The Injective protocol community has overwhelmingly approved a significant tokenomics overhaul, passing governance proposal IIP-617 with 99.89% support based on staked voting power. The "Supply Squeeze" proposal, which is now live, reduces native token issuance and maintains the network's buyback-and-burn program that uses protocol-generated revenue to permanently remove tokens from circulation.
According to an official announcement from Injective on Monday, the changes are designed to "enable INJ to become one of the most deflationary assets over time" by accelerating token removal through aligned reduced issuance and recurring buybacks. The network has already removed approximately 6.85 million INJ from circulation through previous token burns.
The governance vote comes amid a prolonged downturn for INJ's market price, with the token falling nearly 80% over the past year and down more than 90% from its all-time high achieved in March 2024. On the day of the vote, INJ was down about 8%, according to CoinGecko data.
Despite price declines, Injective has continued to attract institutional engagement throughout 2025. In July, Cboe and Canary Capital both filed regulatory applications for a staked Injective exchange-traded fund (ETF), seeking to list funds that would hold and stake INJ to generate rewards. The network has also expanded its validator set, with Deutsche Telekom's IT services subsidiary, Deutsche Telekom MMS, joining as a validator in February, and Korea University recently becoming the first academic institution to operate a validator on the network.
Community reaction on social media following the vote has been mostly optimistic, with users framing the changes as a structural shift rather than a short-term market catalyst. According to DefiLlama data, Injective currently has $18.67 million in total value locked across its DeFi ecosystem, down sharply from peaks above $60 million in 2024.
