Hyperliquid's USDC-first strategy has successfully completed its USDH migration, with the native stablecoin now holding just $20 million in liquidity compared to USDC's $5.74 billion of Hyperliquid's total $5.96 billion stablecoin pool. According to AMBCrypto and DeFiLlama data, this dramatic shift reflects traders' preference for deeper liquidity and established settlement assets over newer DeFi-native stablecoins. The migration has been completed without disrupting user participation, maintaining approximately 6,932 Daily Active Addresses and over 315,000 Daily Transactions. Perpetual Trading Volume remains near $2.8 billion, reinforcing Hyperliquid's leadership in on-chain derivatives.
The Hyper Foundation has announced approximately $10 million in grants to help builders affected by the USDH sunset, covering migration and wind-down costs. According to reports from ChainThink, the official announcement was made on June 28, with the grant program providing affected builders with a limited period to update markets, move liquidity, adjust bridges or close USDH-related services. The funding targets developers impacted by the USDH wind-down, facilitating migration and ecosystem transition with specific grants for migration and exit strategies.
The grant program divides recipients into two categories: migration grants for teams that have integrated USDH and have migrated their related markets or deployments to USDC, and phased shutdown grants for teams that have chosen to discontinue their USDH-related activities. As per ChainThink, HIP-1 deployers relate to spot market deployments, while HIP-3 deployers relate to perpetual market deployments. Both groups may need support because USDH served as a quote asset or liquidity route for some products. HyperEVM protocols and USDH bridge operators may face direct technical changes, with grant amounts determined by auction deployment costs for HIP-1/HIP-3 deployers and USDH locked amounts for HyperEVM protocols.
The grant program follows Hyperliquid's wider move toward USDC, with Coinbase becoming the official USDC treasury deployer on Hyperliquid in May. According to Wu Blockchain, this strengthened USDC as the aligned quote asset across the ecosystem. The shift marks a change from the original USDH strategy, which launched to reduce reliance on outside stablecoin issuers and keep more reserve yield inside Hyperliquid. However, two stablecoin systems can split liquidity and add friction for traders. The current dominance of USDC indicates network effects are supporting its leadership, making it the preferred collateral across spot and perpetual markets.
The migration affects users as well as builders, with users holding USDH needing to convert balances, close positions or follow protocol-level migration steps. As reported by Wu Blockchain, the official USDH migration page says the dashboard supports USDH to USDC and US dollar fiat conversions until July 17, while the USDH/USDC spot order book will remain available. According to ChainThink, users can exchange USDH for USDC on the HyperCore spot order book, or use the Across protocol on HyperEVM for a free 1:1 exchange. According to Phemex News, USDH holders can convert assets to USDC via provided no-fee channels, ensuring a smooth transition. The conversion process has been completed without disrupting user participation levels.
The USDH sunset follows a competitive stablecoin race that drew wide attention across DeFi, with Hyperliquid validators voting on the USDH ticker after proposals from Native Markets, Paxos, Frax, Agora and other teams. According to Wu Blockchain, USDH later launched in a USDH/USDC pair and recorded more than $2 million in early trading. The new grant plan now focuses on cleanup rather than expansion, with builders needing to change collateral settings, update front ends, move liquidity, close markets or support users during withdrawals. Tether trails at around $155 million, indicating USDC's clear dominance in the Hyperliquid ecosystem.
