Key Notes
- HYPE tokens held in the Hyperliquid protocol’s Assistance Fund system address may soon be made permanently inaccessible.
- This is dependent on the result of the proposed validator vote by Hyper Foundation.
- Currently, the protocol contains roughly $1 billion in HYPE tokens.
Hyperliquid
HYPE
$27.66
24h volatility:
0.7%
Market cap:
$7.47 B
Vol. 24h:
$372.99 M
is looking to make HYPE tokens held in the protocol’s Assistance Fund system address permanently inaccessible.
This means that the tokens will be taken out of circulation, reducing the total supply of the token. To this end, the Hyper Foundation has proposed a validator vote.
Hyperliquid to Burn Assistance Fund HYPE
Hyperliquid protocol’s Assistance Fund is a protocol-level mechanism embedded in the Layer-1 network’s execution.
Its operations are around converting trading fees into HYPE tokens automatically and routing them to a designated system address. It currently contains roughly $1 billion in tokens.
However, the Hyper Foundation is proposing that these HYPE tokens be recognized as permanently inaccessible.
From inception, the system address was designed without control mechanisms. As a result, the funds are irretrievable without a hard fork. Once validators vote “Yes” to the latest proposal, they will be agreeing to treat the Assistance Fund HYPE as “burned.”
Excluding these tokens from the asset’s circulating and total supply would impact Hyperliquid-native stablecoin USDH.
Native Markets reminded users that 50% of the stablecoin’s reserve yield usually goes to the Assistance Fund and is converted into HYPE tokens.
The company added that “should this validator vote pass, these contributions will then be formally recognized as burned.”
It is worth noting that this “burn” will formalize how the fee-derived tokens are treated for governance purposes. Ultimately, it will reduce ambiguity around Hyperliquid’s effective supply.
Hyperliquid Whales Moves to Being Slightly Bearish
Meanwhile, Hyperliquid whales have been the talk of the ecosystem in the last few weeks.
Around mid-November, the largest whales on the network were going short, coinciding with the time Bitcoin
BTC
$87 120
24h volatility:
0.2%
Market cap:
$1.74 T
Vol. 24h:
$42.89 B
consolidated around $96,000.
For example, Hyperliquid “Leviathans” had $3.44 billion in open positions at the time. It comprised $1.15 billion in longs and $2.29 billion in shorts.
A few weeks later, some whales turned bullish, opening nearly $100 million of long positions on Hyperliquid.
More recently, Hyperliquid began shifting its stance from very bearish to slightly bearish. The address betting on longs reached $2.14 billion, while the addresses targeting shorts sat at $2.43 billion.
On the other hand, smaller wallets, surpassing 300,000 addresses in total, have been strongly bullish.
next
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
Godfrey Benjamin on X
Source: https://www.coinspeaker.com/hyperliquid-team-wants-to-burn-1-billion-in-protocol-assistance-fund/
