Injective's protocol community overwhelmingly approved a significant tokenomics overhaul on Monday, with a governance proposal passing with 99.89% support based on staked voting power.
Injective is a layer-1 blockchain specifically designed for decentralized finance applications. Its native token, INJ, is utilized for staking, governance, and covering transaction fees.
The governance proposal, known as the "Supply Squeeze" (IIP-617), aims to reduce the native token's issuance while continuing the network's buyback-and-burn program. This program uses revenue generated by the protocol to permanently remove tokens from circulation.
The Injective network has reported removing approximately 6.85 million INJ tokens from circulation through these burn mechanisms. The newly approved proposal is intended to accelerate this token removal process by synchronizing reduced issuance with ongoing buyback activities.
According to an announcement made by Injective on X (formerly Twitter) on Monday, these governance changes, which are now active, are expected to position INJ as "one of the most deflationary assets over time."
This governance vote comes after a period of sustained downturn in INJ's market price, occurring amidst a broader sell-off in altcoins. Over the past year, INJ has experienced a decline of nearly 80%, and it is down more than 90% from its all-time high reached in March 2024. Data from CoinGecko indicated that the token was down approximately 8% on Monday.
Community responses on X following the vote were largely optimistic. Users generally viewed the changes as a fundamental structural shift for the protocol rather than a short-term market catalyst.
Data from DefiLlama shows that at the time of writing, Injective had $18.67 million in total value locked (TVL) across its decentralized finance ecosystem. This figure represents a significant decrease from its peak levels, which exceeded $60 million in 2024.
Injective Sees Continued Institutional Engagement Amidst Market Trends
Despite the recent declines in INJ's price and the network's total value locked, Injective has continued to attract institutional interest throughout 2025. This engagement spans various areas, including regulated investment products, validator participation, and the introduction of new financial market offerings.
In July, both Cboe and Canary Capital submitted regulatory applications for a staked Injective exchange-traded fund (ETF). Each application sought approval to list a fund designed to hold and stake INJ tokens, aiming to generate rewards through an "approved staking platform."
Furthermore, Injective continues to expand its network of validators. In February, Deutsche Telekom MMS, the IT services subsidiary of Deutsche Telekom, joined the Injective network as a validator.
More recently, Korea University became the first academic institution to operate a validator on the Injective network. The university will also conduct on-chain research as part of this collaboration, according to an announcement made on Wednesday.