The HYPE token supply cut proposal would revoke 421 million future-emission HYPE and burn 21 million from the Assistance Fund, reducing total HYPE supply by ~45% to improve token valuation and staking incentives for Hyperliquid investors and governance.
Proposal cuts ~45% of HYPE supply to improve token valuation
Revokes future emissions/community rewards and burns Assistance Fund HYPE
Targets 421M HYPE from FECR and 21M HYPE from AF; aims to preserve issuance ability
HYPE token supply cut: 45% reduction proposed to improve valuation and staking appeal — read details and vote implications on Hyperliquid governance.
DBA Asset Management has proposed slashing HYPE’s future emissions and burning Assistance Fund tokens, cutting total HYPE supply by 45% to address fully diluted valuation distortions and boost investor confidence.
What is the HYPE token supply cut proposal?
The HYPE token supply cut proposal seeks to revoke authorization for unminted HYPE allocated to future emissions and community rewards (FECR), burn HYPE held in Hyperliquid’s Assistance Fund (AF), and remove the 1 billion supply cap. The plan aims to reduce total HYPE supply by about 45% to make HYPE easier to value.
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How would the proposal change Hyperliquid’s tokenomics?
The proposal would: (1) rescind issuance rights for 421 million HYPE assigned to FECR; (2) burn 21 million HYPE from the Assistance Fund; and (3) eliminate the 1 billion cap to allow controlled future issuance if governance approves.
DBA Asset Management investment manager Jon Charbonneau authored the proposal on X, co-signed by researcher Hasu. DBA is a material HYPE holder and active staker, so its vote would carry weight in governance.
Source: Jon Charbonneau
Why does DBA say this change is needed?
Charbonneau argues the market undervalues Hyperliquid because fully diluted valuation (FDV) includes unissued tokens, which penalizes the protocol’s price discovery. Removing large pre-allocated pools reduces FDV distortion and may attract investors and stakers by making per-token value clearer.
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Institutional voices such as Dragonfly’s Haseeb Qureshi supported curbing the nearly 50% community allocation, calling it an “amorphous slush fund” that should be restructured. Critics, including crypto commentator Mister Todd, warned that removing future emissions could impair growth incentives.
Some analysts caution keeping reserves for sanctions or fines, but DBA says accounting changes retain emergency resources through alternative mechanisms rather than leaving the protocol exposed.
Hyperliquid’s new USDH stablecoin is expected to drive fee revenue as it rolls out. Charbonneau noted USDH will contribute materially to platform revenue, which could offset reduced emission-driven incentives by improving native revenue streams.
No. The proposal revokes current authorizations for unminted tokens but removes the hard cap to allow governance to approve targeted future issuances when needed. This preserves funding flexibility while eliminating pre-allocated excess.
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