Core Insights - Hyperliquid, a decentralized crypto derivatives exchange, has proposed a governance vote to remove approximately $1 billion worth of HYPE tokens from circulation following a significant price crash [1][6]. Company Overview - Hyperliquid operates as a decentralized perpetual futures exchange, allowing traders to leverage crypto assets for long or short positions. It utilizes a fully on-chain order book on its custom Layer-1 blockchain, aiming for execution speeds comparable to centralized exchanges while maintaining self-custody [2]. - The exchange has gained popularity among high-frequency traders and large market participants due to its low fees, deep liquidity on major trading pairs, and transparent liquidation and funding-rate mechanics. It is a fully permissionless derivatives platform, not requiring Know Your Customer (KYC) checks [3]. Market Performance - The HYPE token was launched on November 29, 2024, through a genesis airdrop, distributing approximately 310 million tokens, which is about 31% of its capped supply of 1 billion, without private investor allocations [4]. - On December 9, HYPE experienced a price drop of over 4% in 24 hours, continuing a trend where the token lost roughly 20% of its value over the preceding week. As of December 17, HYPE had declined by 26.9% in the past month and 52.8% in the past three months, although it had increased by 7.1% year-to-date, trading at $27.42 at the time [5]. Token Burning Proposal - The Hyper Foundation has proposed a token burning initiative in response to the significant decline in HYPE's market price, which was part of a broader sell-off affecting several high-profile crypto assets. The proposal suggests that tokens held in the protocol's Assistance Fund be recognized as permanently burned [6][7].