The Hyper Foundation has proposed treating all HYPE held in its Hyperliquid Assistance Fund as permanently burned, removing the tokens from supply via validator vote.
Summary
- Hyper Foundation proposed a validator vote to treat all HYPE in the Assistance Fund as permanently burned.
- The tokens are already locked in a system address with no private key, requiring no onchain action.
- The vote runs through Dec. 24 and could remove over 10% of HYPE from circulating and total supply.
A governance proposal released by the Hyper Foundation would exclude all HYPE held in the Hyperliquid Assistance Fund from circulating supply, pending validator approval.
The proposal was published on Dec. 17 through the Hyper Foundation’s official channels and governance forum.
Assistance Fund tokens treated as burned
Under the proposal, validators are asked to recognize the Hyperliquid (HYPE) tokens accumulated in the Assistance Fund as permanently burned, despite no onchain transaction taking place. The tokens already sit in a system address that has never been controlled by a private key, making them inaccessible without a protocol-level intervention.
The Assistance Fund converts the protocol’s trading fees to HYPE through an automated process embedded in Hyperliquid’s L1 execution layer. Those tokens accumulate in a public address address, which has no private key and functions similarly to a burn address in practice.
A “Yes” vote would establish a binding social consensus that the protocol will never authorize an upgrade to access those funds. The Foundation said no technical changes are required, as the tokens are already mathematically irretrievable.
Community estimates place the Assistance Fund’s balance at roughly 37 million HYPE, representing more than 10% of circulating supply. If formally removed, the tokens would also be excluded from total supply calculations.
Validator vote and timing
The decision will be made through a stake-weighted validator process. Validators are required to signal their intent on the governance forum by Dec. 21 at 04:00 UTC. Token holders can then delegate stake to validators aligned with their position through Dec. 24 at 04:00 UTC, when the final outcome will be determined.
If approved, the change would lock in a more restrictive supply model by preventing any future use of the Assistance Fund balance for grants, development, or emergency measures. The Foundation said the vote would determine whether the Assistance Fund balance is permanently excluded from supply calculations.
The vote follows earlier community discussions around supply reductions in 2025, including a September proposal that explored a 45% cut to total supply but did not advance.
In 2025, Hyperliquid ranked as the top onchain perpetuals venues by volume and fee revenue. A large share of those fees has continued to flow into the Assistance Fund through the protocol’s automated conversion process. That mechanism has been central to how HYPE supply dynamics have evolved over time.
