The Hyper Foundation has proposed a validator vote to declare HYPE tokens in the Hyperliquid Assistance Fund as permanently inaccessible, effectively treating them as burned to clarify the token’s circulating supply. This move addresses growing institutional interest by aligning supply metrics with the protocol’s design, excluding about $1 billion in tokens from total supply calculations.
Hyperliquid’s Assistance Fund automatically converts trading fees into HYPE tokens routed to an irretrievable system address.
The proposal seeks binding consensus to exclude these funds from circulating and total supply without altering existing tokens.
DefiLlama reports over $205 billion in perpetuals trading volume in the last 30 days, with 99% of fees repurchased as HYPE per Cantor Fitzgerald estimates for 2025 YTD.
Discover the Hyperliquid Assistance Fund vote proposal: How it impacts HYPE supply and institutional adoption. Learn key details on token burns and protocol mechanics today.
What is the Hyperliquid Assistance Fund Vote Proposal?
The Hyperliquid Assistance Fund vote proposal is an initiative by the Hyper Foundation to gain formal validator consensus on treating HYPE tokens held in the protocol’s Assistance Fund as permanently burned and excluded from the asset’s circulating and total supply. This addresses the fund’s design, where trading fees are automatically converted into HYPE and sent to a system address without retrieval mechanisms, currently holding about $1 billion in tokens. The vote ensures transparency amid rising institutional scrutiny without requiring a hard fork or altering existing supply.
How Does the Hyperliquid Assistance Fund Mechanism Operate?
The Assistance Fund serves as a core protocol-level feature in Hyperliquid’s layer-1 network, automating the conversion of trading fees into HYPE tokens that are then directed to a designated system address. This address lacks any control features, rendering the funds irretrievable by design to support long-term protocol sustainability. According to the Hyper Foundation, a “Yes” vote from validators would bind the community to recognize these tokens as burned, preventing future access even through upgrades.
Native Markets, issuer of the Hyperliquid-native stablecoin USDH, has noted that 50% of USDH’s reserve yield flows into this fund and converts to HYPE. If the vote passes, these contributions would be officially deemed burned, enhancing clarity for users and investors. This mechanism has generated significant value, with Cantor Fitzgerald estimating $874 million in protocol fees year-to-date in 2025, 99% of which funnels through the Assistance Fund for HYPE repurchases.
Source: Hyper Foundation
While the term “burned” is used, the proposal does not technically reduce the token supply but formalizes the treatment of these fee-derived assets for governance and reporting purposes. This distinction is crucial as Hyperliquid’s fee-driven model draws attention from financial institutions seeking predictable revenue streams in decentralized finance.
Cantor Fitzgerald’s research on digital asset treasuries highlights Hyperliquid’s approach of returning nearly all fees to tokenholders via automated repurchases, positioning it as a leader in perpetual decentralized exchanges. The proposal thus aligns supply metrics with the protocol’s original intent, avoiding retroactive scarcity claims and fostering trust among stakeholders.
Frequently Asked Questions
What Happens If the Hyperliquid Assistance Fund Vote Passes?
If the vote passes, validators commit to a binding social consensus that the HYPE tokens in the Assistance Fund—valued at around $1 billion—will never be accessed, effectively removing them from circulating and total supply calculations. This provides definitive clarity on Hyperliquid’s token economics without impacting existing holdings or requiring protocol changes.
Why Is the Hyperliquid Assistance Fund Important for HYPE Token Holders?
The Assistance Fund is vital for HYPE holders because it captures a substantial portion of protocol revenue, with over 99% of fees repurchased as tokens and held inaccessibly, supporting value accrual. As Hyperliquid processes billions in trading volume monthly, this mechanism ensures fees benefit the ecosystem long-term, appealing to institutional investors monitoring supply dynamics.
Key Takeaways
- Protocol Clarity: The vote formalizes the Assistance Fund’s HYPE tokens as burned, excluding them from supply metrics to reduce ambiguity.
- Institutional Appeal: Hyperliquid’s $874 million in 2025 YTD fees, per Cantor Fitzgerald, underscore its revenue model attracting digital asset treasuries like Hyperion DeFi and Hyperliquid Strategies.
- Trading Dominance: With $205 billion in 30-day perpetuals volume via DefiLlama, the protocol ranks third among DEXs, emphasizing the fund’s role in ecosystem growth.
Conclusion
The Hyperliquid Assistance Fund vote proposal represents a pivotal step in refining HYPE token supply transparency and reinforcing the protocol’s commitment to its core design principles. By securing validator agreement to treat fund-held tokens as permanently inaccessible, Hyperliquid addresses key concerns for institutional adoption while maintaining its position as a top perpetuals DEX. As the ecosystem evolves with growing trading volumes and treasury integrations, this initiative paves the way for sustained confidence among investors—stay informed on upcoming developments to navigate the dynamic crypto landscape effectively.