DBA Asset Management, a digital asset investment firm, has proposed a significant change: a 45% reduction in the total HYPE token supply.
HYPE is the native token of Hyperliquid, a decentralized platform focused on derivative trading.
$108.89M
Jon Charbonneau, an investment manager at DBA, unveiled the proposal on X (formerly Twitter) on September 22. The concept was developed in partnership with crypto researcher @hasufl. You can view the original announcement here.
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The plan centers on a three-pronged approach. First, all future allocations of unminted HYPE, designated for community incentives and emissions, would be canceled. Second, all HYPE tokens currently residing within the Hyperliquid Assistance Fund will be permanently burned. Finally, the existing 1 billion token supply cap would be lifted.
Specifically, this would eliminate roughly 421 million tokens from scheduled rewards and emissions, alongside approximately 21 million tokens from the assistance fund.
The proposal is subject to approval through Hyperliquid’s established governance mechanisms. However, DBA holds a substantial quantity of HYPE and is actively engaged in staking activities.
Charbonneau suggested that the market is currently underestimating HYPE’s true value due to concerns surrounding the potential future issuance of tokens. He argues that this can skew perceptions and result in suboptimal investment decisions.
By actively reducing the unallocated token supply, the proposal aims to enhance HYPE’s attractiveness to both investors and users. Importantly, the protocol would retain the capacity to create new tokens down the line, contingent upon community consensus.
Hyperliquid recently announced that team members will begin receiving monthly token distributions starting on November 29. For more details on the distribution amounts, you can read the comprehensive report here.