Hyperliquid Proposes $1B HYPE Token Burn Vote to Formalize Supply Reduction
Hyperliquid's foundation has initiated a validator vote to permanently remove nearly $1 billion worth of HYPE tokens from circulation. The proposal seeks formal recognition of tokens held in the protocol's Assistance Fund as burned, despite their existing technical inaccessibility.
The Assistance Fund operates as a built-in mechanism that converts trading fees into HYPE and sends them to an unspendable address. This structural burn has already removed 99% of protocol fees from supply, creating what Cantor Fitzgerald describes as 'one of the most tokenholder-friendly economic models in DeFi.'
A successful vote WOULD codify the burn in protocol governance, preventing future upgrades from accessing the funds. The move comes as institutional investors increasingly scrutinize tokenomics, with Hyperliquid's fee-redistribution mechanism drawing particular attention from treasury managers.
