Injective is enhancing its tokenomics with a major upgrade that that will adjust supply based on staked INJ tokens.
Injective, a venture capital-backed Layer-1 blockchain, is stepping up its game with its latest milestone, the INJ 3.0 upgrade. This community approved upgrade aims to reshape its tokenomics and increase its resistance to inflation.
This pivotal transition has propelled the network’s native INJ $26.12 24h volatility: 12.1% Market cap: $2.55 B Vol. 24h: $343.48 M token to remarkable heights. The token surged to $26 to complement a six-day rally, reaching its highest level since December 18. Injective has bounced back 40% from its lowest point this year, highlighting the token’s growing momentum.
At the core of token’s rally lies the eagerly anticipated Injective 3.0 upgrade. This upgrade introduces a dynamic system that adjusts the token supply based on how much INJ is staked.
The governance proposal to begin the next phase of $INJ 3.0 has passed with 99.99% of community members voting YES.
The new chapter of INJ 3.0 is live now to dramatically reduce the token supply, enabling INJ to become one of the most deflationary assets over time. pic.twitter.com/YJNCQsIiD7
— Injective 🥷 (@injective) January 5, 2025
This makes the network more responsive and efficient in real time and resistant to inflationary pressures. With a focus on strengthening deflationary mechanisms, the upgrade is expected to boost the deflation rate by 400%.
For holders of INJ, this shift brings more than just a defense against inflation, it signals an exciting opportunity for higher staking rewards. As of now, Injective is offering a staking yield of 10.68%, with 56% of its token supply already staked.
This level of staking activity is a clear sign of growing confidence in the network’s long-term potential. In comparison, Ethereum offers a modest 3.13% return, while Solana and Sui yield 7.06% and 2.81%, respectively.
Injective’s price resurgence is not solely attributed to tokenomics. Its decentralized finance (DeFi) ecosystem has also seen significant growth. The Total Value Locked (TVL) within its network recently surpassed $55.95 million.
This marked its highest point since June 2024. This growth is largely driven by standout decentralized applications (dApps) such as Hydro, Helix, Neptune Finance, and DojoSwap. However, its stablecoin market remains relatively modest, with a capitalization of $30 million.
Technical indicators suggest continued bullish momentum for INJ. The token’s recovery, which began after bottoming out at $18.42 on December 16, has forced it to breach significant resistance levels. It moved past the key neckline resistance and Woodie pivot point at $23.80. The Percentage Price Oscillator (PPO) has crossed above the zero line, signaling strong positive momentum.
At the time of writing, INJ price was trading at $26.17, up by 12.37% in the last 24 hours as per market data. Buyers are now eyeing the first resistance level at $29, which aligns with the 61.8% Fibonacci retracement point at $28.87.
However, a drop below the $23.80 pivot point could invalidate this bullish trajectory, paving the way for further downside.
Despite its successes, Injective faces hurdles in attracting developers to its ecosystem. Competing Layer-1 and Layer-2 networks like Sui, Aptos, and Coinbase’s Base have managed to draw billions of dollars and substantial developer activity.
Injective’s backers, including billionaire investor Mark Cuban, remain optimistic, but addressing this developer gap remains critical for sustained growth. Injective’s upgrade is part of a larger trend where blockchain projects are improving their token systems to fight inflation and offer better rewards.
Similar efforts can be seen with projects like Terra, Cosmos, and Polkadot, which focus on flexible token supply and staking to increase long-term value. This shift aims to make networks more sustainable and attractive to users and investors. It highlights how crucial tokenomics is for growth and success in the competitive blockchain space.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
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Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
