The Hyper Foundation has proposed treating all HYPE in its Hyperliquid Assistance Fund as permanently burned, with the tokens removed from the supply via a validator vote.
Summary
- Hyper Foundation proposed a validator vote to treat all HYPE in the Assistance Fund as permanently burned.
- The tokens are already locked into a system address without a private key, so no onchain action is required.
- The vote runs until December 24 and could remove more than 10% of HYPE from the circulating and total supply.
A board proposal from the Hyper Foundation would exclude all HYPE in the Hyperliquid Assistance Fund from circulating supply, pending approval by the validator.
The proposal was: published on December 17 through the Hyper Foundation’s official channels and board forum.
Welfare fund tokens are treated as burned
Under the proposal, validators will be asked to recognize the Hyperliquid (HYPE) tokens collected in the Assistance Fund as permanently burned, despite no onchain transaction taking place. The tokens already reside in a system address that has never been managed by a private key, making them inaccessible without intervention at the protocol level.
The Assistance Fund converts the trading fees from the protocol to HYPE through an automated process embedded in Hyperliquid’s L1 execution layer. These tokens accumulate in a public address, which has no private key and functions in practice in the same way as a fire address.
A ‘Yes’ vote would create a binding social consensus that the protocol will never allow an upgrade to access those funds. The Foundation said no technical changes are needed because the tokens are already mathematically unrecoverable.
According to Community estimates, the balance of the Assistance Fund is approximately HYPE 37 million, representing more than 10% of the circulating supply. If they are formally removed, the tokens will also be excluded from the total supply calculations.
Validator voting and timing
The decision will be made through a stakes-weighted validator process. Validators must express their intent in the governance forum by December 21 at 04:00 UTC. Token holders can then delegate their stakes to validators aligned to their position through December 24 at 04:00 UTC, when the final outcome will be determined.
If approved, the change would create a more restrictive supply model by preventing any future use of the Relief Fund balance for grants, development or emergency measures. The Foundation said the vote would determine whether the Relief Fund balance is permanently excluded from supply calculations.
The vote follows previous community discussions about supply cuts in 2025, including a September proposal that explored a 45% reduction in overall supply but made no progress.
In 2025, Hyperliquid ranked as the top onchain perpetuals locations in terms of volume and fees. A large part of these reimbursements flows through the automated conversion process of the protocol to the Assistance Fund. That mechanism has played a central role in how HYPE’s supply dynamics have evolved over time.
