Why Hyperliquid Should Cut Its Total Token Supply Nearly in Half - Ep. 909

In this episode of Unchained, Laura Shin interviews Jon Charbonneau, co-founder and general partner of DBA, about a proposal to reduce Hyperliquid (HYPE) supply by 45%. Jon explains the problem the proposal aims to solve: the discrepancy between market cap, fully diluted valuation (FDV), and the actual relevant metrics for investors. He details the proposal, which targets tokens authorized for circulation but not outstanding, specifically the assistance fund and future emissions/community rewards (FECR). The proposal suggests burning the HYPE in the assistance fund and removing authorization for FECR tokens, changing the accounting without altering the controls. They also discuss removing the max supply cap, comparing it to Bitcoin's model versus Ethereum's. Jon addresses concerns about the assistance fund's role as a safety net and suggests using stable assets instead of HYPE. He recommends investors focus on an adjusted market cap that includes tokens with known ownership and plans for entering supply. The conversation touches on reactions to the proposal, including Hasib Qureshi's comments on community allocations and Evan Van Ness's suggestion to reduce team tokens. Finally, they discuss a Maelstrom post about team unlocks and potential market impact, and Jon shares his thoughts on how the proposal's decision will be made, including the potential use of FutureKey for market prediction.