Hyperliquid Proposes $1 Billion HYPE Token Burn in Assistance Fund

Hyperliquid plans to make HYPE tokens in its Assistance Fund permanently inaccessible, effectively removing them from circulation. This action aims to reduce the total supply of the token and requires a validator vote by the Hyper Foundation.

Key Points:

The Assistance Fund converts trading fees into HYPE tokens, currently holding approximately $1 billion.
The proposal seeks to recognize these tokens as "burned," which would prevent their retrieval and decrease the circulating supply.
This decision impacts the Hyperliquid-native stablecoin USDH, as 50% of its reserve yield is converted to HYPE tokens for the fund.
The proposed "burn" aims to clarify governance and reduce ambiguity in Hyperliquid’s effective supply.

Market Sentiment:

Recently, Hyperliquid whales have shown varied sentiment, initially shorting during Bitcoin's consolidation around $96,000.
In mid-November, large positions included $3.44 billion in open trades: $1.15 billion in longs and $2.29 billion in shorts.
Later, some whales became bullish, opening nearly $100 million in long positions.
Currently, there is a shift to slightly bearish with $2.14 billion in longs and $2.43 billion in shorts.
Smaller wallets remain strongly bullish.

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