The Injective community has approved a significant governance proposal that will usher the INJ token into a more aggressive deflationary phase. This move aims to reduce the long-term supply of INJ and modify the network's token economics, making supply reduction a central design feature.
Details of the Approved Governance Proposal
A governance proposal focused on lowering the INJ token’s long-term supply and adjusting network token economics has been passed by the Injective community. The vote concluded on January 19th, with an overwhelming 99.89% of participating voters in favor. This approval enacts changes to Injective's inflation parameters, effectively placing INJ into a more pronounced deflationary phase.
Following the implementation of these changes, new token issuance will decrease at a more rapid pace, while existing burn mechanisms will continue to operate. Members of the Injective Foundation confirmed their involvement in the proposal, which was submitted under the designation IIP-617.
Impact of the Approved Changes on INJ Supply
INJ functions as the primary asset for securing the Injective network and coordinating activities across its diverse ecosystem. Since the mainnet launch, Injective has consistently employed recurring token burns to permanently remove INJ from circulation. As of the submission of this proposal, approximately 6.85 million INJ tokens had already been burned.
The newly ratified framework modifies issuance rules to further restrict the influx of new supply into the market. This adjustment works in conjunction with the Injective Community BuyBack program. This program utilizes revenue generated by the ecosystem to purchase INJ on the open market, subsequently burning it on a regular basis.
This proposal does not introduce a new buyback program. Instead, it intensifies the existing deflationary pressure by directly reducing issuance at the protocol level. This strategic approach builds upon previous updates. Earlier INJ 3.0 updates laid the foundational groundwork for these changes. In 2024, governance approved IIP-392 with nearly unanimous support, which increased deflation by 400% and linked policy adjustments to staking levels.
A year later, further modifications were made to align supply reductions with Bitcoin's halving cycle, extending the contraction period over several years. The recently approved proposal serves to further tighten these existing settings. The core team at Injective has positioned this change as a method to embed deflation directly into the system's architecture, reducing reliance on market conditions or network usage levels.
Market Reaction and Critical Perspectives
Despite these significant supply-side adjustments, the price action for INJ has not yet shown a clear, direct correlation. INJ has experienced considerable volatility throughout 2025 and into early 2026, and remains approximately 75% down compared to its value a year ago. This market reality has led some traders to adopt a cautious stance, even with the implementation of sharper supply cuts.
With multiple deflationary mechanisms now concurrently active, Injective is actively steering INJ towards a more supply-restricted profile. However, at present, price movements appear to be more influenced by broader cryptocurrency market sentiment than by the token's intrinsic mechanics alone.