Introducing the INJ Supply Squeeze

The Injective community has approved a landmark governance proposal that fundamentally reshapes the network's monetary framework. IIP-617, known as the INJ Supply Squeeze, permanently increases the rate of INJ supply reduction by 100%, doubling the network's deflation rate and positioning INJ among the most deflationary assets in crypto.

Once implemented onchain, this upgrade signals the largest tokenomics upgrade to date and represents a decisive step in Injective's evolution as the blockchain built for finance. The framework builds on years of deflationary infrastructure while introducing structural changes that accelerate long-term supply contraction.

A New Deflationary Phase

The INJ Supply Squeeze advances INJ into its most aggressive deflationary phase by permanently tightening issuance parameters at the protocol level. This structural upgrade reduces the rate at which new INJ enters circulation while working in tandem with Injective's existing Community BuyBack mechanism, which systematically removes INJ from the market through monthly buyback and burn events.

Together, reduced issuance and recurring token burns create compounding deflationary pressure. By reinforcing deflation as a core design principle, Injective strengthens INJ's role as the economic anchor of the network and aligns long-term token dynamics with sustained ecosystem growth.

IIP-617 initiated The INJ Supply Squeeze where the community voted overwhelmingly in favor of implementing the tokenomics upgrade onchain.

How It Works With Community BuyBack

The Community BuyBack serves as the perfect complement to the Supply Squeeze. Launched in October 2024, this monthly onchain event allows participants to commit INJ in exchange for a pro-rata share of revenue generated across the Injective ecosystem. The committed INJ is then used to execute market buybacks, with all purchased tokens permanently burned.

Over 6.87 million INJ has been permanently removed from circulation to date. When the Supply Squeeze's reduced issuance combines with these systematic burns, the deflationary effects compound significantly.

The Evolution of INJ Tokenomics

Injective's commitment to deflationary tokenomics began at mainnet launch. Key milestones include:

December 2021: The first INJ burn of 40,000 tokens made INJ officially deflationary, establishing the weekly burn auction where 60% of exchange dApp fees are permanently removed from circulation.
August 2023: INJ 2.0 expanded the burn auction to all dApps across the ecosystem—not just exchanges—welcoming lending platforms, NFT marketplaces, and prediction markets to participate without limits on burn amounts.
April 2024: INJ 3.0 introduced dynamic supply mechanisms tied to staking activity. The community approved IIP-392, implementing quarterly reductions to inflation bounds and increasing the network's responsiveness to staking fluctuations. This upgrade also enabled individual users to participate directly in burns.
October 2024: The Community BuyBack replaced the winner-take-all burn auction model with a democratized system that rewards all participants while accelerating token removal from circulation.

Expected Outcomes

The INJ Supply Squeeze delivers three critical outcomes for the Injective ecosystem:

Accelerated Supply Contraction: By doubling the deflation rate, INJ moves onto an accelerated path toward structural scarcity, with reduced issuance and systematic burns operating simultaneously.
Strengthened Deflationary Design: The framework reinforces deflation as a defining property of INJ, creating a structurally enhanced monetary model built for long-term sustainability.
Improved Value Alignment: The upgraded tokenomics tighten the link between protocol usage, ecosystem growth, and INJ token value accrual, ensuring that network success directly benefits stakeholders.

Community Support

IIP-617 achieved overwhelming community support, with over 22 million INJ mobilized to vote and 99.96% approval from stakers. This strong mandate reflects the Injective community's commitment to positioning INJ as true ultrasound money, a deflationary asset where value accrues systematically as the ecosystem expands.

With the INJ Supply Squeeze, Injective continues to advance its vision of building a blockchain optimized for financial applications where economic design, security, and long-term sustainability are deeply aligned.

As the network scales and onboards institutional players through tokenization, derivatives, and real-world asset markets, the deflationary framework ensures that growth translates directly into token scarcity and value accrual for the entire community.

About Injective

Injective is a lightning fast interoperable layer one blockchain optimized for building premier Web3 finance applications. Injective provides developers with powerful plug-and-play modules for creating unmatched dApps. INJ is the native asset that powers Injective and its rapidly growing ecosystem. Injective is incubated by Binance and is backed by prominent investors such as Jump Crypto, Pantera and Mark Cuban.