*Market cap and rank vary by tracker due to different circulating supply methodologies. Data from CoinMarketCap, CoinGecko & Alternative.me as of Dec 24, 2025. Verify before trading.
Something significant just happened in the decentralized exchange space. Today, December 24, 2025, Hyperliquid validators voted to permanently burn approximately $1 billion worth of HYPE tokens. With 85% voting yes (7% no, 8% abstaining), roughly 37 million tokens will never circulate again. That represents approximately 14-16% of the circulating supply, depending on which tracker's methodology you use.
Yet the price barely moved. HYPE sits around $24, down roughly 59% from its September all-time high of $59.39. The market is in extreme fear (Fear & Greed Index: 24). Most traders are focused elsewhere. But Freya has been tracking something interesting: whales are quietly accumulating while everyone else panics.
This article breaks down what the burn means, what whale activity reveals, the key price levels to watch, and the risks that could derail everything. Whether you are bullish or bearish, the data deserves your attention.
Who this is for: DeFi traders tracking the perpetual DEX wars, anyone interested in deflationary tokenomics, and traders looking for asymmetric setups in a fearful market.
Hyperliquid is a decentralized perpetual futures exchange built on its own Layer 1 blockchain. Think of it as "on-chain Binance" but without KYC, usernames, or centralized control. The platform launched in 2023 and quickly became a dominant force in decentralized derivatives trading.
What makes Hyperliquid unique is its fully on-chain order book. Most DEXs use off-chain matching to handle speed requirements. Hyperliquid built custom infrastructure (HyperBFT consensus) that claims very high throughput (often cited up to 200k TPS, with trackers describing support for around 100k orders per second). Zero gas fees for trading. Leverage up to 50x on many pairs. Real institutional-grade performance.
The platform raised zero venture capital. When HYPE launched in November 2024, 31% of the supply (310 million tokens) was airdropped directly to users. No VC allocations. No private sales. This community-first approach created one of the most successful airdrops in crypto history, distributing approximately $1.6 billion in value on day one.
Our market intelligence system flagged several significant signals around HYPE over the past week. The combination of whale accumulation during a fear-driven market deserves attention. Note: The following whale data is from Freya's internal telemetry and monitoring systems.
Freya observed two whales depositing $5M USDC each into Hyperliquid specifically to buy HYPE. One wallet now holds 214,497 HYPE (~$5.44M) with an additional $5.52M USDC ready to deploy. Another holds 102,460 HYPE (~$2.61M) with $2.45M USDC on the sidelines.
Freya also detected a separate trader opening a 10x leveraged long on 207,497 HYPE (~$4.72M). That is real conviction with real risk. When big players take leveraged positions during extreme fear, the asymmetry catches our attention.
The Hyper Foundation proposed burning all HYPE in the Assistance Fund. Validators voted via stake-weighted consensus, concluding at 04:00 UTC today:
The ~37M HYPE tokens were in a system address with no private key. They were already inaccessible without a hard fork. This vote creates binding social consensus: they are now permanently burned, removed from both circulating and total supply calculations.
Hyperliquid is widely described as using approximately 97% of trading fees to buy back HYPE. With the burn now official, those buybacks reduce supply permanently rather than accumulating in a fund. This creates a self-reinforcing deflationary loop: more trading volume equals more buybacks equals less supply. The question is whether demand can outpace the monthly unlock schedule.
The burn is bullish for tokenomics, but significant risks remain. Here is what you need to consider:
| Risk Factor | Level | Details |
|---|---|---|
| Monthly Token Unlocks | HIGH | ~9.9M HYPE (around $236M at current prices) unlocks monthly through 2027. That is roughly 23.8% of supply vesting over two years. Analysts warn this could outpace buyback capacity. |
| Competition from Aster | HIGH | Binance-backed Aster briefly captured ~70% of trading volume in September. While Hyperliquid still leads in open interest (~63%), market share erosion is real and ongoing. |
| High Leverage Liquidations | MEDIUM | Recent reports indicate significant whale losses on HYPE positions. Freya observed a large long position (~$12.5M) with liquidation around $22. Cascading liquidations could push price below support. |
| BTC Correlation Risk | MEDIUM | If BTC breaks down hard, altcoins like HYPE will follow. The macro environment (Fear & Greed at 24) suggests caution across risk assets. |
Here is what the charts are showing:
Click chart to view full size
Analysts note that if HYPE breaks below $22.27 (Fibonacci swing low), further liquidations could cascade. The $21 level is described as the critical breakdown point. A bullish breakout above $36 (falling wedge resistance) could force short squeezes, but failure to hold support risks accelerated selling.
With the burn approved, all future trading fee buybacks permanently reduce supply. Hyperliquid is reported to use approximately 97% of fees for buybacks. This creates ongoing deflationary pressure as long as trading volume remains strong.
Over 100 protocols are now deployed on HyperEVM, with TVL exceeding $2 billion. HyperLend (decentralized lending) has reached significant TVL. More applications means more fee generation and buyback fuel.
Users are farming points and yields on various HyperEVM protocols, speculating on future airdrops. This activity requires buying, staking, and "looping" HYPE tokens, adding demand.
Watch the $22.27 Fibonacci swing low. A bounce from this level with volume could signal accumulation completing. Consider scaling in on tests of support with stops below $21. The $27 rejection needs to break for momentum to shift bullish.
The burn creates a structural change in tokenomics. Consider building a position on significant pullbacks toward $20-22 if you believe trading volume will continue. However, factor in monthly unlocks as persistent headwind. This is a 6-12 month thesis, not a quick trade.
The $21-$22 support zone offers bounce plays. The $27 resistance provides rejection shorts. Be aware of large leveraged positions that could accelerate moves in either direction. Size down and respect your stops.
The ~37M HYPE tokens in Hyperliquid's Assistance Fund are now officially recognized as burned via binding social consensus. They were already in a system address with no private key (inaccessible), but this vote makes it permanent. The protocol has committed to never unlocking them via hard fork. This removes roughly 14-16% of circulating supply (depending on tracker methodology), making HYPE more scarce.
Markets are forward-looking. The burn was proposed on December 16 and widely expected to pass. Much of the "bullish news" was already priced in. Additionally, the broader crypto market is in extreme fear (Fear & Greed Index: 24), suppressing risk appetite across all assets. The burn improves long-term tokenomics but does not change short-term sentiment.
Hyperliquid claims performance approaching CEX levels (high TPS, sub-second finality) but operates fully on-chain. No KYC, no centralized custody. It has reached notable percentages of Binance's derivatives volume at peak periods. The trade-off is less liquidity on some pairs and no fiat on-ramps. For traders prioritizing self-custody and decentralization, it offers a compelling alternative.
Monthly unlocks of ~9.9M HYPE (around $236M at current prices) continue through 2027. If trading volume declines or competition from Aster/Lighter intensifies, buybacks may not offset selling pressure. Additionally, regulatory uncertainty around no-KYC exchanges could impact user growth. The burn helps, but these structural risks remain.
Freya monitors on-chain deposits, position sizes, and liquidation levels across major platforms including Hyperliquid. When significant USDC deposits occur specifically to buy HYPE, or when large leveraged positions open, Freya flags these in real-time. This is internal telemetry from our monitoring systems, allowing you to see what big players are doing before it shows up in price.
Freya monitors markets 24/7 and delivers insights like these directly to your Telegram. Whale movements, liquidation levels, and actionable price targets.
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This article is for informational purposes only and does not constitute financial advice. Cryptocurrency trading involves substantial risk of loss. Past performance does not guarantee future results. The price data, whale activity analysis, and technical levels presented are based on available information at time of publication and may change rapidly. Whale activity data referenced as "Freya detected" is from internal monitoring systems and should not be considered verified public blockchain data. Always do your own research and consider your financial situation before making investment decisions. Never invest more than you can afford to lose.
