Unchained, Ep. 902 – Summary

Title: Why the War Over the USDH Ticker on Hyperliquid Is Bullish for Crypto
Host: Laura Shin
Guest: Shuyao Kang, Co-Founder, Mega Eve
Date: September 12, 2025

Overview

In this episode, Laura Shin speaks with Shuyao Kang (aka “Brother Bing”), cofounder of Mega Eve, about the intense competition for the USDH stablecoin ticker on Hyperliquid. The conversation explores the public drama, shifting competitive dynamics in stablecoin issuance, community governance, and why such controversies ultimately reveal crypto’s strengths.

Main Discussion Topics

1. The USDH Ticker Competition – Context and Importance

• Public Auction Dynamics: Hyperliquid’s public RFP for the USDH stablecoin ticker has attracted multiple teams, major public debate, and drama.
• Controversy and Drama: Accusations that the competition was “in the bag” for Native Markets, proposals revamped mid-race, and teams withdrawing—most notably Athena on Thursday morning.
  • “The race has had an element of drama. There’s been accusations that this was in the bag for native markets all along.” – Laura Shin [01:33]
• Bullish Signal: The guest sees the competition and controversy as positive, arguing it aligns with crypto’s goal: putting economic power and yield back into hands of users and developers.
  • “It is such bullish news for the ecosystem because what is happening is competition is driving more economic back to the user and developer.” – Shuyao Kang [00:00; 22:04]

2. Protocol-Native Stablecoins & Changing Roles

• Protocol Ownership: The rise of protocol-issued stablecoins signals a shift away from third-party intermediary models.
  • “Stablecoin issuer used to be serving as an intermediary...but now we’re seeing that protocol are owning the stablecoin narrative again.” – Shuyao Kang [03:15]
• Community Value: The most valuable stablecoins are those aligned with (and profit-sharing with) the ecosystem and users, aiming for sustainability.
• User Pain Point: As ecosystems multiply, stablecoin options can be confusing. The ideal: a single, community-aligned stablecoin per ecosystem.

3. The Impact of the USDH Drama on USDM Launch

• Announcement Timelines: Mega Eve planned their USDM stablecoin announcement mid-week, but moved it forward to avoid being overshadowed by the USDH drama.
  • “We realized...everybody is following USDH, we should just announce ours a little bit earlier. So we worked over the weekend.” – Shuyao Kang [05:02]

4. How Builders Choose Partners for Stablecoins

• Philosophy and Fit: Picking the “right team” is akin to early-stage investing. Key factors:
  • Team’s resilience and commitment,
  • Ability to handle compliance headwinds,
  • Willingness to support the ecosystem’s growth,
  • Deep understanding of partner protocols.
• Example: Mega Eve partnered with Athena for USDM, valuing their track record and help with regulatory hurdles.
  • “Working with the Athena team with Guy has been really a pleasure. They were able to solve a lot of our compliance issues.” – Shuyao Kang [09:21]

5. Alignment and “Hyperliquid-Aligned” Debate

• Definition of Alignment: A “hyperliquid-aligned” team is one for whom the protocol’s success is existential—they have no other major business lines, so their incentives are focused.
  • “If hyperliquid goes down, what will this stablecoin partner do? ...A super hyperliquid aligned team would stay, weathering the storm along with the core team because this is their core battleground.” – Shuyao Kang [11:52]
• Contrast with Incumbents: Large, diversified teams may pivot if challenges arise; smaller or native teams must double down.
  • “People are saying, you know, Homegirl is the most bullish because they can’t run away. There’s nothing else out there.” – Shuyao Kang [12:53]

6. Community Arguments, Critiques, and Market Forces

• Public Governance Drama: Much of the debate has happened in public, with Twitter (X) threads, governance forums, and speculation.
  • Criticisms: claims of rigging, behind-the-scenes agreements, allegations of bribery among teams [18:18].
• Notable Arguments:
  • Paxos has Web2 and TradFi advantages hard to match [13:45].
  • Legal arguments: it’s about “complying the future” rather than just today’s regulations.
    • "The lawyer at Varian Farm tweeted...it's not about compliance today, it's really about complying the future." – Shuyao Kang [14:06]
  • Yield sensitivity: Athena’s pitch is for users who care about maximizing yield, another segment just wants stability.
    • “There are two types of stablecoin users. One is the yield-sensitive ones...The other part is the yield agnostic one. I think for an ecosystem you’ve got to have both.” – Shuyao Kang [14:47]

7. The Athena Withdrawal & Market Reaction

• Athena’s Exit: Athena withdrew its proposal for USDH, citing shifting priorities and a desire to focus elsewhere—an act seen by Kang as “genius” marketing and capital preservation.
  • “That post was genius because it gets attention and then everyone actually can see if Athena doesn’t win...what else they’re going to do in the Hyperliquid ecosystem.” – Shuyao Kang [15:57]
  • Athena will continue to deliver on their promises, just on a different ticker, targeting the yield-seeking crowd [16:46].

8. Public RFPs and the Future of DAO Governance

• Open Governance Pros and Cons: Hyperliquid’s open, messy, dramatic process is unique—and difficult to replicate.
  • “What Hyperliquid did is very hyperliquid coded and I doubt a lot of other protocol can replicate. They just have insane vision...it’s almost like a style and attitude.” – Shuyao Kang [18:23]
  • “I encourage more protocols to actually do open governance. I think this is what crypto was designed for in 2017 and people should do it, but I just think it’s risky for a lot of teams.” – Shuyao Kang [19:16]
• DAOs Pausing: Trend of some DAOs (e.g., Scroll DAO) slowing or pausing governance, questioning if such open processes are sustainable.

9. Outlook for Protocol-Native vs. Incumbent Stablecoins

• Winners’ Profile: Stablecoins which deliver most value back to token holders and community participants will ultimately win long term.
  • Stablecoin-as-a-service isn’t itself special—differentiation comes from how value is shared.
• Yield Segmentation: Market will likely converge on a few major stablecoins per ecosystem: yield-sensitive/leveraged and yield-agnostic.
  • “For an ecosystem you’ve got to have both.” – Shuyao Kang [14:47].
• Tether/Circle's Role: Unlikely to see USDT/USDC fully displaced in the near-to-medium term, but they’re adapting to the changing landscape [21:36].

Notable Quotes & Moments

• “It is such bullish news for the ecosystem because what is happening is competition is driving more economic back to the user and developer.”
  — Shuyao Kang [00:00; 22:04]
• “Hyperliquid’s public auction is a fantastic opportunity not only to bring attention but bring the best deals out to the [community].”
  — Shuyao Kang [03:02]
• “If the founder and team really value your business and partnership, then they can actually weather all of the difficulties.”
  — Shuyao Kang [06:21]
• “A super hyperliquid aligned team would stay...because this is their core battleground. Like they have to win.”
  — Shuyao Kang [11:52]
• “This industry has been quiet in the last few months, so I don’t know, I just saw people enjoy this [drama].”
  — Shuyao Kang [18:23]
• “Stablecoin as a service, as a business, is perhaps not differentiated. So you have to customize your offering based on what that ecosystem is known for and what’s important.”
  — Shuyao Kang [20:39]

Key Timestamps

• 00:00–01:15: Introduction; why USDH ticker fight is bullish for crypto
• 01:15–04:52: Background: public auction on Hyperliquid, state of competition, drama, and early signs
• 05:02–06:12: How the drama impacted Mega Eve’s USDM launch
• 06:12–07:58: How to pick stablecoin partners; importance of ethos and resilience
• 08:50–09:21: On validator voting power and the “self-fulfilling prophecy” of support for native markets
• 11:17–13:04: What “hyperliquid aligned” truly means—survival and focus over diversification
• 13:45–15:37: Standout community arguments, user types (yield-sensitive vs. yield-agnostic)
• 15:57–17:18: Athena’s exit—reasons and tactics
• 18:23–19:32: Will more DAOs follow Hyperliquid’s open RFP style?
• 20:39–21:22: Will protocol-native stablecoins always win? Market segmentation predictions
• 21:36–22:28: What happens to USDT and USDC? The future for incumbents

Takeaways

• The very public, contentious race for the USDH ticker reflects crypto’s core promise—putting value and governance back into the hands of builders and users.
• Public drama is healthy: it forces transparency, multiplies community learning, and demonstrates what’s at stake.
• Protocol-native stablecoins are on the rise, but their ultimate success hinges on delivering real value to communities and winning user trust.
• The experiment on Hyperliquid may not be widely replicable, but it sets an idealistic benchmark for transparent, open DAO governance.
• Competition, even with controversy, is bullish for the ecosystem—driving innovation and better deals for users.

For crypto builders and observers, this episode provides a lively, insider view of the new competitive landscape for protocol-aligned stablecoins, how DAO governance is evolving, and why conflict and controversy are ultimately signs of vitality in the space.