Hyper Foundation Initiates Validator Vote to Burn HYPE Tokens Permanently

The Hyper Foundation proposes a validator vote to permanently burn 37 million HYPE tokens from December 17-24, 2025, potentially removing over 10% of its supply.

This action could impact HYPE’s market value and governance dynamics, prompting broader discussions on token supply management within cryptocurrency ecosystems.

HYPE Token Burn to Reduce Supply by 10%

The Hyper Foundation has suggested a validator vote to burn HYPE tokens held in the Hyperliquid Assistance Fund, affecting the token’s circulating and total supply. The tokens, valued around $1 billion, surpass 10% of the total HYPE supply.

The proposal involves burning 37 million HYPE tokens without an on-chain transaction, as the tokens reside in an inaccessible system address, equating to a burn address, effectively removing them.

Market Reactions to Potential Token Scarcity

Burning a substantial portion of HYPE tokens may lead to increased token value by decreasing the overall supply. Markets could react to this scarcity, impacting trading within DeFi spaces.

The proposal comes at a crucial time for HYPE, with the potential for broader implications on market dynamics and liquidity within Hyperliquid. As one observer noted,

“Market analysts predict that current trends may lead to long-term value appreciation for HYPE, should investor confidence remain strong following the execution of the token burn.”

Previous Attempts at Supply Reduction

In September 2025, a similar proposal to reduce HYPE’s total supply by 45% was discussed but not pursued. This historic precedent provides context for current actions.