Dragonfly partner Haseeb Qureshi suggests Hyperliquid stablecoin competition is rigged as he claims a ‘backroom deal’ has already been concluded. Native Markets' proposal came out almost immediately after the USDH RFP was announced, implying they had advanced notice, complained Qureshi on X.

Dragonfly managing partner Haseeb Qureshi has publicly alleged that the high‑profile competition to select an issuer for Hyperliquid’s planned USDH stablecoin is effectively predetermined in favor of Native Markets. Hyperliquid, a leading on-chain perpetuals exchange and Layer 1, is running an open request-for-proposals (RFP) process where validators choose which partner will issue USDH, a native, compliant USD-pegged stablecoin intended to replace the large USDC balances currently parked on the platform. The mandate is significant because roughly $5.6 billion in USDC on Hyperliquid could be converted into USDH reserves, generating an estimated $220 million per year in Treasury bill yield for the ecosystem. According to Qureshi, multiple bidding teams told him that validators were only seriously considering Native Markets, making the process feel like “a backroom deal already done,” and he highlighted that Native’s proposal was published almost immediately after the USDH RFP went live, which he claimed implied advance notice. His comments are sensitive because Dragonfly is an investor in at least two competing bidders, Ethena and Agora, both of which submitted aggressive revenue‑sharing proposals for USDH and are vying for the same mandate. Validators and community figures associated with Hyperliquid pushed back, with one prominent participant stating that Qureshi’s claims were “factually incorrect” and that they had been actively reviewing proposals and engaging all bidders. The controversy underscores how politically and economically important the USDH mandate has become, with major stablecoin issuers and DeFi protocols—including Paxos, Sky/Maker, Ethena, Agora, Native Markets, and others—competing to control Hyperliquid’s native dollar and its associated yield. Native Markets’ pitch emphasizes native minting on Hyperliquid’s EVM and a split of reserve yield between HYPE buybacks via the Hyperliquid Assistance Fund and USDH growth, contrasting with rivals like Ethena that promise to direct the overwhelming majority of reserve revenue back into the Hyperliquid ecosystem. The dispute over alleged favoritism highlights tensions between decentralization ideals and real-world governance dynamics in large DeFi ecosystems, as validator incentives, venture backing, and protocol economics all intersect around a single stablecoin decision.

✨ AI-generated background, compiled from web sources — not editorial content.

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