Hyperliquid Community Debates Game-Changing 45% Supply Burn Proposal

Hyperliquid's community just dropped a bombshell proposal that could reshape its entire economic model.

The 45% Question

Token holders are debating whether to incinerate nearly half the total supply—a move that would instantly boost scarcity while potentially triggering massive price volatility. The proposal comes as DeFi protocols increasingly turn to radical tokenomics to stand out in a crowded market.

Supply Shock Mechanics

Burning 45% of circulating tokens would create immediate artificial scarcity, potentially driving up value for remaining holders. But the community remains divided on whether this constitutes genuine utility creation or just financial engineering dressed up as innovation.

Because sometimes the best way to increase value is to make something disappear—a trick Wall Street bankers have perfected for decades, just with different assets.

Breaking down the proposal

The proposed changes involve canceling over 421 million unminted FECR tokens, burning 31.3 million AF tokens, and removing the 1 billion cap. As a result, the supply will significantly decrease. However, there will still be room for controlled issuance to meet future demands. Authors claim that this adjustment addresses Fully Diluted Valuation (FDV) inconsistencies that tend to deter potential buyers.

Hyperliquid’s FDV currently sits at $49 billion at present price, which also includes valuation of locked allocation. Given that those locked tokens are not in the market, the protocol’s actual valuation plummets to $16 billion. 

The proposal has gained significant buzz within the crypto community, with some giving support while some criticizing. Alpen from Comfy Capital backed the move, saying it “provides more clarity” and “fixes a broken FDV metric that is incorrect.” However, not everyone agrees. 

However, another X user argued that every $1 set on fire is $1 less for liquidity depth, spreads, BD, R&D, product expansion. “I just don’t get how burning money helps a business.” He stressed.

Token utility and fee mechanics

Hyperliquid’s HyperCore platform adds context to these changes. Nearly all trading fees, whether from perpetuals or spot markets, FLOW into buybacks or token burns. Moreover, HyperEVM charges transaction fees in HYPE, which are fully burned. The system is already focused on cutting down supply and boosting the long-term value of tokens.

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