Hyperliquid is taking a rare and decisive step in onchain governance: asking validators to formally agree that more than $1 billion worth of HYPE tokens will never, under any circumstance, reenter circulation.
At the center of the proposal is the protocol’s Assistance Fund, a system-level address that has quietly accumulated HYPE for months through Hyperliquid’s fee mechanics. The fund automatically converts trading fees into HYPE and routes them to an address that was deliberately built without access controls. No keys. No withdrawal logic. No recovery path unless the network itself is hard-forked.
Now, the Hyper Foundation wants to eliminate any remaining ambiguity. The validator vote seeks binding social consensus that these tokens should be treated as permanently inaccessible, effectively burned for governance and supply accounting purposes.
The distinction matters. Technically, the tokens still exist onchain. Practically, they cannot move. And strategically, Hyperliquid wants the market to stop treating them as a latent overhang.
At the time of the proposal, the Assistance Fund holds roughly $1 billion in HYPE. By voting yes, validators are agreeing to exclude these tokens from circulating and total supply calculations going forward. The Foundation’s message is simple: these tokens were never meant to be spent, sold, or redirected. Treat them accordingly.
This clarification comes at a moment when Hyperliquid’s economic design is drawing serious institutional attention. The protocol’s fee engine routes nearly all trading revenue back into HYPE through automated repurchases. According to Cantor Fitzgerald, Hyperliquid has generated approximately $874 million in fees year to date in 2025, with around 99 percent of those fees funneled into the Assistance Fund mechanism.
That model has led some observers to describe Hyperliquid as aggressively deflationary. But the Foundation is careful to reset expectations. The proposal does not retroactively reduce supply. It does not destroy tokens. What it does is align supply metrics with how the protocol has always functioned.
In other words, this is not about creating artificial scarcity. It is about acknowledging reality.
The issue extends beyond HYPE itself. Native Markets, issuer of the Hyperliquid-native stablecoin USDH, has confirmed that half of USDH’s reserve yield flows into the same Assistance Fund and is converted into HYPE. If the vote passes, those contributions will also be formally recognized as permanently sidelined.
The governance move sharpens the protocol’s narrative at a time when Hyperliquid is already operating at scale. Over the past 30 days, the platform processed more than $205 billion in perpetual futures volume, placing it among the top three perps DEXs globally. Parallel to that growth, a new class of digital asset treasury firms has begun accumulating HYPE as a long-term balance sheet asset, further increasing scrutiny around supply transparency.
By locking in this consensus now, Hyperliquid is choosing clarity over optionality. It is telling validators, institutions, and traders that the Assistance Fund is not a strategic reserve waiting to be tapped. It is a terminal endpoint for value, embedded directly into the protocol’s economic loop.
In a market where supply narratives often shift with convenience, Hyperliquid is drawing a hard line. These tokens are not coming back. And the network wants everyone to account for that, permanently.
