How Will HUSD Break the Stablecoin Monopoly and Contribute to the Hyper Ecosystem?

Original Article Title: What does it mean to be a Hyperliquid-aligned fiat stable?
Original Article Author @husd_fiat
Original Article Translation: zhouzhou, BlockBeats

Editor's Note: HUSD is a public stablecoin project launched by Hyperliquid, which channels stablecoin interest back into the ecosystem for HYPE buybacks, subsidizing interface fees, supporting the Builder Code model, and driving ecosystem growth. It breaks the USDC/Tether model, preventing funds from flowing to centralized institutions and instead nourishing the community and product development.

The following is the original content (reorganized for readability):

What the Ecosystem Truly Needs

The story of HUSD is about disrupting a multi-billion dollar stablecoin market. Hyperliquid initially emerged as a leading perpetual decentralized exchange (perp DEX), surpassing old players like DYDX and GMX. As the product continued to attract new users and gradually introduced spot markets, Hyperliquid evolved into a competitor to Binance / Coinbase. The next target for the ecosystem is the duopoly of fiat stablecoins—Circle and Tether.

Currently, around $2.5 billion of cross-chain USDC is locked in HyperCore's order book, earning approximately 4.3% interest. These earnings generate about $107.5 million in revenue for Circle Internet Financial annually, flowing into its balance sheet. Each new USDC deposited into Hyperliquid further expands Circle's cash flow. But what if this value doesn't flow to Circle and instead is used to strengthen the Hyperliquid ecosystem? In a situation where we have the opportunity to break through the existing framework, why should we still be bound by the outdated traditional stablecoin model of USDC?

The Opportunity Cost of Sticking with Old Stablecoins

As Hyperliquid's on-chain trading influence continues to grow, the net deposits of fiat stablecoins also increase, providing liquidity to the perpetual contract market and spot market. In a future where Hyperliquid grows by 10 times, 100 times, or even 1000 times, the opportunity cost of continuing to use traditional stablecoins will also rise. This value from the stablecoin layer will either continue to flow into the balance sheets of Circle and Tether or return to Hyperliquid's own ecosystem.

A New Stablecoin Model Tailored for Hyperliquid

The "Assistance Fund" established for Hyperliquid has already proven that the protocol's generated cash flow can and should be directly given back to the community. In just the past 30 days, the Assistance Fund has reclaimed millions of dollars' worth of HYPE from the market.

HUSD continues this strategy, but at the stablecoin level: Initially, a significant portion of the interest income generated by HUSD will be used to purchase HYPE, which will then be deployed to various growth initiatives within the Hyperliquid ecosystem. In other words, every time you use HUSD, you are increasing buy pressure on HYPE and reinvesting value back into the development of Hyperliquid.

How Will the Repurchased HYPE Be Utilized?

HUSD: Fueling the Future of Builder Code

HUSD plays a critical role in driving the emergence of the "Builder Code" business model. Builder Code is a native feature of Hyperliquid that allows an interface operator to charge a fee in exchange for executing spot or contract trades on behalf of users. Its aim is to provide a monetization path for the "last-mile distribution" of Hyperliquid—in other words, anyone who can effectively attract and retain users can establish a transactional business through Builder Code without technical or liquidity constraints.

While the unit economics of such businesses can be significant, new brands in this early stage still face a "cold start" problem, and the moats between different interfaces are not yet clear. The emergence of HUSD can help these "Hyperliquid hybrids" overcome their launch hurdles while offering a way for them to differentiate.

By subsidizing the fees of Builder Code with HUSD, interfaces can charge users higher fees without increasing user costs. Interfaces can instantly earn revenue and further utilize these funds for growth strategies.

For example: Suppose Interface XYZ receives a $100 HUSD rebate budget. All contract trades with its Builder Code will be counted by the system, and the corresponding user's rebate balance will continue to grow. Before users actually start incurring costs, this interface can handle at least about $100,000 in contract trade volume (i.e., 100 HUSD divided by a 0.1% fee rate). Meanwhile, the interface operator can reinvest the income from Builder Code into customer acquisition or retention.

This is how HUSD powers the real-time growth of the Hyperliquid ecosystem.

Summary

HUSD integrates two core insights: incorporating the transactional unit of account (stablecoin) and the resulting cash flows into the trading platform ecosystem. The ultimate result is a stablecoin with the nature of a "public good" that transforms the originally static reserve interest into an active, compounding growth within the Hyperliquid ecosystem.

HUSD is a public good project operated by Felix and supported by community members, which will be launched through the Felix Points system. This deployment also builds on the foundation laid by @m0foundation, whose vision of a "global stablecoin platform" has made HUSD possible.

Hyperliquid has already disrupted the landscape of centralized exchanges, and HUSD is preparing to do the same for traditional fiat-backed stablecoins.

Original article link: Link to the original article