HYPE Faces 45% Supply Cut Proposal as Rival ASTER Steals Market Spotlight

Core Viewpoint - DBA Asset Management has proposed a 45% reduction in the supply of Hyperliquid's native token HYPE, aiming to enhance its attractiveness to investors and stakers by revoking unissued tokens and burning assets from the Assistance Fund [1][2]. Group 1: Supply Reduction Proposal - The proposal includes cutting 421 million HYPE from community rewards and 21 million from the Assistance Fund if approved by Hyperliquid's governance [2]. - DBA believes that the current market undervalues HYPE due to the fully diluted valuation metric, which includes unissued tokens [2]. Group 2: Community Reaction - Supporters argue that the community allocation is an undefined slush fund, while critics emphasize that emissions are crucial for growth and should not be eliminated [3]. - HYPE reached an all-time high of $59.30 before declining to $46.08 due to selling pressure [3]. Group 3: Market Competition - Aster has gained significant traction with a large DeFi airdrop, allocating 53.5% of its supply to the community, resulting in a total value locked (TVL) exceeding $1 billion [4]. - Aster has surpassed Hyperliquid in 24-hour DEX volume for three consecutive days, with a TVL of $1.39 billion shortly after its launch [4]. Group 4: Price Analysis - HYPE is currently priced at $48.78, consolidating after a pullback from near $60, testing resistance at its 20-day moving average of $52.38 [5]. - The token has support at $44.30, with potential for a move back above $60 if it reclaims the $52.38 level, while sustained trading below $44 could lead to a deeper correction towards $40 [5].