Injective community governance vote passed, ushering in a new phase of INJ token deflation

Recently, the Injective Protocol community approved a governance proposal called IIP-617 with an overwhelming support rate of 99.89%, marking the start of a substantive deflationary phase for the INJ token economy model. This “supply tightening” proposal aims to accelerate the reduction of INJ’s market circulation by decreasing new token issuance and strengthening the protocol’s revenue-based buyback and burn mechanism.

Governance Consensus

The Injective community recently demonstrated strong consensus power, with a governance proposal codenamed IIP-617 receiving nearly unanimous support. On-chain voting data shows that, based on staked voting rights, the proposal received 99.89% approval. This overwhelming majority reflects broad community approval for the token economic model reform.

The core of the proposal is to adjust INJ’s issuance parameters while maintaining and optimizing the existing buyback and burn mechanisms. This combined approach aims to systematically reduce the circulating supply of tokens.

Currently, the Injective network has removed approximately 6.85 million INJ tokens through the burn mechanism. Once the new rules take effect, this process is expected to accelerate further.

Mechanism Analysis

Injective’s “supply tightening” plan is a dual strategy: on one hand, reducing the issuance rate of new tokens; on the other, continuously conducting market buybacks and burns using the protocol’s own revenue. This mechanism design directly links the protocol’s success with the scarcity of the token — as the usage of the Injective ecosystem increases, protocol revenue rises, and the funds used for buyback and burn of INJ also increase accordingly, creating a positive feedback loop.

From a technical perspective, Injective is a layer-one blockchain focused on decentralized finance applications, with INJ serving as its native token, fulfilling multiple functions such as staking, governance, and paying transaction fees. The new token economic model makes INJ more deflationary. Over time, the reduction in circulating supply could have a structural impact on the token’s value.

Ecosystem

Despite the price and total value locked (TVL) facing market pressures, Injective continues to attract institutional participation and technological collaborations into 2025. Cboe and Canary Capital have submitted regulatory applications for staking-based Injective exchange-traded funds (ETFs). These funds aim to hold and stake INJ through “approved staking platforms” to generate yields. Regarding validator network expansion, Deutsche Telekom MMS, a subsidiary of German Telecom, joined as a network validator in February.

Recently, a Korean university became the first academic institution to run a validation node on the network and conduct on-chain research, demonstrating Injective’s expanding influence in academia.

AI and DeFi Integration

Injective is actively promoting the integration of artificial intelligence and decentralized finance. The network has activated cross-chain communication channels with the Artificial Superintelligence Alliance (ASI). This collaboration combines Injective’s DeFi capabilities with ASI’s advanced AI technology, opening new possibilities for users and developers. With the activation of the IBC channel, Injective users can now access the native tokens of the ASI alliance through its decentralized applications and integrate complex AI and autonomous agent functions into the DeFi ecosystem.

Meanwhile, the partnership with OpenLedger enables verifiable autonomous AI actions, effectively connecting off-chain reasoning with on-chain DeFi execution. This integration allows AI not only to analyze market data but also to directly execute trading decisions within DeFi markets.

Price Performance Analysis

As of January 20, 2026, according to Gate data, the latest price of Injective (INJ) is $4.80, with a 24-hour trading volume of approximately $925,600. The current market cap is about $481 million, with a market share of 0.014%, and overall market sentiment remains neutral.

In the short term, INJ has increased slightly by 2.86% over the past 24 hours, indicating some price resilience amid overall market volatility. However, over the past 7 days, its price has decreased by 5.79%, reflecting cautious investor sentiment and no clear short-term rebound trend.

In the medium term, INJ has gained 1.65% over the past 30 days, showing relatively stable performance; but over the long term, its price has declined by 76.75% in the past year. Compared to the all-time high of $52.62 recorded in March 2024, the current price has retraced significantly. This performance aligns with the broader market environment of valuation compression and liquidity tightening in the past year for altcoins.

From a supply structure perspective, Injective currently has a circulating supply and total supply of 100 million INJ tokens, with market cap equal to the fully diluted market cap, and a circulation rate of 100%. The maximum supply is not capped, making the token’s economic model and governance mechanisms particularly critical for long-term value capture.

Based on Gate platform data, the current market status of INJ can be summarized as follows:

• Short-term price: +2.86% in 24 hours, but still in a correction phase over 7 days, with evident short-term bullish-bearish battles
• Long-term market context: down over 76% in one year, still in deep valuation recovery
• Liquidity level: less than $100,000 in 24-hour trading volume, indicating low market activity
• Supply structure: fully diluted supply, with inflation and governance mechanisms playing a significant role in long-term price influence
• Market sentiment: neutral, with no clear signs of risk appetite revival

Overall, Injective (INJ) currently exhibits a rebound within an undervalued zone. Short-term prices are mainly driven by overall market sentiment and liquidity changes, while the medium- and long-term trend depends on ecosystem activity recovery, growth of DeFi applications, and ongoing optimization of the token economic model. Until a clear market reversal occurs, investors are advised to remain cautious, monitor trading volume, and on-chain fundamentals dynamically.

As of January 20, 2026, INJ’s trading price on Gate is approximately $4.80. This layer-one blockchain, incubated by Binance and supported by Pantera Capital and Jump Crypto, is undergoing a fundamental transformation of its token economic model. With traditional institutional participants like Deutsche Telekom and Korean universities joining the validator network, and financial institutions like Cboe showing interest in INJ staking ETFs, the foundation of the Injective ecosystem is diversifying. On-chain governance voting not only alters INJ’s issuance curve but also signifies the maturity of decentralized finance projects — the community can coordinate actions to rationally adjust core economic parameters, paving the way for long-term development.