Controversial Hyperliquid HIP-5 Proposal Leaves Community Split

Why It Matters

If adopted, HIP‑5 would reshape Hyperliquid’s fee‑distribution model, influencing token economics and governance while potentially accelerating ecosystem development—or exposing the platform to new governance risks.

Summary

The Hyperliquid community is debating HIP‑5, a proposal to create a second assistance fund (AF2) that would allocate up to 5 % of protocol fees to purchase tokens of approved ecosystem projects such as PURR, Kinetiq and Felix. Currently 99 % of revenue funds a buy‑back of HYPE tokens; HIP‑5 would divert a slice of that revenue to support third‑party projects. The plan has split opinion: critics warn it could enable bribery and serve as exit liquidity for early investors, while supporters argue it will spur builder activity and add utility to the HYPE token. The proposal would be governed by HYPE stakers who would vote on which tokens to acquire and in what quantities.