Hyperliquid Targets HYPE Token Recovery with Strategic Burn Proposal

Updated

December 18, 2025

Gambar Hyperliquid Targets HYPE Token Recovery with Strategic Burn Proposal

Jakarta, Pintu News – The Hyper Foundation has submitted a proposal to burn all HYPE tokens that are in the Relief Fund. If Hyperliquid validators approve this burn, then the amount of circulating supply and total supply will be reduced.

This move is expected to trigger a recovery in HYPE prices.

Hyperliquid Proposes Burning HYPE Tokens from Relief Funds

On December 17, the Hyper Foundation announced a proposal to burn the supply of HYPE tokens held in the Relief Fund. To proceed with this burn mechanism, a vote of the validators is required.

The Hyper Foundation is proposing a validator vote to formally recognize the Assistance Fund HYPE as burned, removing the tokens permanently from the circulating and total supply.

For context, the Assistance Fund converts trading fees to HYPE in a fully automated manner as part…
— Hyper Foundation (@HyperFND) December 17, 2025

This proposal is likely to strengthen confidence in Hyperliquid and the price of the HYPE token, which has fallen by more than 50% in recent months.

The Relief Fund plays an important role in the Hyperliquid ecosystem, automatically converting trading fees into HYPE tokens as part of the execution process at level 1 (L1). These tokens are stored at a special system address (0xfefefefefefefefefefefefefefefefe), which, like the zero address, never has a private key or control over the funds within it. As such, these tokens cannot be retrieved unless a hard fork is performed.

If this proposal is approved, then the current 37 million HYPE-as well as all future tokens that go to that address-will be burned and removed from the total supply. The current number of tokens represents almost 13% of the circulating supply.

Validator Voting Timeline and Governance Processes

A vote by the validators will determine whether or not the tokens stored in the Relief Fund address will be burned. A “Yes” vote means the validators agree to consider the tokens as permanently removed from circulation.

Hyper Foundation also shared that the outcome of this vote will reinforce the consensus to never allow any protocol enhancements that can access those locked tokens.

Validators must submit their votes in the governance forum by December 21 at 04.00 UTC. After that, users can stake validators who align with their views until December 24 at 04.00 UTC.

The final result will be determined based on the staking-weighted consensus measured at the close of voting on December 24.

The Kinetiq x @HyperionDeFi validator, managed by @PierTwo_com, has opted in favor of the Hyper Foundation vote to consider the HYPE accumulated by the Assistance Fund as burned, removing the tokens permanently from the circulating and total supply.

The @KinetiqFND will… https://t.co/K60IONSoaf
— Kinetiq (@kinetiq_xyz) December 17, 2025

Some validators, such as Kinetiq x Hyperion, have even expressed support for the proposal to burn all existing tokens in the Relief Fund address.

HYPE Token Price Rise and Community Reaction

The Hyperliquid community hopes that the token burn will trigger a recovery in HYPE’s price by reducing its supply, while increasing confidence in the Hyperliquid ecosystem as a whole.

As the voting deadline approaches, the community continues to monitor closely, anticipating positive changes in the token’s dynamics.

In addition, the launch of the first Hyperliquid spot ETF in the US is also approaching, after Bitwise amended the S-1 document for the ETF. In the document, it mentions a management fee of 0.67% and BHYP as its ticker symbol.

HYPE’s price briefly rose 2% after the proposal to burn HYPE tokens from the Relief Fund was announced, and is currently trading at $26.66. The lowest and highest prices in the last 24 hours were $26.21 and $28.02. However, trading volume has dropped by 5% over the same period.

Data from CoinGlass shows massive buying in the derivatives market. At the time of this report, total open interest in HYPE futures rose 3% to $1.52 billion in the last 24 hours. In a 4-hour period, open interest rose by almost 4%, with spikes of over 5% on both CME and Binance.

FAQ

What is Hyper Foundation?

Hyper Foundation is the organization that manages the Hyperliquid ecosystem, including the management of the HYPE token.

What is an Assistance Fund in the context of Hyperliquid?

The Assistance Fund is a protocol-level mechanism that converts transaction fees into HYPE tokens, which are stored in a dedicated system address.

When is the deadline for validators voting on the token burning proposal?

Validators must cast their votes in the governance forum by December 21 at 04:00 UTC.

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