by its specific mechanism, fee structure, and supported assets. Comparing protocols should include factors such as audited security posture, capital efficiency, governance maturity, cross-chain availability, and historical uptime. DeFiLlama and Dune Analytics provide side-by-side comparative data.