Bullish: New Injective Governance Vote Could Slash $INJ Supply By Half

• Governance proposal IIP-617 on the Injective network passed with 99.89% support.
• This proposal could reduce the INJ token supply and boost buybacks to further shrink it.
• Despite market dips, Injective is attracting major partners like Deutsche Telekom and Korea University.

The Injective community recently approved a plan to slash the Injective token supply. This governance vote stands as a major change in how the network manages its native token. 

Backers of the governance vote hope that by reducing the number of new tokens entering the market and increasing the rate at which existing ones are destroyed, price stability could enter the picture.

The New Injective Token Supply Management

The passing of proposal IIP-617 (often called the Supply Squeeze) is expected to change some of the major rules controlling how many INJ tokens are created.

This is important because before this vote, the network used a more traditional schedule for issuance. Now, however, the protocol will tighten those numbers and hopefully make INJ one of the most deflationary assets in the blockchain space.

Notably, validators and stakers were strongly united during this process, as nearly 100% of voters backed the change. 

Strengthening the Buyback and Burn Program

A major part of this new system involves the Community BuyBack program. This is expected to take some of the revenue generated by the network and buy more INJ from the open market. 

Once these tokens are purchased, they will then be permanently “burned” or removed from circulation. This process ensures the asset continues to shrink in supply over time rather than growing indefinitely.

The network has already proven that this model works. 

Since its launch, Injective has burned about $6.85 million, and the new rules will speed up this pace. 

Some Market Challenges

This new governance vote is also interesting because it occurred during a difficult period for altcoins.

Over the past year, the market price of INJ has declined, and now sits well below its all-time highs. Market data from CoinGecko shows that the token struggled to maintain its footing even after the vote passed.

Even worse, the price dipped roughly 10% alongside the rest of the market after the announcement.

Activity on the blockchain has also cooled down somewhat. Total value locked (TVL) on Injective is currently at around $18.67 million, and this is a noticeable decline from its previous highs above $60 million. 

However, community members on social media seem optimistic, as many view these changes for their long-term benefit.

In any case, fixing the supply dynamics now will pay off sooner or later, when market interest returns.

Growth in Institutional Support and Security

While the price is still struggling, Injective continues to grow its professional network. 

The protocol has recently added several major validators to help secure the chain, including Deutsche Telekom MMS and even Korea University. 

These additions show that despite the price slowdown, serious organisations are still interested in the technology behind Injective.

So far, traders are keeping an eye on the $4.50 support level because the charts show that, despite the overall trend being bearish, the asset is stabilising. 

The Relative Strength Index shows that the token is not yet in oversold territory, which means that there is room for movement in either direction.

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