Hype Token Community Debates Proposal to Cut Supply and Fix FDV Issues

Can reducing supply make a token stronger?

This is the big question for Hyperliquid as a new proposal suggests cutting Hype Token total supply by more than 45% .

Source: X (formerly Twitter)

The proposal is by Hasu and Jon Charbonneau, and approved by Felipe Montealegre and Comfy Capital.

The idea is straightforward: There are just too many unused tokens lingering in reserve, and this makes HYPE Token look riskier and more expensive than it really is.

By removing such tokens, the project intends to streamline its economics and make them more investor-friendly.

The Problem: Too Many Unused Tokens

At the moment, Hyperliquid owns two big pools of dormant supply.

• About 31 million tokens are sitting in the Assistance Fund (AF).

• Over 421 million are reserved for Future Emissions & Community Rewards (FECR).

Even though these tokens are not in circulation, crypto websites like CoinMarketCap and CoinGecko still count them when showing fully diluted value (FDV).

This makes FDV look much higher than it should be, which often turns investors away.

In short, Hype Token is being judged by numbers that don’t match reality .

The HYPE price is now trading at $48 with a decrease of 1.93% in the last 24 hours.

Source: CoinMarketCap

It is testing $50.94 support with bearish momentum, but oversold conditions suggest a rebound.

If the 45% supply cut proposal passes, renewed investor confidence could spark a strong rally, turning current weakness into future upside momentum.

The Proposal: Burning and Removing Supply

Reduce the 1 billion HYPE token maximum supply. New tokens should only be created when required for rewards or staking.

If enacted, these measures would lower distrbution by nearly half. Proponents feel it will simplify the project's value and attract more investors.

Community Response: Support With Some Risks

The majority of community members are in support of the idea strongly.

• They point out that it corrects broken FDV numbers and simplifies the project, with no negative impact for holders.

• However, not everyone is in support of it entirely. Some worry that burning the Assistance Fund removes a safety cushion.

• If the project faces problems like government fines, hacks, or market crashes, having tokens in reserve could help survival.

• A few suggest keeping some reserves in stablecoins or holding back a small part of supply for future growth incentives like airdrops.

Looking Ahead: A Shift in HYPE Tokenomics

The proposal makes it clear that no holder’s share of ownership will change. It’s more about fixing accounting than making major changes to the token’s use.

If passed, Hyperliquid would differentiate itself with more transparent token economics in a space where distribution limits routinely mislead investors.

The community deems this action will establish trust, enhance Hyperliquid's market reputation, and provide the project with greater space to expand.

For the time being, the choice lies with the community: should close to half of Hype Token's supply be burned for a clear future?