Injective Launches INJ Supply Squeeze Proposal to Double Token Deflation

• Injective’s new proposal seeks to permanently increase the network’s rate of total supply reduction of the INJ token.
• Combined with the new Community BuyBack and reduced issuance, the token burn will contract supply in the long term and boost the INJ prices.

In a new proposal to its community, the Injective network is seeking to double the rate of inflation to reduce the supply of its IJN token. Dubbed the Supply Squeeze proposal, it would be the largest update to the network’s tokenomics and would make it one of the most deflationary cryptos in the market.

The Injective Improvement Proposal 617 (IIP 617) was submitted on Thursday, with a three-day voting period that ends on Jan. 19 at 7.00 pm UTC +3.

INJ has been deflationary for years through regular token burns. The network has, in recent times, allowed ecosystem apps to contribute directly to the burns; to date, nearly 7 million INJ tokens have been removed from circulation. The new proposal is seeking to turbocharge this mechanism and make Injective one of the most deflationary networks in crypto.

Injective to Double INJ Token Deflation

IIP 617 will permanently increase the rate of supply contraction by tightening issuance parameters.

“This framework prioritizes sustained participation while placing INJ on an accelerated path toward structural deflation,” the proposal states.

IIP 617 will work in tandem with the community buyback program, which has been channeling some of the revenue generated through fees to buybacks and burns.

The proposal has been well received by the community, most of whom have expressed support on social media channels. On the voting page, stakers holding 10 million INJ have participated already, with 99.96% voting yes, while a mere 0.04% voted against it. This support has pushed IIP 617 to meet the 33.4% quorum required for any proposal to be valid for consideration.

Injective’s community buyback program is already making waves. On Jan. 13, the community back spent $289,000 to purchase INJ tokens and permanently remove them from circulation.

As we reported, Injective published a report this week that identified tokenization as a $30 trillion opportunity. The network has continued to expand its tokenization projects, with 1.1 billion transactions settled and over $42 billion in cumulative on-chain trading volume processed.

INJ trades at $5.22, dipping 2.2% in the past day as trading volume sunk 38% to settle at $53.5 million in the past day.