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The Hyper Foundation announced that it has permanently burned 37 million HYPE tokens in its Assistance Fund. The tokens, which are already locked in a keyless system, are now excluded from supply calculations by community agreement.
The decision was approved by 85 percent of staked validators in a governance vote that ended on December 24, 2025. The burn improves transparency and supports deflationary mechanics in Hyperliquid’s trading platform. The move will also apply to future buybacks from fees.
Hyperliquid’s Assistance Fund uses nearly all trading fees to buy back HYPE tokens from the market. In 2025, the platform generated over $1 billion in trading volume of perpetual contracts valued at trillions. The buyback resulted in 37 million tokens now removed from circulation.
The recent vote ensures that the reported number of tokens matches what people actually hold. The move helps ease worries about having too many tokens available. Moving forward, fees will continue to be directed to the Hyperliquid Assistance Fund system address, functioning as permanent burns that do not impact unlocks.
Meanwhile, earlier community discussions affected the proposal. There were separate insider trading claims involving a former employee; however, these did not affect the vote. The process highlighted the maturity of the protocol’s decentralized governance, which was developed without any venture capital support
Hyperliquid is popular for its on-chain perpetual trading, achieving high trading volumes and over $2 billion in total value locked (TVL). Institutional investors like its deflationary model because it helps make decentralized finance (DeFi) systems more sustainable. However, HYPE has struggled due to competition and market conditions.
Some critics believe that the new model may weaken emergency reserves or grants. However, burning tokens can have benefits. It will lower the supply of HYPE tokens by $900 million, based on prices around $24 to $27 during the voting period. Overall, the burn, like some others, shows that Hyperliquid is committed to long-term holders by focusing on scarcity and transparency.
The move could lead to an increase in value as trading activity grows, but success relies on adoption and market sentiment. The governance vote results indicate trust in the protocol’s core values and its approach to generating revenue.
The post Hyperliquid Slashes Circulating Supply, Burns $900M of HYPE Tokens appeared first on CoinTab News.
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