Injective Passes Vote to Cut INJ Supply and Boost Deflation

• Injective passed IIP-617 with 99.89% support, shifting INJ into a more aggressive deflation phase.
• The update accelerates new issuance reduction while maintaining token burns and buyback-based burns.
• INJ remains volatile and has declined sharply year over year, indicating that sentiment still outweighs token mechanics in the short term.

The Injective community has approved a governance proposal that reshapes the network’s token economics and pushes INJ into a more aggressive deflationary phase. The vote, submitted as IIP-617, concluded on Jan. 19 after four days and passed with overwhelming support, signaling strong alignment among participating token holders.

According to the results, 99.89% of voters backed the proposal. The update alters certain inflation rates for Injective and speeds up the reduction in new token emissions. When this deployment is live, Injective will emit new INJ tokens at a slower rate but retain other mechanisms for burning INJ in circulation.

The proposal marks another major step in Injective’s long-running strategy to treat supply reduction as a core design feature rather than a market-driven outcome.

What changes under IIP-617

INJ plays a central role inside the Injective ecosystem. It secures the network through staking, supports governance participation, and acts as the key asset that coordinates activity across the chain’s DeFi and trading products.

Since its mainnet launch, Injective has relied on recurring token burns to permanently remove INJ from circulation. Until now, it has burnt approximately 6.85 million INJ, which has helped to limit supply and further promote the idea of deflation for this project.

A new burn or buy-back mechanism has not been added by IIP-617 but has further reduced the issuance mechanism that already exists in the protocol. In effect, Injective now combines two supply controls: direct issuance reduction and ongoing burn activity.

The proposal also keeps the Injective Community BuyBack program intact. That initiative uses ecosystem-generated revenue to purchase INJ on the open market and burn it repeatedly. Rather than replacing this program, IIP-617 makes it more effective by ensuring fewer new tokens offset the burns.

Earlier upgrades prepared the groundwork

This approach in the sector has undergone some transformations as there have been various upgrade levels. Injective has, in the past, brought levels of policy change in its INJ 3.0 roadmap, as well as utilized governance in constraining the sector’s supply dynamics.

Instead, in 2024, the community collectively passed IIP-392 almost uniformly. This upgrade strengthened deflation by 400% and also made it more related to staking participation. The idea was simple, and it aimed at ensuring the supply behavior of the network dynamically changed according to the network conditions.

After that, in 2025, Injective introduced another factor by associating a reduction in supply planning with the halving cycle of Bitcoin. Now, Injective reduces these factors even further through IIP-617 by speeding up the reduction in issuance. The goal is to create a more structural deflation.

Members of the Injective Foundation also revealed their involvement in the process, shedding more light on how core contributors participated in the proposal.

Market reaction stays mixed

Despite the increased levels of deflation, it is still not linear with respect to INJ’s performance on the market. INJ has been volatile on the market from 2025 to 2026. INJ is still down 75% from last year, and this is giving investors reasons to be cautious despite the improved tokenomics.

Such a price dynamic highlights another evident truth about cryptocurrency markets: supply mechanisms are important but tend to be driven more by market sentiment on a shorter timeline. Market liquidity cycles and overall Bitcoin sentiment continue to be more influential for INJ than simple token burning events.

However, the move is definitely a significant indicator. Injective is setting itself for a further supply-constrained environment, and it is doing it through the means of governance and not through marketing packages. Now, with two deflationary mechanisms in place, it is clear that the network is trying to ensure that INJ is made even rarer in the long run. Whether the price will show the effects of it or not is to be seen.

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