Welcome back. 👋 Each week we cut through the noise and explain what’s driving crypto. This week brought momentum across stablecoins, regulation, network performance, and prices.

- Validator Digital

A steady rebound across crypto: Bitcoin is up, other major digital assets are broadly higher fueled by regulatory clarity signals and macro tailwinds.

Hyperliquid, a top crypto trading platform, recently made a move that has the whole industry talking. Instead of continuing to use Circle’s stablecoin, a type of cryptocurrency designed to hold a stable value, like the US dollar, the platform launched an unprecedented seven-day competition.

The prize? The right to manage Hyperliquid's new native stablecoin, USDH, and control a massive stream of revenue.

This sparked a fierce competition among some of crypto’s biggest names and up-and-coming innovators. All were vying for a partnership that would give them a foothold in Hyperliquid’s multi-billion-dollar ecosystem. The battle was intense, with companies like Paxos (details on their offering below in Quick Hits) and Ethena putting forward huge proposals with promises of billions in incentives and high revenue sharing.

After a week of on-chain voting by Hyperliquid’s validators, the technical operators who secure the network, the decision has been made. The winner is Native Markets, a team with deep connections to the Hyperliquid community.

Their winning proposal was centered not just on financial incentives but on a vision of a truly "Hyperliquid-first" stablecoin, built from the ground up to integrate seamlessly with the platform. This wasn't just a simple business deal; it was a major governance test for Hyperliquid, demonstrating the power of its community to make a decentralized, high-stakes decision.

This outcome is a big deal for Hyperliquid and the wider market.

For Hyperliquid, it means the platform can now launch its own stablecoin and capture the value that was previously going to other stablecoin issuers like Circle. This will strengthen the Hyperliquid economy and give the community more control over its future.

For stablecoin issuers, it shows that the power relies on the party that has access to users - in this case the Layer 1 blockchain, NOT the stablecoin issuers. This is a potential early sign that stablecoin issuers could become commoditized in the future.

For the broader crypto market, this event showcases a new model for how decentralized platforms can govern themselves and create strategic partnerships. This could set a precedent for other protocols, moving away from closed-door deals and towards transparent, community-driven decisions that could reshape how the entire industry operates.

Bitcoin’s volatility has compressed to multi-year lows, now sitting closer to traditional assets like gold and equities—a big shift from its wild early years (closer, but still not the same). History shows these calm periods rarely last, often acting as the “calm before the storm.” This week’s video has a clear breakdown of the data and why the next big move could be right around the corner.

If a block is like a page in the record book, then the chain is what ties all the pages together. Each new page doesn’t just hold fresh transactions — it also carries a unique code that comes from the page before it.

Because of that link, the pages form a chain. If someone tried to go back and change an old page — for example, to erase money they spent or give themselves extra — the code on every page after it would no longer match. The copies of the book that everyone else has would look different from the altered one.

And here’s the key: there aren’t just a few copies — there are millions, all over the world. If one person tries to sneak in a change, the network immediately rejects it because it doesn’t match everyone else’s copies. The history isn’t just written down, it’s locked together and constantly cross-checked by the crowd.

Last Week in 101: What is a Block?

Next Week in 101: Who Keeps the Chain Honest?

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See you next week,

Don’t speculate, validate.
- Validator Digital

Disclaimer: Individuals have unique circumstances, goals, and risk tolerances, so you should consult a certified investment professional and/or do your own diligence before making investment decisions. The author is not an investment advisor and may hold positions in the assets covered. Certified professionals can provide individualized investment advice tailored to your unique situation. This newsletter is for general educational purposes only, is not individualized, and as such should not be construed as investment advice.