Injective community increases INJ's deflation by 400%

An Injective community on-chain vote approved changes to the INJ -1.41% 3.0 tokenomics system.

In what is considered the largest upgrade to Injective's tokenomics system, the move reduces the token's minting properties and adds new parameters to make INJ "one of the most deflationary assets in crypto," according to the April 19 governance proposal.

INJ is the native token of Injective, a Cosmos-based Layer 1 blockchain overseen by the non-profit Injective Foundation. The proposal increases INJ's deflation fourfold over the next two years.

"This is the next stage in Injective’s evolution; we’ve seen billions of dollars flow in since inception. To guarantee the ecosystem serves long-term as a peer to institutional players, INJ must function as ultrasound money — rewarding early adopters and attracting new participants," said Injective Foundation CEO Jenna Peterson in a statement. "With these vital updates approved through governance by the broader Injective community, INJ 3.0 aims for INJ to surpass even the sound monetary properties of Bitcoin."

The INJ 3.0 proposal

The INJ 3.0 tokenomics proposal introduced on April 19 has two main prongs.

The first is changes to INJ's upper and lower inflationary bounds. Upper and lower bounds in inflation describe the highest and lowest rate, respectively, that are deemed acceptable in an inflationary system. The proposed tokenomics changes for INJ 3.0 would lower the token's lower inflation bound to 4% and its upper bound to 7% incrementally over the next two years. In the second quarter of 2026, the project will reconsider its deflationary parameters.

The second prong is increasing "the inflation rate change parameter from 0.1 to 0.5 to increase its responsiveness to staking activity," the proposal adds.

"The proposal achieved an astounding 99.99% approval rate, serving as a powerful testament to the overwhelming desire within the community for this upgrade to pass," Eric Chen, CEO of Injective Labs, which is a core contributor to Injective, told The Block. "Along with the rest of the community, I look forward to seeing this new schedule in action."

INJ traded hands at $27.79 at 8:57 a.m. ET on April 23 after seeing a 1.94% decrease in the past 24 hours. INJ has a market capitalization of $2.5 billion, with a circulating supply of 90 million tokens out of a total supply of 100 million, according to The Block's price page for INJ.

The Injective Foundation launched Injective's Volan upgrade on Jan. 11. The update augmented modules focused on real-world assets such as tokenized fiat currency pairs, treasury bills, exclusive credit products and other structured products, The Block previously reported.

The crypto data tracker DeFiLlama shows that Injective has $62.7 million in total value locked as of April 22.