Crypto Project Injective Approves Aggressive INJ Supply Reduction

Rather than reacting to short-term market weakness, the change rewires the protocol’s long-term economic engine.

A deliberate pivot toward scarcity

The vote, which passed with near-total consensus among staked participants, activates a new framework known as the Supply Squeeze. Instead of relying on steady token emissions to support the network, Injective is now leaning into a model that prioritizes scarcity.

The approved changes simultaneously slow the creation of new INJ and preserve the protocol’s automated buyback-and-burn system. Revenue generated by the network is used to purchase INJ on the open market and permanently destroy it, steadily reducing the number of tokens available to trade.

This dual approach shifts Injective away from inflation management and toward a structure where supply contraction becomes a recurring feature of the protocol.

Burns become a core economic lever

Token destruction is not new for Injective, but the scale and intent are now more explicit. Roughly 6.85 million INJ have already been removed from circulation, and the updated design accelerates that pace by ensuring fewer new tokens offset those burns.

In effect, issuance and destruction are now pulling in opposite directions, with the balance deliberately tilted toward net supply reduction. The team described the outcome as positioning INJ to evolve into a deeply deflationary asset over time, rather than relying on isolated burn events.

Price weakness sets the backdrop

The overhaul lands during a prolonged downturn for the token. INJ has struggled alongside the broader altcoin market, shedding close to 80% of its value over the past year and remaining more than 90% below its 2024 peak. On the day the proposal went live, the token slipped again, according to CoinGecko.

That context helps explain why the community has framed the vote as a structural reset rather than a price catalyst. The consensus among holders is that tighter supply mechanics are meant to support the network across future cycles, not engineer an immediate rebound.

A quieter DeFi footprint

Activity across Injective’s DeFi ecosystem reflects the same cooling trend seen across much of the sector. Total value locked currently sits below $20 million, a sharp contrast to levels above $60 million recorded during stronger market conditions last year, based on data from DefiLlama.

While lower TVL highlights reduced on-chain demand, the new tokenomics suggest Injective is prioritizing resilience and long-term alignment between network usage and token value.

By redesigning its token mechanics at a moment of market stress, Injective is signaling that it sees the current downturn as an opportunity to reset incentives – not something to paper over with temporary fixes.

The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.

The post Crypto Project Injective Approves Aggressive INJ Supply Reduction appeared first on Coindoo.