Hyper Foundation proposes excluding about $1 billion worth of HYPE from circulation… pushes to burn Assistance Fund

The Hyper Foundation (Hyper Foundation) proposed a governance proposal to essentially burn the HYPE tokens held in the Assistance Fund (Assistance Fund) within the Hyperliquid (Hyperliquid) protocol, excluding them from circulation. If the proposal passes, approximately $1 billion worth of HYPE tokens would be removed from market circulation.

On the 17th (local time), The Block reported that the Hyper Foundation requested a vote via Discord the previous day on whether to officially consider the HYPE tokens deposited in the Assistance Fund as burned and permanently exclude them from circulation and total supply calculations.

The Assistance Fund is a core mechanism built into the Hyperliquid Layer 1 execution layer that automatically converts a significant portion of blockchain transaction fees into HYPE tokens. Tokens generated in this process are managed at the protocol level and operated by the Hyper Foundation.

The foundation explained that the fund effectively operates similarly to a continuous buyback-and-burn (buyback-and-burn) system. The Assistance Fund is designed so that no private keys or control mechanisms exist, storing tokens at an address that is mathematically inaccessible except via a hard fork. As a result, the tokens cannot be retrieved, but technically remain included in the total supply, raising concerns that they could distort metrics such as market capitalization.

According to The Block data, the Assistance Fund currently holds about 37 million HYPE tokens. This accounts for more than 13% of the total circulating supply of about 270 million. The foundation's position is to consider that amount permanently burned and exclude it from supply metrics through this proposal.

The Hyper Foundation said, "If a majority of votes are in favor, validators will agree to treat the HYPE in the Assistance Fund as burned," adding, "No additional on-chain action is required, and it is a procedure to bindingly confirm the social agreement not to upgrade the protocol to allow access to that address."

On Discord, multiple validators are reported to have expressed support. Voting runs until 13:00 on the 21st Korea time, and the final result will be determined by stake-weighted consensus.