Hyperliquid Pushes For Greater Transparency On Tokenomics

Hyperliquid submits a rare decision to its validators : to recognize as excluded from the supply the 37 million HYPE accumulated in its assistance fund, an address without a private key funded by trading fees. This governance vote, without on-chain action, could remove nearly one billion dollars from the circulating metrics. In a context where readability of economic data becomes central, the protocol plays a strategic card to clarify its tokenomics and strengthen its credibility.

A vote to lock $1 billion of HYPE ?

While many observers wonder if blockchain can avoid disaster, the Hyper Foundation in its latest proposal submitted to validators calls to formally recognize that HYPE tokens stored in the assistance fund are “definitely inaccessible” and should be considered “burned”.

“By voting yes, validators agree to treat HYPE from the assistance fund as burned”, the document reads. This system address, integrated at the core of the protocol, is not associated with any private key or control mechanism, making the funds it holds irreversibly locked, except in case of a hard fork, a scenario the foundation aims to prevent with this vote.

Today, this wallet contains about $1 billion worth of HYPE, derived from an automatic mechanism that converts trading fees generated on the network into tokens sent to this address.

The goal is not to technically reduce the supply through an active burn mechanism but to clarify how these tokens should be accounted for in the protocol’s official metrics, particularly for governance and economic analyses.

This social consensus aims to establish a common position on the permanent exclusion of these tokens from the circulating and total supply. To better understand what the assistance fund represents in Hyperliquid’s architecture, here are the main points to remember :

• The assistance fund is a protocol mechanism integrated into the execution layer of the Hyperliquid blockchain ;

• It is automatically funded by trading fees: these are converted into HYPE and transferred to a locked system address ;

• This address has no private key or administrative access, making the funds technically inaccessible ;

• To date, it contains about $1 billion worth of HYPE, a significant portion of the total supply ;

• The vote aims to formalize that these tokens can never be recovered or even counted in the token’s economic metrics.

Thus, this first phase of the vote is intended to strengthen the consistency between the technical reality of the protocol and how economic data is interpreted by the community, analysts, and market participants.

Hyperliquid : Between Controlled Supply Strategy and Institutional Attractiveness

Alongside this accounting clarification, the economic implications of the proposal are far from neutral.

According to Native Markets, issuer of the native USDH stablecoin, “50 % of the stablecoin reserve yield is directed towards the assistance fund and converted into HYPE”. If the vote is validated, these amounts will also be formally considered “burned”.

This dynamic mechanically reinforces the impression of a continuous decrease in the effective supply without resorting to an active burn mechanism. A strategy that attracts certain institutions. In an analysis note, Cantor Fitzgerald estimated that 99 % of the protocol’s fees are already redirected to this fund, contributing to “a gradual reduction of the circulating supply” of HYPE.

According to Cantor, two major entities hold significant amounts of HYPE: Hyperion DeFi (HYPD) with about $46 million, and Hyperliquid Strategies (PURR) with nearly $340 million in cash. Meanwhile, DefiLlama ranks Hyperliquid as the third-largest perpetual products DEX, with a volume of $205 billion over the last 30 days. So many on-chain data illustrating the protocol’s rise and the importance of clear governance in the eyes of potential partners.

This vote illustrates how DeFi seeks to reconcile accounting rigor and community governance. By deciding on the nature of these inaccessible funds, Hyperliquid sets a precedent that could inspire other protocols faced with dormant liabilities or opaque mechanisms.