DBA Proposes 45% Cut to HYPE Token Supply to Revamp Tokenomics

DBA Asset Management has proposed a major overhaul of Hyperliquid's HYPE tokenomics by cutting its total supply by approximately 45%. The plan includes revoking authorization for 421 million unminted tokens reserved for future emissions and community rewards, burning 21 million tokens from the protocol's Assistance Fund, and removing the existing 1 billion token cap. Proponents argue these changes would correct a distorted fully diluted valuation metric that currently overstates supply, thereby making HYPE more attractive to investors and stakers while still allowing future token issuance for growth. The proposal has garnered support from institutional investors like Dragonfly's Haseeb Qureshi, who emphasize the need for transparent and properly allocated incentives, though some critics warn it could reduce flexibility for future growth. This supply cut aims to simplify the token's economics, boost investor confidence, and potentially spark renewed community trust amid rising interest following the launch of Hyperliquid's USDH stablecoin. The ultimate impact depends on community governance and market response, as Hyperliquid continues to demonstrate strong trading volume with a lean team.