Halo, a new initiative on the Hyperliquid ecosystem, just dropped a major announcement on X that’s creating waves in the DeFi space. On April 23, 2025, Halo (@halo_usd) introduced HUSD—a treasury-backed stablecoin designed to address a critical gap in Hyperliquid’s infrastructure: the lack of a native tokenized dollar. Let’s break down what this means, why it matters, and how it could shape the future of Hyperliquid.

What’s the Big Deal with HUSD?

Hyperliquid has been a powerhouse in onchain finance, especially for order book trading. With over $1 trillion in trading volume in the past year and tens of thousands of daily active users, it’s a go-to platform for traders. The recent launch of HyperEVM even lets users stick around for DeFi applications without hopping to other networks. But there’s a catch—Hyperliquid has been missing its own stablecoin.

Right now, Hyperliquid relies on bridged USDC for its HyperCore order books and has none for HyperEVM. This setup forces users to deal with smart contract risks at the bridge level (via Arbitrum) and misses out on yield-sharing from USDC’s issuer, Circle. Halo’s HUSD aims to fix this by offering a native stablecoin that’s seamlessly integrated into both HyperCore and HyperEVM.

HUSD isn’t just another stablecoin—it’s built for transparency and community benefit. Backed by treasuries, its collateral will be visible down to individual International Securities Identification Numbers (ISINs), with daily attestations. This level of openness is a big step up from many existing stablecoins. Plus, Halo is partnering with M0, a universal stablecoin platform, to ensure HUSD is secure, programmable, and interoperable across networks.

Why Hyperliquid Needs a Native Stablecoin

Stablecoins are the backbone of DeFi. They act as a base asset for liquidity, a unit of account for lending and borrowing, and a foundation for derivatives. Without a native stablecoin, Hyperliquid users are stuck with bridged USDC, which comes with risks like smart contract vulnerabilities at the bridge level. On top of that, Circle keeps the yield from the $2.5 billion in treasuries backing USDC—none of which benefits Hyperliquid’s ecosystem. This has put a cap on how much capital users are willing to deploy, slowing the growth of HyperEVM in particular.

HUSD changes the game by removing these bottlenecks. Users can mint or redeem HUSD with its underlying collateral through Halo’s service provider, MXON, making it a safer and more efficient option. Since HUSD is an extension of M0’s $M stablecoin, it also benefits from shared liquidity across other M0-based stablecoins, similar to Noble’s USDN, while still allowing Hyperliquid to customize and keep the yield for its own community.

How Halo Plans to Empower the Hyperliquid Community

What sets Halo apart is its focus on giving back to the Hyperliquid ecosystem. Unlike traditional stablecoin issuers that pocket all the revenue from trading fees and collateral yield, Halo will redistribute most of it to the community. This includes users, interface hosts, app builders, and HYPE stakers who help onboard liquidity and users to Hyperliquid. Halo sees every non-aligned dollar on the platform as a missed opportunity—and HUSD is their way of taking it back.

Halo has big plans for HUSD’s integration:

• Perpetual Futures Collateral: Imagine using HUSD as margin for perpetual futures trading on Hyperliquid. This idea got some buzz in the thread, with user @CryptoMtnDrew suggesting it could be a game-changer, even if the collateral ratio is lower than USDC’s.

• Spot Order Book Quote Asset: HUSD could become a go-to asset for spot trading pairs.
• FX Coverage Beyond USD: Expanding to other fiat currencies for broader appeal.
• Community Ownership: Halo wants the community to own and drive its growth.
• Builder Incentives: A “code rebate flywheel” to reward developers building on Hyperliquid.

In short, Halo aims to make HUSD the hub for tokenized fiat on Hyperliquid, streamlining trading and DeFi activities while keeping the ecosystem’s profits in the community’s hands.

The Tech Behind HUSD

HUSD is built on M0’s platform, which powers safe and interoperable stablecoins. Each HUSD unit on Hyperliquid has a corresponding $M unit locked on Ethereum mainnet, using Hyperlane for message passing. This setup is similar to the USDT0 initiative by Tether and LayerZero, ensuring security and liquidity without sacrificing Hyperliquid’s control over its stablecoin.

The transparency is a standout feature. Halo promises daily attestations of HUSD’s collateral, down to specific tokens like Superstate’s USTB. This level of detail builds trust, especially in a space where stablecoin backing can sometimes feel like a black box.

What’s Next for Halo and HUSD?

Halo teased more details in the coming weeks, including articles on HUSD’s implementation and why Hyperliquid is a perfect fit for stablecoin innovation. The initiative, led by @fiege_max, @felixprotocol, and Liquity contributors, is all about community engagement. They’ll share updates through their X profile (no Discord or Telegram for now).

The thread got a warm reception from the Hyperliquid community. Users like @0xOmnia and @neko_hl showed excitement, with comments like “just put the HUSD in the orderbooks” and “HUSD coded.” Others, like @derteil00, shared memes to celebrate the launch.

Why This Matters for DeFi

HUSD could be a turning point for Hyperliquid, especially as DeFi continues to grow. With HyperEVM’s mainnet launch opening doors for more applications, a native stablecoin like HUSD removes friction for users and developers alike. It’s a step toward making Hyperliquid a self-sustaining ecosystem where profits stay within the community, not siphoned off by external issuers.

For anyone following DeFi trends, Halo’s move is worth watching. It’s not just about a new stablecoin—it’s about redefining how ecosystems like Hyperliquid can thrive by aligning incentives and empowering their users. What do you think about HUSD’s potential? Let’s keep an eye on Halo’s next updates!