Burning HYPE: A Radical Proposal to Fix Hyperliquid's Tokenomics

A proposal to burn 45% of HYPE supply is shaking up Hyperliquid, aiming to reduce FDV and attract institutional investors. Is it a game-changer or a gamble?

Burning HYPE: A Radical Proposal to Fix Hyperliquid's Tokenomics

Hyperliquid's native token, HYPE, is at the center of a heated debate. A radical proposal to burn a massive chunk of its supply is turning heads and sparking strong opinions. The goal? To make HYPE more attractive to big-money investors. Is this the right move, or is it a betrayal of the platform's roots?

The HYPE Supply Problem

The core of the issue lies in HYPE's tokenomics. While the circulating supply is around 339 million, the total supply sits near 1 billion, creating a significant gap between market cap and fully diluted valuation (FDV). This discrepancy, largely due to tokens allocated for future emissions and community rewards (FECR) and an Assistance Fund (AF), makes HYPE look overvalued to potential investors.

A Radical Solution: Burn, Baby, Burn!

Enter Jon Charbonneau and Hasu with a bold proposal: burn 45% of the total HYPE supply. This includes revoking authorization for 421 million FECR tokens, destroying the 31.26 million HYPE held by the AF, and removing the 1 billion supply cap. The rationale? A lower FDV makes HYPE appear less expensive and more appealing to institutional investors who often focus on FDV metrics.

Why the Radical Approach?

Charbonneau and Hasu argue that HYPE's current supply design is an accounting problem, not an economic one. Major data platforms calculate FDV differently, often leading to an inflated valuation for HYPE, regardless of repurchases or burns.

The Community Weighs In

The proposal has ignited a firestorm of debate. Supporters, like Dragonfly Capital's Haseeb Qureshi, argue that it challenges the crypto industry's outdated practice of reserving massive token allocations for the