Edgen Crypto·Sep 18 2025, 18:31Hyperliquid concluded its first major governance vote, selecting Native Markets to issue its USDH stablecoin, while the US Senate unveiled a comprehensive digital asset regulatory framework, and the crypto ecosystem grappled with significant security breaches.
Hyperliquid finalized its inaugural major governance vote, electing Native Markets to issue its native USDH stablecoin. Simultaneously, the U.S. Senate advanced a comprehensive regulatory framework for digital assets, while the broader cryptocurrency sector contended with two significant security exploits impacting a decentralized finance platform and the software supply chain.
Hyperliquid, a decentralized perpetuals exchange, concluded its first major on-chain governance vote beyond routine asset listings, selecting Native Markets to issue its native USDH stablecoin. Native Markets secured approximately 70% support from Hyperliquid validators and staked HYPE token holders during the week-long voting process. The decision aims to reduce Hyperliquid's reliance on external assets, particularly USDC, which currently accounts for a dominant ~$6 billion on-chain volume on the network. Established competitors, including Paxos, BitGo, Frax, and Ethena, either withdrew their bids or were outperformed by Native Markets.
The USDH stablecoin will be fully backed by cash and short-term U.S. Treasuries. BlackRock and Superstate are slated to manage the off-chain reserves, ensuring yield generation and security. On-chain custody and regulatory compliance, including adherence to the GENIUS Act and global standards like MiCA, will be handled by Bridge (Stripe-owned). Native Markets has proposed an aggressive yield-sharing model, committing 50% of the stablecoin reserve yields towards HYPE token buybacks via the Hyperliquid Assistance Fund and the remaining 50% for USDH distribution through strategic partnerships. This strategic move is intended to redirect economic value from external stablecoin providers to the Hyperliquid ecosystem and its token holders.
On September 5, 2025, the U.S. Senate Banking Committee released a 182-page discussion draft of the Responsible Financial Innovation Act (RFIA) of 2025. The proposed legislation outlines a comprehensive market structure for digital assets and includes provisions to combat illicit finance. Under the draft, digital asset service providers would be classified as financial institutions for purposes of the Bank Secrecy Act, subjecting them to laws related to economic sanctions, anti-money laundering (AML), customer identification, and due diligence.
The RFIA draft mandates the SEC to establish "Regulation Crypto" rules, providing exemptions for certain offers or sales of ancillary assets if they do not exceed $75 million or 10% of total outstanding ancillary assets. It also establishes a safe harbor for non-fungible tokens (NFTs), stipulating that an NFT transaction would not be deemed a security offering unless it contains all elements of an investment contract, with exceptions for mass-minted items or fractionalized interests. Furthermore, software developers providing technical assistance to distributed ledger systems or decentralized finance (DeFi) trading protocols would be exempt from the RFIA. The bill also promotes regulatory innovation by proposing a "CFTC-SEC Micro-Innovation Sandbox" for testing financial products and requires a joint study on the regulatory treatment of tokenized real-world assets within 360 days of enactment.
The crypto ecosystem recently experienced two notable security breaches. SwissBorg's SOL Earn wallet suffered an exploit resulting in the theft of approximately 192,600 SOL, valued at $41.5 million. The incident stemmed from a compromised application programming interface (API) of a third-party partner, not an internal breach of SwissBorg's platform. The loss impacted less than 1% of SwissBorg users and represented about 2% of the company's total assets. SwissBorg has committed to covering all user losses and is actively pursuing recovery efforts with white-hat hackers and law enforcement.
In parallel, a widespread npm supply chain attack occurred on September 8, 2025. Attackers leveraged a phishing campaign to compromise maintainer accounts for npm, the widely used Node Package Manager. Malicious code was subsequently injected into 18 popular JavaScript packages, including 'chalk' and 'debug,' downloaded over 2 billion times. This malware was designed to intercept browser APIs and redirect crypto transactions in real-time, posing a significant threat to wallet users and dApp frontends. This incident underscores the vulnerability of centralized trust models and third-party dependencies in the broader software supply chain, affecting Web3 applications.
Solana has emerged as a revenue leader in the blockchain sector, reporting an annual revenue of $1.25 billion, which is approximately 2.5 times higher than Ethereum's $523 million. This performance signals robust demand for Solana's block space. Application-level revenue surged by over $210 million in the last 30 days, with key contributors such as Pump.fun and Axiom Pro generating approximately $53 million and $51 million, respectively. The blockchain's base layer also contributed $4.56 million in on-chain fees during the same period.
The Hyperliquid USDH vote signifies a strategic shift within the decentralized exchange landscape, as protocols seek to internalize economic value by launching native stablecoins. This trend could reduce the market dominance of established external stablecoin issuers like Circle's USDC and redistribute yield to native token holders, potentially fostering greater decentralization in stablecoin markets.
U.S. regulatory developments, particularly the RFIA draft, indicate a move towards a more structured and compliant digital asset market. The proposed inclusion of digital asset service providers under the Bank Secrecy Act suggests increased scrutiny on anti-money laundering and illicit finance prevention. While fostering innovation through sandboxes and NFT safe harbors, the legislation simultaneously imposes stricter compliance requirements that could reshape operational models for crypto businesses in the United States.
Ongoing security incidents, such as the SwissBorg exploit and the npm supply chain attack, highlight persistent vulnerabilities across the crypto and software supply chain. These breaches can erode investor confidence and underscore the critical need for enhanced security measures, robust auditing, and decentralized trust mechanisms to mitigate risks to user funds and the integrity of decentralized applications. These events may drive demand for more secure infrastructure and hardware wallet solutions.
Solana's demonstrated financial performance, with significantly higher annual revenue than Ethereum, reflects a growing and active application ecosystem. This indicates strong competition among Layer 1 blockchains for block space demand and economic value generation, potentially influencing developer and user migration across different networks.
The Hyperliquid governance vote marks a maturation of decentralized autonomous organization (DAO) decision-making within the DeFi sector, establishing precedents for how protocols manage critical infrastructure like stablecoins. This development could inspire similar initiatives across other decentralized platforms seeking greater self-sufficiency.
Legislative efforts like the RFIA draft represent an ongoing, multi-faceted attempt by U.S. lawmakers to bring regulatory clarity to the digital asset space. The proposed framework seeks to balance innovation with consumer protection and financial stability, reflecting a global trend towards defining the legal and operational boundaries for cryptocurrencies and blockchain technology. The interplay between various legislative proposals and regulatory bodies (SEC, CFTC) will shape the future landscape of crypto regulation in the United States.
The recent security breaches are part of a broader pattern of rising crypto thefts, with figures indicating over $2.17 billion already stolen in 2025. This persistent threat environment necessitates continuous evolution in cybersecurity practices within both the crypto industry and the wider technology sector supporting Web3. The npm attack, in particular, illustrates how vulnerabilities in traditional software supply chains can directly impact the security of decentralized applications.
The robust growth observed in ecosystems like Solana, alongside institutional interest and ongoing innovation, contrasts with the challenges posed by regulatory uncertainty and security risks. This dynamic environment suggests a sector undergoing rapid development, characterized by both significant opportunities for expansion and inherent operational complexities that demand continuous adaptation from market participants and regulators.
