The Great USDH Race

USDH is Hyperliquid’s proposed native stablecoin, aiming to capture its $6B+ stablecoin market, 95% of which is held in USDC (~$5.7B), and shift liquidity toward a protocol-owned, decentralized alternative. Fully GENIUS Act and MiCA compliant, it redirects 95–100% of reserve yields back to the community via HYPE buybacks, making validator votes less about issuer revenue and more about long-term ecosystem strategic alignment. Proposals closed Sept 10, validator declarations Sept 11, and the on-chain vote runs on Sept 14, with a two-thirds supermajority required and the Foundation abstaining. Bids came from Native Markets (compliance, yield sharing, ecosystem integrations), Paxos (95% yield sharing, dual-chain deployment), the Agora/AUSD consortium (100% yield, State Street custody, LayerZero interoperability), Frax (frxUSD-backed DeFi model), Stripe/Bridge (fiat rails, but criticized for conflicts), and Ethena, which withdrew Sept 12 after concerns about “nativeness.” As of Sept 12, Native Markets leads with ~70% validator support, followed by Paxos (~17%). Beyond Hyperliquid, the outcome could set a precedent for protocol-aligned, yield-bearing stablecoins that challenge centralized issuers like USDC and mark a shift in who captures stablecoin yields.

Ethena Powers Ahead

Ethena Labs strengthened its position as a DeFi powerhouse this week through a series of moves underscoring its multi-layered value accrual strategy. The highlight was Binance’s listing of USDe on Sept 9, which pushed supply above $13B and paved the way for Ethena’s long-awaited fee switch, potentially unlocking up to $500M in ENA buybacks from protocol revenues and reinforcing its hedged-yield flywheel. Momentum continued as StablecoinX raised another $530M, bringing total PIPE financing to $895M and targeting over 3B ENA. The raise funds a $310M buyback over 6–8 weeks, which, together with the first PIPE, brings nearly 20% of supply under StablecoinX’s treasury strategy, tightening alignment while expanding institutional access. Meanwhile, Mega Matrix filed a $2B shelf registration to purchase ENA, and Ethena deepened its reach with MegaETH’s launch of USDm, a native stablecoin built on Ethena’s stack and backed initially by BlackRock’s BUIDL tokenized Treasuries via Securitize. Finally, Ethena joined and then withdrew from the Hyperliquid USDH race, keeping focus on its core primitives. Collectively, these moves elevate Ethena to the third-largest dollar issuer in crypto and showcase how protocol-aligned stablecoins can shift yield back to communities, deepen institutional integration, and challenge centralized models.

Aave on Linea Grows 73x in 6 Weeks

Aave’s deployment on Linea has seen explosive traction, surging from $26M TVL in early August to $739M by Sept 1, and further to $1.91B by Sept 11—a 73x increase fueled by the new Linea Ignition program. Launched publicly on Sept 2 after a private beta, this 10-week initiative distributes 1B LINEA tokens from the ecosystem fund to drive DeFi adoption, with rewards funneled to major protocols like Aave, Euler, and Etherex. For Aave specifically, incentives target all WETH, USDC, and USDT lending pools on Aave V3. Rewards factor in time-weighted TVL shares and add adaptive boosts to under-utilized pools, ensuring steady inflows and balanced liquidity. This rapid uptake highlights Linea’s growing importance in Aave’s multi-chain strategy. With the program pushing Aave’s Linea deployment past the billion-dollar mark, it has also helped propel Aave’s total market size to nearly $70B, almost doubling in the past three months.

LINEA $200M+ Airdrop Goes Live

Staying on Linea, the highly anticipated LINEA token generation event and airdrop went live on September 10, distributing 9.36 billion tokens to 749,663 eligible wallets based on LXP (onchain activity) and LXP-L (liquidity participation). By September 12, more than 520,000 wallets had claimed over 82% of the airdrop supply—around 7.7 billion LINEA—representing roughly $180 million claimed out of a total $218 million at current prices. Distribution has been broad and concentrated in the middle tiers, with half of the supply now held by roughly 59,000 wallets, while the top 100 addresses account for just under 11%. The claim window remains open until December 9, after which unclaimed tokens will return to the Linea Consortium’s Ecosystem Fund. Beyond immediate price action, the launch of LINEA stands as one of the most significant L2 token events since OP and ARB, with Linea positioning the token as “silver to ETH’s gold” and a critical instrument to scale Ethereum into its second decade.

Morpho Hits $12B Deposits, World Chain Drives Users Growth

Morpho crossed a new milestone this week, surpassing $12B in deposits with top three chains being Ethereum (62% ), Base (22%), and HyperEVM (5% ), and a rapidly growing share on Arbitrum, where deposits surged 3,000% in the past 30 days thanks to the Drip campaign. User adoption has been explosive on World Chain, where Morpho launched its Mini App in April: the chain now counts 419K users, making up the majority of Morpho’s 739K total users, with 125K weekly actives compared to 13K on Base, the second-largest. Meanwhile, curation fees hit an all-time high of $370K in the first week of September, underscoring the growing role of vault curation in balancing borrower demand, depositor yields, and risk management. Morpho’s integration as a Mini App in the World ecosystem has made it seamlessly accessible to a growing base of verified humans and high-quality users, turning distribution into a structural advantage.

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Always do your own research.

Dune Digest is all about cutting through the noise and surfacing the most relevant onchain trends. If you have insights, dashboards, or data-driven stories that belong in the Digest, drop your suggestions here.

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Dune Team

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