Introduction
A major crypto asset manager has proposed slashing HYPE token supply by 45% to improve its investment appeal. DBA Asset Management wants to eliminate future emissions and burn reserve funds. The changes would require approval through Hyperliquid’s governance system.
Key Points
- Proposal would eliminate 45% of HYPE token supply through emissions cancellation and fund burning
- DBA Asset Management holds significant stake and would be major governance participant
- Changes target improved tokenomics by creating scarcity and removing supply cap
Radical Tokenomics Overhaul Proposed
DBA Asset Management, a significant holder of HYPE — the native token of decentralized derivatives exchange Hyperliquid — has put forward a proposal that would fundamentally reshape the token’s economic model. The plan, outlined by DBA investment manager Jon Charbonneau in a social media post on Monday, calls for a dramatic 45% reduction in HYPE’s total supply. The proposal was co-authored by pseudonymous crypto researcher Hasu, adding weight to the technical merits of the suggested changes.
The core of the proposal involves three specific modifications to Hyperliquid’s existing token structure. First, it seeks to revoke authorization for all unminted HYPE tokens designated for future emissions and community rewards (FECR). Second, it calls for burning all HYPE currently held in Hyperliquid’s Assistance Fund (AF). Finally, the plan would remove HYPE’s hard cap of 1 billion tokens entirely. Together, these measures represent one of the most substantial tokenomics overhauls proposed in the decentralized finance space recently.
Scarcity as an Investment Strategy
The primary rationale behind DBA Asset Management’s proposal centers on making HYPE easier to value and more attractive to investors. By eliminating 45% of the potential token supply, the firm aims to create artificial scarcity that could potentially support higher token prices. This approach reflects a growing trend among crypto asset managers who believe that simpler, more predictable tokenomics can lead to better long-term investment outcomes.
Jon Charbonneau’s argument likely rests on basic economic principles of supply and demand. With fewer tokens in circulation or scheduled for future release, each remaining HYPE token would represent a larger proportional share of the Hyperliquid ecosystem. The removal of the 1 billion supply cap adds another layer of complexity, potentially giving the protocol more flexibility in future token distribution while creating clearer expectations about maximum possible dilution.
Governance Hurdles and Implementation
Despite DBA Asset Management’s substantial stake in HYPE and active participation in staking, the proposal faces significant governance hurdles. Hyperliquid operates as a decentralized exchange, meaning any changes to its tokenomics must be approved through the platform’s governance system. This typically involves a voting process where token holders weigh in on proposed changes.
DBA’s material position in HYPE gives the firm considerable influence in any governance vote, but it does not guarantee the proposal’s passage. Other large token holders and the broader community will need to be convinced that reducing the token supply and removing the cap ultimately serves the ecosystem’s best interests. The involvement of respected researcher Hasu as co-author may help build credibility for the proposal among technically-minded voters.
If approved, the implementation would represent a significant test of Hyperliquid’s governance mechanisms. The process of burning tokens from the Assistance Fund and formally revoking authorization for unminted tokens would need to be executed flawlessly to maintain confidence in the platform. The success or failure of this proposal could set a precedent for how other decentralized protocols approach tokenomics revisions in the future.
📎 Related coverage from: cointelegraph.com