The next stage of Kinetiq requires more than incremental improvements. It requires foundational changes to how value flows through the protocol.

KIP-5 redirects every KNTQ purchased through Kinetiq’s buyback programs to the Hyperliquid Assistance Fund.

Until now, purchased KNTQ was distributed to sKNTQ stakers. Effective immediately, future purchases will instead be sent to the Hyperliquid Assistance Fund at 0xfefefefefefefefefefefefefefefefefefefefe, effectively removing those tokens from usable supply.

The buyback engine is not changing.

The destination is.

Kinetiq is moving from staker-exclusive buyback yield to protocol-wide scarcity.

Key takeaways

• All KNTQ purchased through protocol-funded buybacks will now be sent to the Hyperliquid Assistance Fund.
• Kinetiq has already purchased 5,391,458 KNTQ at an average price of $0.15.
• That represents roughly 0.53% of total supply and 2.15% of circulating supply.
• Buybacks previously generated approximately 13% APY for sKNTQ holders.
• KIP-5 keeps the recurring buy pressure while making the acquired tokens permanently unavailable to the market.

What KIP-5 changes

The previous system was simple:

Protocol revenue → KNTQ buybacks → sKNTQ stakers

KIP-5 changes the final step:

Protocol revenue → KNTQ buybacks → Hyperliquid Assistance Fund

That distinction is important.

Previously, KNTQ purchased by the protocol eventually ended up in the hands of stakers. The buyback created demand, but the tokens remained economically active.

Under KIP-5, the buyback still creates the same open-market demand, but the purchased KNTQ is sent to a permanent system address instead.

More than 5.39M KNTQ already purchased

This is not a new buyback program.

Kinetiq has been programmatically purchasing KNTQ using protocol revenue for the last five months.

So far:

• 5,391,458 KNTQ purchased
• $0.15 average purchase price
• ~0.53% of total supply
• ~2.15% of circulating supply

Under the previous system, those purchases generated approximately 13% APY for sKNTQ stakers, with more than 33% of circulating KNTQ staked.

KIP-5 changes how that value is distributed going forward.

Instead of rewarding only the staked portion of supply, every future buyback reduces the amount of KNTQ that can remain in active circulation.

Why make the change now?

Kinetiq is becoming a much larger economic system.

Its value accrual is increasingly tied not only to liquid staking, but also to products such as Markets and Elysium.

That changes the scale of the opportunity.

If those products generate significantly more revenue, the amount of capital available for programmatic KNTQ purchases can grow with them.

At that point, where those purchased tokens go becomes increasingly important.

KIP-5 establishes the rule before that expansion happens: protocol-generated buybacks permanently reduce usable KNTQ supply.

The trade-off

There is one clear cost.

sKNTQ stakers will no longer receive the buyback-funded yield that previously produced approximately 13% APY.

That was a direct and visible incentive to stake.

KIP-5 replaces it with a less direct mechanism: permanent supply reduction that benefits all KNTQ holders rather than only stakers.

This creates a cleaner link between protocol growth and token scarcity.

Following the Hyperliquid model

The design follows the same principle used by Hyperliquid.

The Hyperliquid Assistance Fund accumulates assets at: 0xfefefefefefefefefefefefefefefefefefefefe

Kinetiq will now send all KNTQ acquired through protocol buybacks to that same system address.

The balance can be tracked publicly.

This makes the mechanism transparent and easy to verify onchain.

The bottom line

KIP-5 does not change Kinetiq’s buyback engine.

It changes who captures the result.

Before KIP-5, protocol revenue purchased KNTQ and distributed it to stakers.

Now, protocol revenue purchases KNTQ and permanently removes it from usable supply.

More than 5.39M KNTQ has already been purchased under the existing program. As Kinetiq expands through Markets, Elysium, and the rest of its product suite, the same mechanism can scale alongside protocol revenue.

Less circulating supply.

Broader alignment.

One programmatic destination for every future KNTQ buyback.

Enter KIP-5.

FAQ

What is KIP-5?

KIP-5 redirects all future KNTQ purchased through Kinetiq’s protocol-funded buybacks to the Hyperliquid Assistance Fund.

Previously, purchased KNTQ was distributed to sKNTQ stakers.

Does KIP-5 end sKNTQ?

No.

KIP-5 changes the destination of protocol buybacks. It does not remove sKNTQ or its utility within the Kinetiq ecosystem.

Will sKNTQ continue earning the historical 13% APY?

The approximately 13% figure came purely from buyback distributions.

Because future purchased KNTQ will instead be sent to the Assistance Fund, that buyback-funded APY should not be considered forward yield.

Is sending KNTQ to the Assistance Fund a burn?

Yes.

Sources

• Kinetiq: KIP-5 announcement, September 15, 2026
• Hyperliquid Assistance Fund on HypurrScan