#Injective 📉🎯
Injective’s “Supply Squeeze” Proposal Passes, Aims for Major Deflation 🔥
The
$INJ community has voted overwhelmingly to implement a major upgrade to its tokenomics. The proposal, known as the “Supply Squeeze,” passed with 99.89% approval.
This change introduces a dual-action mechanism designed to make INJ one of the most deflationary crypto assets.
Key Changes to INJ Tokenomics:
· Reduced New Issuance: The protocol’s annual inflation rate (which previously ranged between 5%-10%) will be significantly tightened.
· Accelerated Burns: The existing mechanism that uses protocol revenue to buy back and burn INJ tokens will be enhanced. To date, approximately 6.85 million INJ tokens have already been burned.
Goal: The dual approach aims to dramatically reduce the net supply of INJ over time, creating artificial scarcity. The intent is to structurally align token value with the growth of the Injective ecosystem.
Market Context & Analyst Views:
While the long-term structural change is seen as bullish,analysts caution that token price is influenced by many factors.
· Current Price Action: Following the announcement, INJ saw a brief rally but has largely traded in line with broader market sentiment, which recently turned negative. As of recent analysis, it is trading around $4.84, showing a modest 2% gain.
· Success Condition: Analysts note that the effectiveness of the burn mechanism depends entirely on sustained network activity and protocol revenue. If on-chain usage declines, the deflationary pressure would weaken.
· Broader Trend: Token buybacks and burns are an established trend in Web3, used by protocols like Aave, Jupiter (JUP), and Hyperliquid (HYPE) to manage supply and accrue value.
What’s Next?
The community’s decisive vote signals strong alignment on a long-term,scarcity-driven model. The focus now shifts to execution: monitoring the actual rate of token burns and whether growing on-chain demand can fuel the intended deflationary virtuous cycle.
#FOMCMeeting $INJ