Key Highlights
- Hyper Foundation proposes to treat 37M HYPE in Assistance Fund as permanently burned.
- Validators will vote by December 24 to formally exclude these tokens from circulating and total supply.
- Approval would officially reduce the Total Supply (currently 1B) and drastically lower the FDV (Fully Diluted Valuation) calculations.
The Hyper Foundation has initiated a governance proposal asking network validators formally “burn” the HYPE tokens held in the Hyperliquid Assistance Fund and remove them from both circulating and total supply figures.
The draft proposal was published on December 17, 2025, across the Foundation’s official channels and the Hyperliquid governance forum, marking a key moment in the project’s ongoing tokenomics debate.
Assistance fund tokens considered permanently burned
Under the plan, validators are asked to treat the roughly 37.1 million HYPE tokens accumulated in the Assistance Fund as irretrievable and effectively burned.
The Assistance Fund automatically converts a portion of protocol trading fees into HYPE. These tokens currently reside at a specific system address: 0xfefefefefefefefefefefefefefefefefefefefe.
Because this address does not have a private key, the tokens are already mathematically inaccessible. However, they are still counted in “Total Supply” figures. A “Yes” vote would create a binding social consensus that no future upgrade will unlock those funds.
The vote is scheduled through a stake‑weighted process: validators must signal their intent by 04:00 UTC on December 21, and token holders can then delegate their stake to aligned validators through 04:00 UTC on December 24, when the final result will be determined.
Removing these tokens from the supply metrics could significantly lower the project’s Fully Diluted Valuation (FDV), a move long requested by community members to attract institutional investors. This follows earlier 2025 discussions led by asset managers like Jon Charbonneau and Hasu, who advocated for slashing the HYPE supply by up to 45% to improve price discovery.
Why this matters to HYPE and the market
The Assistance Fund automatically converts part of the protocol’s trading fees into HYPE tokens as part of Hyperliquid’s Layer‑1 execution layer.
Those tokens have accumulated over time and now represent over 13% of the current circulating supply. Excluding them from supply figures could tighten the effective supply metrics used by traders and data providers.
At press time, HYPE was trading around $26–$27 per token, with a market capitalisation in the multi‑billion‑dollar range across major exchanges, data reflecting modest changes in recent sessions according to price feeds.
What’s next
If the proposal reaches the two-thirds majority required for quorum, the Assistance Fund HYPE will be officially removed from the circulating and total supply. This move is expected to signal a more “deflationary” shift for the Hyperliquid ecosystem as it moves toward its HyperEVM expansion in early 2026.
If validators approve the proposal later this week, the Assistance Fund HYPE will be officially excluded from circulating and total supply, even though the tokens are already locked by design.
Also Read: Hyperliquid Strategies Announces $30 Million Stock Buyback Program