Hyperliquid Debates 45% Token Supply Cut as $12B HYPE Unlock Threatens Market

• Proposal seeks to cut supply by 45% through burns and cancellations.
  
• $12B in unlocks could flood the market over the next 24 months.
  
• Whale sell-offs and competition weigh on HYPE price below $50.

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Hyperliquid’s community is entering a heated debate ahead of the project’s scheduled token unlocks in November. With over 10 million HYPE set to be released monthly, concerns are mounting that supply pressure could weigh heavily on the token’s value.

Proposal to Slash Supply by 45%

A new proposal, backed by pseudonymous researcher Hasu of Flashbots and Jon Charbonneau, suggests cutting Hyperliquid’s total supply by nearly half. The plan involves burning 31 million HYPE already bought back through Assisted Funds and canceling 421 million tokens originally reserved for community growth. If adopted, the changes would remove roughly 450 million HYPE, or 45% of the total supply. Supporters argue the move would offer “material economic benefits” and stabilize long-term value.

Whale Concerns Over Unlocks

Not everyone agrees. Some community members argue that canceling community allocations could erode trust and participation. But Hasu countered that those tokens are not “owed to anyone.” Meanwhile, large investors are already preparing for turbulence. Maelstrom Fund, linked to BitMEX founder Arthur Hayes, projected that nearly $12 billion worth of HYPE will be unlocked over the next two years—far more than current buybacks can absorb. By its estimate, monthly unlocks could leave a $410 million supply overhang.

Also Read: Hyperliquid (HYPE) Hits Record Highs as TVL Soars to $2.7B and DEX Volume Surges

Market Reaction and Competitive Pressure

Whale activity has already rattled confidence. On-chain data shows a recent $120 million withdrawal likely aimed at a sell-off. HYPE’s price has since slipped below $50, further pressured by the launch of rival perpetual DEX Aster (ASTER). Despite this, Hayes noted that Hyperliquid could still stage a massive comeback, with a potential 126x rally by 2028 if the project manages unlock risks effectively.

As November approaches, Hyperliquid’s response will be crucial. A clear decision on supply management could restore confidence, while hesitation may invite more sell-offs and strengthen competitors. The coming months may determine whether Hyperliquid cements its place in the market—or struggles under its own tokenomics.

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Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.

Andrew Chen

I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.