Cryptocurrency management companies holding hype – the token behind decentralized derivative exchange hyperliquid – proposes reducing the total supply of hype by 45% to become more attractive to investors.
In a post on Monday’s X, DBA Asset Management Investment Manager Jon Charbonneau outlined three changes to Hyperliquid’s economic model. Rescising approval of all uncontrast hype tokens (FECRs) for future emissions and community rewards (FECRs), burning all hype for Hyperliquid Support Fund (AF) and removing 100 million supply of hype.
His proposal was co-authored by pseudonym code researcher Hasu.
You will have to vote for the plan and pass through the Hyperliquid governance structure, but the DBA will become a major participant given that they are actively betting hype and retaining a material position in the token.
The DBA executive said the proposed changes would attempt to correct misuse of market hype.
“This is problematic because this could punish this excess supply in the evaluation of the protocol and unfairly bias future capital allocation decisions by preallocating these tokens,” he said, adding that the change will become even more attractive to investors and stakers, and will maintain the protocol’s ability to fund initiatives through new issuances.
The proposal will see a reduction of 421 million from the future emissions and community reward category and 21 million from the assistance fund, amid the recent increase in investor interest in high lipid ecosystems.
Within a week of revealing USDH’s new USD stubcoin, Hyperliquid began a vote to decide who will issue the Stablecoin, attracting interest from Paxos, Frax, Sky, Agora and Native Markets, who won last week.
Hyperliquid handled a team of 11 people and $300 billion in trading volume in July, making it one of the most efficient platforms in the industry.
Charbonneau pointed out that USDH rolls out will significantly contribute to Hyperliquid’s revenue.
Crypto investors from other institutions support DBA proposals
Haseeb Qureshi, managing partner at Dragonfly, agreed to Charbonneau’s take and said that the nearly 50% community allocation is an “amorphous slash fund” that lets you know what to do at a later date.
Qureshi said it’s okay to spend tokens on growth incentives as long as it’s transparent, but allocated nearly 50% of the total supply as “It’s stupid to do anything and we should finish it.”
Charbonneau’s proposal met criticism
Crypto Pundit Mister Todd describes the proposal as “absolutely stupid and disaster,” saying future eliminations are the most powerful growth tool at hand with hyperglycemia.
Related: High-Lipid Whale Pulls a $122 Million Hype Token when Arthur Hayes comes out
Others suggested that hyperglycemia should always secure a token if a fine or sanction from a similar organization occurs.
However, Charbonneau has rebutted both claims that it will not reduce the hype available in such a scenario. Rather, it simply changes its accounting.
Hype has been cooled after rallying at new highs
The hype surged to a new all-time high of $59.30 on Thursday, with the rest of the other crypto market continuing to go downwards and sideways.
However, since then, the hype has dropped by more than 22% to $46.08. This is because market sentiment has cooled down and investment companies like the Arthur Hayes-led Maelstrom Fund offloaded their hype holdings.
Hayes said the company has sold its hype holdings in anticipation of sales pressure from $12 billion worth of token unlock over the next 24 months.
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