DBA Asset Management has proposed reducing the total supply of HYPE, the token for Hyperliquid, by 45% to enhance its appeal to investors. Investment manager Jon Charbonneau detailed three key changes to the economic model: revoking unminted HYPE tokens for future use, burning 421 million tokens from the Assistance Fund, and eliminating HYPE's allocated 1 billion tokens for community rewards. This proposal aims to address market misvaluations caused by including unissued tokens in the fully diluted valuation metric. Despite potential criticisms, Charbonneau asserts the reallocation does not lessen HYPE's availability for future needs or emergencies. The proposal comes at a time when HYPE recently experienced a price surge before cooling off amidst a broader downturn in the crypto market, dropping from a peak of $59.30 to around $46.08. Some institutional investors support the proposal, viewing the current community allocation as inefficient, while others express concerns that reducing token supply could hinder Hyperliquid's growth prospects. The proposal will proceed through Hyperliquid's governance structure, in which DBA is expected to be a major participant.

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