The governance measure excludes approximately $1 billion worth of tokens from circulating and total supply calculations.
Hyperliquid News
The Hyper Foundation has proposed a validator vote to recognize HYPE (HYPE) tokens in the protocol's Assistance Fund as permanently inaccessible. The governance measure excludes approximately $1 billion worth of tokens from circulating and total supply calculations.
The Assistance Fund operates as a protocol-level mechanism embedded in Hyperliquid's layer-1 execution layer. Trading fees automatically convert to Hyperliquid tokens and route to a designated system address without control mechanisms for withdrawal.
Validators who approve the measure agree to treat Assistance Fund holdings as burned tokens. The system address was designed without retrieval functionality, making funds irretrievable without a hard fork.
Native Markets, which issues the USDH (USDH) stablecoin on Hyperliquid, explained that 50% of reserve yield flows to the Assistance Fund. Those contributions convert to Hyperliquid and would receive formal recognition as burned if the vote passes.
The proposal clarifies supply metrics rather than reducing existing token quantities. Formalizing how fee-derived tokens are treated reduces ambiguity around Hyperliquid's effective supply for governance purposes.
Cantor Fitzgerald research characterized Hyperliquid as returning nearly all fee revenue to tokenholders through automated repurchases. The financial services firm estimated the protocol generated approximately $874 million in fees year-to-date.
Roughly 99% of protocol fees route through the Assistance Fund mechanism to repurchase Hyperliquid, according to Cantor's analysis. The company described repurchases as contributing to declining circulating supply.
Hyperliquid ranks third among perpetual DEX platforms with over $205 billion in trading volume during the past 30 days. Digital asset treasury companies Hyperion DeFi and Hyperliquid Strategies hold approximately $46 million and $340 million in Hyperliquid, respectively.
The validator vote aims to align supply metrics with protocol design rather than creating scarcity retroactively. The distinction matters as institutional attention toward Hyperliquid's fee-driven model intensifies.
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