Hyperliquid evaluates 45% cut in HYPE offer

• Plan foresees burning of 450 million HYPE tokens
• Measure seeks to reduce the impact of the release of US$12 billion
• Discussion includes ending the fixed limit of 1 billion

Hyperliquid, a decentralized exchange platform, is considering a proposal that could redefine the tokenomics of its native token, HYPE. The plan, presented on September 22 by DBA manager Jon Charbonneau and researcher Hasu, proposes a 45% reduction in the total supply.

According to the authors, the current configuration distorts valuation metrics and leaves the protocol at a disadvantage compared to competitors. They stated that "given HYPE's current supply dynamics, it is one of the most unfairly penalized tokens in the market today."

The proposal comes amid concerns about unlocking $12 billion in HYPE, which could further pressure the market. To address the risk, the plan suggests profound changes, including the burning of unused tokens and adjustments to the issuance policy.

At the heart of the proposal is the elimination of over 450 million tokens earmarked for Future Emissions and Community Rewards (FECR) and the Assistance Fund (AF). This includes 421 million reserved for rewards and 31 million for support. Charbonneau and Hasu argue that this reserve creates negative expectations about future distribution, penalizing the token.

They explained:

“Hyperliquid currently has a large amount of non-outstanding authorized supply… This is problematic because the market penalizes this excess supply when valuing the protocol.”

The burn, according to them, would allow the balance sheet to be cleaned up and capital to be allocated more efficiently.

Another controversial point of the proposal is the end of the fixed limit of one billion HYPE. The authors argue that this limit is a cultural legacy inspired by Bitcoin, but that it does not practically apply to blockchains like Ethereum and Solana, which operate with issuance policies adjustable by community consensus.

"If, many years later, the FECR had been exhausted, but there were value-accretive opportunities that required additional HYPE issuance, the community would likely be all for it. There's no religious connection to an arbitrary supply cap here."

, they concluded.

The proposal is still under debate, but it is already mobilizing the Hyperliquid community around changes that could reduce market pressure and redefine the trajectory of the HYPE token.