Hyperliquid's validators are being urged to prepare to vote on a proposal to burn all 37.1 million HYPE held in the Assistance Fund.
Hyperliquid wants to burn $1 billion of its HYPE reserve fund. Photo: DL News
On the morning of December 17, 2025, Hyper Foundation – the organization representing and managing the layer-1 blockchain and the Hyperliquid (HYPE) DEX – announced it would soon hold a vote on a highly significant proposal. This proposal calls on network validators to recognize all HYPE Token in the Assistance Fund as having been “burned,” officially removing them from circulation.
Hyperliquid's Assistance Fund currently holds 37.1 million HYPE Token , worth nearly $1 billion.
The Hyper Foundation is inspired a validator vote to formally recognize the Assistance Fund HYPE as burned, removing the tokens permanently from the circulation and total supply.
— Hyper Foundation (@HyperFND) December 17, 2025
For context, the Assistance Fund converts trading fees to HYPE in a fully automated manner as part…
This fund was initially established to serve as a reserve treasury for the project in emergencies such as security breaches or market fluctuations. The fund's resources are derived from user fees for using Hyperliquid, and are unanimously agreed upon by validators to be used to accumulate HYPE. This makes Hyperliquid one of the leading names in the buyback wave , which is currently XEM as the sole driver for the Token price stability.
Over time, the Assistance Fund has acquired up to 37.1 million HYPE Token , equivalent to 3.7% of the total supply.
Hyperliquid Assistance Fund address balance, screenshot from HypurrScan at 11:40 AM on December 17, 2025.
Hyper Foundation's proposal further reveals that the Assistance Fund's address ( 0xfefefefefefefefefefefefefefefefefefefefe ) has always functioned as the burning address 0x000…00 on Ethereum, with no private key to ensure no one can control the funds unless the unified network performs a Hard Fork to unlock them.
Hyper Foundation stated that if validators vote in favor of their proposal, the $1 billion in HYPE Assistance Fund's assets will be XEM burned, and no further proposals will ever be submitted to unlock the funds.
The voting process will take place from December 21st to December 24th, 2025, with the following key dates:
- 11:00 AM on December 21, 2025 (Vietnam time): Validators will announce their specific intentions by declaring "Support" or "Oppose" the proposal on social media:
- From December 21st to December 24th: Hyperliquid users will Staking HYPE for validators who share their views.
- 11:00 AM on December 24, 2025 (Vietnam time): Hyperliquid will hold its official vote.
Under Hyper Foundation's post, the majority of community opinions support the proposal to burn Assistance Fund Token , as it would essentially reduce the supply of HYPE and have a positive effect on the price. However, there are also concerns that eliminating the Assistance Fund will put pressure on the Hyperliquidity Provider (HLP) , making it the only lifeline in case the project needs liquidation to address losses from incidents. HLP currently manages $390 million in assets, only one-third of the Assistance Fund, and its role is primarily market maker and liquidator on the DEX.
Nevertheless, throughout its one-year history, Hyperliquid has never experienced an incident that forced the project to disburse funds from its Assistance Fund, rendering it an idle asset that generates no additional benefit. However, the HLP fund faced immense pressure during the 10/10 flash crash and had to conduct an ADL (Advance Depositary Receipt) to protect its position, creating controversy within the community that continues to this day.
correct me if I'm wrong but isn't this a bad idea
— Eddie (@DancingEddie_) December 17, 2025
the whole point of the assistance fund is to reserve hype for special and urgent situations. emergencies/ ETC.
burning it doesn't pump the price or otherwise do anything. it just removes the safety net they have...
am I wrong? https://t.co/m1Mt8HxCaH
The vote to burn HYPE in the Assistance Fund will be Hyperliquid's second notable governance decision in recent months, following the drama surrounding the USDH stablecoin auction among major DeFi players in September.
Hyperliquid's HYPE Token price rose slightly at the time the proposed burning of HYPE tokens in the Assistance Fund was announced, before falling back down.
The price of HYPE has plummeted significantly over the past month, following the general downward trend of the cryptocurrency market and the intense selling pressure on the network, stemming from the project team's major unlock at the end of November. This Token drop has also caused many large whales to lose patience and continue selling, exacerbating the crisis.
HYPE price fluctuations over the last 24 hours, screenshot from CoinGecko at 11:50 AM on December 17, 2025.
Furthermore, with the emergence of more and more competing DEX platforms such as Aster, Lighter, edgeX, and HumidFi, Hyperliquid's market share is seriously threatened, leading to a decline in both daily volume and fees collected over the past three months.
Comparison of volume between Hyperliquid and Aster. Source: @adam_tehc on Dune Analytics (December 17, 2025)
Comparison of fee revenue between Hyperliquid and Aster. Source: @adam_tehc on Dune Analytics (December 17, 2025)
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