Many people may wonder why when analyzing Hyperliquid's USDH, it is often compared to UST and LUSD instead of USDT and USDC?
👉 The reason is simple: USDH is a decentralized stablecoin.
Its design and goals are more similar to UST (Terra's native algorithmic coin, which later collapsed) and LUSD (ETH collateralized stablecoin). USDH is backed by government bonds and repurchase agreements as reserves, and the majority of the profits are returned to HYPE holders, which is a typical DeFi endogenous flywheel.
On the other hand, USDT/USDC is essentially a centralized dollar IOU, with issuance and profits controlled by the company, meaning users do not receive interest and have no on-chain governance.
Therefore, what USDH aims to challenge are actually the native stablecoins in DeFi like DAI and USDe, rather than global payment tools like USDT and USDC.
