Recently, Injective has introduced an ultimate upgrade to it’s tokenomics, called INJ 3.0 aiming to transform INJ to one of the most deflationary asset in the blockchain industry.
After the successfully passing the IIP-392 Governance proposal with an record approval rate of 99.99%, INJ 3.0 was implemented on Injective Mainnet at 23rd of April.
Background — INJ 2.0 Upgrade
INJ is the native asset of injective network, serving as the backbone of the injective ecosystem, encompassing a wide array of utilities including governance, protocol fees, and security mechanism through Tendermint PoS consensus and beyond.
INJ has always been unique when it comes to tokenomics.
Injective carries out a weekly burning auction which can’t be found in any other assets in the industry
Last year, Injective has released INJ 2.0 upgrade further expanding this burning mechanism to include all dApp network fees, resulting a substantial increase in the amount of INJ burned weekly.
The All new INJ 3.0 Upgrade
As the fastest L1 network built for finance continues to expand day by day, and as more developers choose the Injective network as the home for their DeFi products, so too should the weekly burn mechanism be enhanced.
The Injective community casted an overwhelming 99.99% vote in favor of IIP-392 to launch INJ 3.0 on Mainnet. The upgrade aims to reduce the supply of INJ over the next two years, with steadily increasing deflation rates based on the proportion of INJ staked on-chain.
“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, 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.”
— Jenna Peterson, CEO of the Injective Foundation
Deflationary Rate
By increasing the rate of deflation by 400%, Injective aims to become the most deflationary asset in the network by drastically reducing the supply over the next couple of years. This reduction will follow an accelerated yet tightly controlled schedule to protect against inflation.
- Lower Bound: Currently set at 5%, but will decrease 25% over a period of two years on a uniform quarterly basis.
- Upper Bound: Currently set at 10%, but will decrease 30% over the same two-year period.
- Schedule by quarter end, 2024–2026+
Conclusion
So it’s clear that Injective is going to be even more deflationary by increasing the burning rates while protecting the asset against inflation and ensuring the future sustainability of the network and its early adopters.
In general, while external market conditions and broader economic factors will ultimately impact the token’s value, the steady decrease in supply is positioned to fundamentally bolster the market position of INJ tokens, potentially resulting in sustained price increase and heightened investor interest.
