Original title: What does it mean to be a Hyperliquid-aligned fiat stable?
Original author @husd_fiat
Original translation: zhouzhou, BlockBeats
Editors Note: HUSD is a public stablecoin project launched by Hyperliquid, which returns the interest of stablecoins to the ecosystem, which is used to repurchase HYPE, subsidize interface fees, support the Builder Code model, and promote ecological growth. It breaks the USDC/Tether model, so that funds no longer flow to centralized institutions, but feed back to the community and product development.
The following is the original content (for easier reading and understanding, the original content has been reorganized):
What the ecosystem really needs
The story of HUSD is about disrupting a multi-billion dollar stablecoin market. Hyperliquid started out as the leading perp DEX, outperforming old players like DYDX and GMX. As the product continued to attract new users and gradually introduced spot markets, Hyperliquid gradually evolved into a Binance/Coinbase competitor. Next, the ecosystem will challenge the fiat stablecoin duopoly - Circle and Tether.
Currently, approximately $2.5 billion of cross-chain USDC is locked in HyperCores order book and earns approximately 4.3% interest. These earnings can bring Circle Internet Financial approximately $107.5 million in revenue each year, flowing into its private balance sheet. Every new USDC deposited in Hyperliquid is further expanding Circles cash flow. But what if this value does not flow to Circle, but is instead used to strengthen the Hyperliquid ecosystem? Why are we still bound by the outdated traditional stablecoin model of USDC when there is an opportunity to break through the existing framework?
The opportunity cost of choosing to stick with the old stablecoin
As Hyperliquids influence in on-chain transactions continues to grow, net deposits of fiat stablecoins will also grow, providing liquidity for perpetual contract markets and spot markets. In a future where Hyperliquid grows 10x, 100x, or even 1,000x, the opportunity cost of continuing to use traditional stablecoins will also become higher and higher. The value from the stablecoin layer will either continue to flow to the balance sheets of Circle and Tether, or flow back to Hyperliquids own ecosystem.
A new stablecoin model tailored for Hyperliquid
The Assistance Fund has proven through automatic repurchase of HYPE that the cash flow generated by the protocol can and should be directly returned to the community. In the past 30 days alone, the Assistance Fund has recovered millions of dollars of HYPE from the market.
HUSD continues this strategy, but it is carried out at the stablecoin level: initially, a large part of the interest income from HUSD will be used to purchase HYPE, which will then be deployed in various growth directions of the Hyperliquid ecosystem. In other words, every time you use HUSD, you will increase buying pressure on HYPE and reinvest value into the development of Hyperliquid.
How will the repurchased HYPE be used?
HUSD: Fueling the Future of Builder Code
HUSD plays a key role in driving the explosion of the Builder Code business model. Builder Code is a native feature of Hyperliquid that allows an interface operator to charge a fee for spot or contract transactions submitted on behalf of users. Its goal is to provide a way to monetize Hyperliquids last mile distribution - that is, anyone who can effectively attract and retain users can use Builder Code to build a trading business that is not restricted by technology or liquidity.
The unit economics of this type of business may be very impressive, but at this early stage, new brands still face the problem of cold start, and the moat between different interfaces is not yet clear. The emergence of HUSD can help these Hyperliquid hybrids complete their launch and provide a way to differentiate between them.
By subsidizing Builder Code fees with HUSD, interfaces can charge users higher fees than they would otherwise without increasing user costs. Interfaces can earn revenue in real time and further use these funds for growth strategies.
For example: Assume that Interface XYZ has received a rebate budget of 100 HUSD. All contract transactions with its Builder Code will be counted by the system, and the corresponding users rebate balance will continue to grow. Before users actually start to bear the costs, the interface can handle at least about $100,000 in contract transactions (that is, 100 HUSD divided by a 0.1% handling fee rate). At the same time, the interface operator can also reinvest the income brought by the Builder Code into attracting new users or retaining users.
This is how HUSD powers the “real-time growth” of the Hyperliquid ecosystem.
Summarize
HUSD combines two core insights: integrating the denominated assets (stablecoins) used in transactions and the cash flows generated by them into the trading platform system. The end result is a stablecoin of public product nature, which converts the originally static reserve interest into active, compound growth of the Hyperliquid ecosystem.
HUSD is a public product project operated by Felix and supported by community members. It will be launched through the Felix Points system. This deployment is also built on the foundation laid by @m 0 foundation. It is its vision of a global stablecoin platform that makes HUSD possible.
Hyperliquid has disrupted the centralized exchange landscape, and HUSD is poised to do the same for traditional fiat stablecoins.
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