Hyperliquid tokenomics is undergoing a major transformation! The DBA proposes a 45% reduction in HYPE supply and the cancellation of the 1 billion cap.

The crypto asset management company DBA recently proposed a significant plan to reduce the total supply of the native token HYPE of the decentralized derivatives trading platform Hyperliquid by 45%, aiming to reshape its tokenomics and boost investor confidence. This move comes as the Hyperliquid ecosystem's popularity soars, with its recent governance vote selecting Native Markets as the issuer of the new stablecoin USDH, defeating strong competitors like Paxos and Frax. For crypto users, this article details the proposal specifics, community debates, and potential impacts, along with a HYPE price forecast analysis for 2025 to help you assess the long-term investment opportunities of this DeFi platform.

DBA Proposal Core: Burn 442 million HYPE and Cancel 1 billion Cap

DBA Asset Management Company Investment Manager Jon Charbonneau published a proposal on the X platform on September 22, co-signed by crypto researcher Hasu. The proposal focuses on three key adjustments: revoking the authorization of 421 million unminted HYPE tokens (which were originally reserved for future emissions and community rewards), burning 21 million HYPE from the protocol assistance fund, and completely removing the current total supply cap of 1 billion HYPE.

Charbonneau pointed out that the fully diluted valuation (FDV) of HYPE is distorted due to the allocation of tokens that may never circulate, which not only underestimates the true value of the protocol but may also distort future funding allocation decisions. “Pre-allocating these tokens may unnecessarily bias certain capital allocation choices,” he wrote in the proposal. DBA, as a holder and active staker of HYPE, will play an important role in governance voting, and if this proposal passes, it will significantly enhance the scarcity and appeal of the Token.

For crypto users, this move is similar to many DeFi projects optimizing their deflationary models through burning mechanisms. Historical data shows that similar supply reductions can drive token prices up by 15%-30% in the short term. In the HYPE price prediction 2025, this transformation may help it break through the current resistance level, especially against the backdrop of rising Hyperliquid trading volumes.

Community Debate Heats Up: Clarity vs. Growth Flexibility

Once the proposal was released, it sparked heated discussions within the community. Supporters believe that this will eliminate uncertainty in the market regarding unused allocations and provide a more transparent tokenomics framework. Haseeb Qureshi, managing partner at Dragonfly, strongly supports the plan, describing nearly 50% of the community allocation as a “vague idle fund pool,” emphasizing that while growth incentives are necessary, they should be distributed through transparent mechanisms rather than left to ambiguous governance decisions.

The criticism is equally strong. Crypto commentator Mister Todd called it “stupid and harmful,” believing that future emissions are Hyperliquid's most powerful growth tool, and cutting supply may limit the platform's incentive capabilities during a bear market. Other users are concerned that reducing reserves could leave them vulnerable in legal or regulatory events, such as potential DOJ fines. Charbonneau rebutted that the proposal merely adjusts accounting methods and does not reduce the available HYPE in emergencies.

This debate highlights the pain points of DeFi governance: balancing short-term valuation optimization with long-term ecological expansion. Encryption users can learn from this case to assess the tokenomics risks of other projects. The HYPE price prediction for 2025 should closely monitor the voting results; if approved, it may strengthen its competitiveness as a derivatives DEX.

Hyperliquid Ecosystem Heats Up: July Trading Volume Reaches 33 Billion USD

The timing of the proposal coincides with the resurgence of the Hyperliquid ecosystem. With only 11 team members, the platform processed $330 billion in transaction volume in July, far exceeding the fee revenue of many Layer 1 networks. Its high-performance L1 blockchain is designed specifically for perpetual futures, and gas-free trading has become a core selling point to attract traders. Recently, the HYPE price has fallen 22% from a historic high of $59.30 to around $46.08 (current real-time price is about $49.20), and while market sentiment has cooled, the 24-hour trading volume exceeding $570 million shows resilience.

It is worth mentioning that the Maelstrom Fund led by Arthur Hayes has completely liquidated its HYPE holdings due to concerns about the $12 billion token unlocking pressure over the next two years. Nevertheless, 97% of the platform's transaction fees are used to repurchase HYPE and distribute it, combined with a staking annual yield of up to 55%, still providing strong support for holders. Crypto users, when predicting the price of HYPE in 2025, can view the platform's TVL and fee growth as key indicators, and it is expected that if the supply reduction materializes, the FDV will be closer to the real market value, driving the price towards the $60-70 range.

Native Markets secures USDH stablecoin issuance rights

Previously, Hyperliquid completed the governance vote for the issuance of the USDH stablecoin, with Native Markets standing out with community support, defeating established competitors such as Paxos, Frax, Ethena, and Sky. USDH is positioned as a “Hyperliquid native, compliant, and on-chain minted” dollar-pegged token, aimed at reducing reliance on USDC and strengthening liquidity in the spot market. Although Native Markets is an emerging player, it has the endorsement of Stripe's Bridge subsidiary, and its proposal emphasizes minting directly on HyperEVM and evenly distributing reserve earnings for HYPE repurchases and ecosystem growth.

The voting process has undergone weeks of debate, with several issuers introducing aggressive revenue-sharing terms to gain validator support, highlighting the significant incentives to control USDH—Hyperliquid currently holds $5.5 billion in USDC deposits, accounting for about 7.5% of the total USDC supply, and redirecting to USDH could yield hundreds of millions in annualized returns. Ethena even withdrew midway and chose to support Native Markets, further solidifying its leading position. Although the revenue sharing is not as generous as competitors, the deep integration of Native Markets' ecosystem and relationships with validators became the key to victory.

This milestone marks the maturity of Hyperliquid governance, and the launch of USDH may accelerate its transformation from a perpetual DEX to an all-in-one DeFi platform. As encryption users focus on HYPE price predictions for 2025, this stablecoin can be seen as a catalyst to drive TVL growth and attract more cross-chain liquidity.

HYPE Price Prediction 2025: Investment Opportunities and Risks under Supply Transformation

The current market capitalization of HYPE is approximately 16.4 billion USD, with a circulating supply of 334 million coins and an FDV of 49.2 billion USD. If the supply reduction proposal is approved, it will reduce the total supply to about 558 million coins, potentially enhancing scarcity but may also trigger short-term volatility. In an optimistic scenario, considering the platform's expected trading volume to double by 2025, HYPE could reach 70-80 USD; in a pessimistic case, it may fall back to the 40 USD range due to regulatory uncertainties.

Risks include unlocking pressure and intensified competition, but Hyperliquid's fee buyback mechanism (having repurchased 28.5 million HYPE, worth 1.3 billion USD) provides a buffer. Encryption users suggest: short-term gains can be locked through staking, while long-term should consider proposals that pass as buy signals, and diversify allocations to hedge against DeFi volatility.

Conclusion: The Governance Test of Hyperliquid and the Future of Decentralized Finance

The HYPE supply reduction proposal for DBA and the finalization of USDH issuance rights mark Hyperliquid's leap from a high-growth DEX to a mature ecosystem. Although community debates are intense, transparent governance is reshaping investor trust. Despite ongoing market volatility and unlocking risks, this transformation may inject new momentum into HYPE price predictions for 2025, pushing its market capitalization into the top ten. Crypto users should track the progress of governance votes and formulate strategies based on on-chain indicators—during the DeFi wave, seizing the dual drive of supply optimization and stablecoin innovation may become the greatest opportunity in 2025.