Hyperliquid executed one of its largest token burns on October 3rd after the protocol generated significant revenue through its newly activated AQAv2 framework. The protocol purchased and burned 112.58K HYPE tokens valued at $10.15 million, with an additional $4.4 million remaining in funds allocated for future buybacks and burns.
The AQAv2 framework, which launched in August, directs 90% of interest earned on idle USDC held on the platform back to the protocol. Since activation, these funds have been accumulated and automatically routed to the Assistance Fund on a 30-day cycle. The first distribution on October 3rd delivered $14.5 million in USDC to the protocol, which was subsequently deployed for the token burn.
Market Response
HYPE responded positively to the deflationary action and revenue announcement. The token surpassed the $91 resistance level and climbed to $93.7, recovering losses incurred earlier in October. At the time of reporting, HYPE traded around $93.4, up 3.5% on the daily timeframe with trading volume rising 52%.
Technical indicators reflected strengthened bullish momentum. The Relative Strength Index formed a bullish crossover and reached 59, while the Relative Vigor Index also formed a bullish crossover, signaling renewed buying pressure.
Challenges Ahead
Despite the positive momentum, the market faced headwinds from investor profit-taking. Exchange inflows surged to $4.3 million on October 5th as investors moved tokens to spot markets to cash out recent gains. This selling pressure could present an obstacle to further price appreciation and potentially reverse the upward move.
