👨🔬 Governance Lab #111
Lab Report #111 - USDH Proposals at Hyperliquid, Ronin’s OP Stack Migration, Aave’s MetaMask mUSD Listing, and more
gm frens 👋
Welcome back to the Governance Lab, your weekly source for all things StableLab, DeFi, and DAO Governance.
At a Glance 👀
💵 Hyperliquid stablecoin competition intensifies as Sky, Ethena, and others submit proposals to power USDH
🔴 Ronin validators approve migration to Ethereum L2 with Optimism’s OP Stack and milestone-based grants
🦊 Aave discusses adding MetaMask’s new mUSD stablecoin to Aave V3 on Ethereum and Linea
Let’s dive in 🏊
USDH
Hyperliquid prepares for high-stakes vote on native USDH stablecoin
Hyperliquid is moving ahead with governance on its long-awaited native stablecoin, USDH. Validators will cast an on-chain, stake-weighted vote starting September 14 to decide which issuer gets the reserved USDH ticker. The aim is to replace today’s USDC-heavy base with a Hyperliquid-aligned stablecoin that keeps reserve income inside the ecosystem.
Two frontrunners are Sky and Ethena. Sky proposes USDH as a Sky-issued stablecoin, modeled on DAI and USDS. It offers a 4.85 percent return on USDH held on Hyperliquid routed to HYPE buybacks, instant 2.2 billion USDC redemption through its Peg Stability Module, LayerZero multichain support, and a 25 million Hyperliquid Genesis Star to seed DeFi growth. Sky also plans to migrate its buyback engine to Hyperliquid and suggests a path to future GENIUS compliance.
Ethena would launch USDH fully backed by USDtb via Anchorage Digital Bank, committing at least 95 percent of net reserve yield toward HYPE buybacks, the Assistance Fund, and validator rewards. It also pledges to cover migration costs from USDC to USDH and earmark 75 to 150 million in incentives for HIP-3 markets and front-ends. Ethena’s design includes a validator guardian model for freeze and reissue in extreme cases and ties into the USDe stack, including a Hyperliquid-native hUSDe.
Other bidders include Agora, Paxos, Frax, Native Markets, Curve, Bastion, and OpenEden. Each has different approaches to compliance, reserves, and revenue. The result of this vote will decide if Hyperliquid can reclaim the hundreds of millions in annual yield that currently flow to external issuers and redirect it to the Assistance Fund, HYPE buybacks, and validator economics.
Ronin
Ronin validators approve migration to Ethereum as an Optimism-based L2
Ronin’s governing validators have approved a proposal to transition the network from a standalone sidechain to an Ethereum L2 using the Optimism OP Stack. The move, branded as “Ronin’s homecoming,” is designed to improve security, unlock new developer incentives, and position Ronin as Ethereum’s “gamification engine.”
The decision comes after a competitive RFP process in which several other teams — including Polygon, zkSync, and Arbitrum — submitted proposals to host Ronin’s migration. By selecting Optimism, Ronin aligns itself with the Superchain ecosystem and gains access to shared liquidity, incentives, and infrastructure.
With the migration approved, implementation will now move into a staged process. Over the coming months, Ronin will work with Optimism and partners to complete the OP Stack integration while keeping existing games, tokens, and applications running without disruption. Milestone-based grants worth $5–7 million in OP, ZKC, and EIGEN tokens will fund the transition, and Ronin builders will be eligible for allocations from the 850 million OP Retro Fund, alongside Superchain growth campaigns.
Once live as an L2, Ronin will remain closely tied to its gaming ecosystem while gaining direct alignment with Ethereum and the broader Superchain. RON will continue to serve as the network’s gas token, and users are not required to take any immediate action during the migration.
Aave DAO
Aave DAO considers adding MetaMask’s stablecoin mUSD to Aave V3
Aave governance is discussing whether to list MetaMask’s recently launched mUSD stablecoin on the Aave V3 Core deployments on Ethereum and Linea. The proposal, posted as an ARFC, would integrate mUSD as both a collateral and borrowable asset, pending standard risk reviews and community approval.
MetaMask introduced mUSD last month as a stablecoin designed to be natively embedded into its wallet ecosystem. Supporters of the proposal argue that Aave could benefit from exposure to MetaMask’s large user base, creating new onramps for liquidity and expanding stablecoin diversity on Aave.
If approved, risk service providers will publish parameter recommendations ahead of an on-chain vote. The move would mark one of the first major lending protocol integrations for mUSD, testing its traction in DeFi beyond the MetaMask environment.
Links
🚀 Launches, Deployments, Partnerships, and M&A
Spark joins as a Morpho Curator
SYND to launch token via Aerodrome
Redstone to acquire Credora
📑 Reads, Insights, and Reports
Decoupling Execution from Governance: a new way for developers to implement access control on day 1
TokenLogic: A Year of Service to the Aave DAO
katana x aragon: inside the vKAT armory
The 21Shares dYdX ETP: Beyond The Boundaries
🧗 Milestones & Updates
Arbitrum DAO - The Arbitrum Foundation Bi-annual Progress Update H1 2025
Arbitrum DAO - DRIP Campaign Tracking Dashboard Lending Protocols
Arbitrum DAO - DRIP Season 1 Launch Recap
Aave DAO - Horizon Weekly Highlights
Polygon DAO - Season 2 Grant Program Close-Out Framework
🔒 Security, Risk, & Hacks
ZachXBT submits application for Arbitrum Security Council
🗞️ Everything Else
Aave DAO - Deploy Aave v3 on Plasma
dYdX DAO - Simplifying Incentives: Ending Protocol Level Trading Rewards and Setting C to 0
Scroll DAO to pause governance
Superfluid DAO - Turn ETHx and USDCx into yield for the DAO
📺 Podcasts, Presentations, & Listens
Jihoz: Why Ronin is “coming home” to Ethereum on Bankless
Stefan George: Doubling down on payments on 11AM w/ Seed Club
Proposal Tracker™️
✅ VOTE APPROVED | ENS DAO - Adopt The SEAL Safe Harbor Agreement
Summary: This proposal would have ENS DAO adopt the SEAL Whitehat Safe Harbor Agreement, a legal framework that allows whitehats to intervene during active exploits to rescue funds with reduced legal risk. Under the agreement, rescued assets must be returned within 72 hours, and rescuers can earn capped bounties of up to $250,000. Adopting the agreement would align ENS with protocols like Uniswap, zkSync, Pendle, PancakeSwap, and Balancer that have already integrated the standard, giving ENS an emergency response mechanism for protocol security without requesting any DAO funds.
💬 DISCUSSION | Lido DAO - Transfer TRP to Lido Labs Foundation and Amend TRP Terms
Summary: This proposal seeks to transfer the Treasury Rebalancing Program (TRP) to the newly established Lido Labs Foundation and update its terms. The change is intended to streamline operations, improve oversight, and align the TRP with Lido’s evolving governance and risk management structures. Discussion is ongoing around how the amendments would affect future allocations and safeguards.
💬 DISCUSSION | Jupiter – Debit Card for Real-World Spending with Tiered Cashback
Summary: This proposal suggests launching a Jupiter-branded debit card that enables real-world spending with tiered cashback rewards in JLP, USDC, SOL, or BTC. The initiative aims to expand Jupiter’s utility beyond DeFi, offering users a direct on/off-ramp experience while reinforcing ecosystem engagement. Community input is being gathered on feasibility, costs, and potential adoption.
From the Lab
❲ Our Voting ❳
📆 September 5th → September 11th | 🗳️ Total Votes: 18
See our full vote history and detailed rationale HERE.
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