The Hyper Foundation recently released a proposal at the governance forum, planning to initiate a vote involving validators to officially acknowledge that the HYPE tokens held by the 'aid fund' are considered to be destroyed, and permanently remove them from circulation supply and total supply. According to the proposal, the vote does not involve any on-chain technical operations but is instead confirmed through governance consensus that this batch of tokens will not be retrieved or reintroduced into circulation in the future.

The aid fund HYPE is for 'mathematically irretrievable' assets

The Hyper Foundation explains that the aid fund is a system module within the Hyper L1 execution layer that automatically converts transaction fees into HYPE, and the system address used is:

「0xfefefefefefefefefefefefefefefefefefefefe」

This address is similar to the common 'zero address', which has never corresponded to any private key and does not have any physical assets that can be controlled. The foundation points out that without conducting a hard fork, the funds in that address cannot be mathematically retrieved. Therefore, the Hyper Foundation believes that the batch of HYPE tokens stored in the aid fund system address has essentially permanently exited circulation.

Confirming 'permanent destruction' through social consensus

Many people may wonder why a governance proposal is needed if these tokens are already 'unretrievable'. In fact, the core of this proposal is to ask validators to establish a clear 'social consensus' through governance voting, agreeing to treat the HYPE in the aid fund as destroyed assets and committing not to authorize any protocol upgrades in the future to attempt to access that address.

If the vote passes, no on-chain actions will be required, as the tokens themselves are already in a system address controlled without private keys. The vote is essentially a binding governance commitment, rather than a technical change.

Impact on supply structure

It is important to emphasize that if the proposal is passed, it will not have a substantial impact on the circulation or supply of HYPE, but rather enforces constraints at the governance level, formally confirming that the HYPE accumulated in the aid fund will not be re-circulated for any reason in the future. After the news was released, HYPE saw a significant rebound, but perhaps the community realized the true intent of the proposal, leading to HYPE quickly falling back to its starting point.

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