Injective Protocol, a blockchain for decentralized finance (DeFi) and derivatives trading, is voting on a proposal to significantly reshape the platform’s tokenomics and introduce a new era dubbed Injective 3.0.
According to Injective, through a post on April 19, the proposal is now open for voting via the Injective Hub. For the next four days, stakers and validators are free to participate.
Community Voting On Injective 3.0
Over the months since launching in 2023, Injective caught the crypto community’s attention. The team aims to launch a platform for users to launch DeFi-focused protocols in a low-cost, scalable, and yet Ethereum-compatible environment. Though INJ, the native currency of the platform, remains one of the top performers, changes introduced by Injective 3.0 will likely push prices even higher.
According to developers, Injective 3.0 aims to make INJ a deflationary asset. A big part of this will be to reduce token minting by controlling the rate of token creation. If the community approves what’s laid out in the proposal, the team will change on-chain parameters to slow down token minting.
At the same time, Injective 3.0 plans to make INJ’s inflation rate more responsive to staking. Under this model, inflation will slow down as more INJ is locked away via staking, making the coin scarcer.
Proposers predict the network to be more robust and secure if INJ becomes more deflationary. Usually, token prices of scarce assets tend to be higher. However, it should be noted that changes to tokenomics don’t immediately lead to favorable price repricing. For prices to soar, there must be utility, driven mainly by community interest.
Millions Of INJ Burned, Will Prices Break $30?
Injective 2.0 is currently live following its activation in August 2023. Under the current regime, there is a token auction burn, where decentralized applications (dapps) running on the platform are free to participate in token burning. According to the Injective Protocol, over 5.9 million INJ have been withdrawn.
So far, INJ remains under pressure, sliding down, shedding 50% from March 2024 highs. The coin has been moving horizontally in the past few trading sessions. However, it is under immense selling and within the April 12 bear bar.
The level at $30 is a crucial resistance level. Conversely, if INJ prices dip below this week’s lows at $23, the coin will slip towards April 13 lows of around $18.
Feature image from Canva, chart from TradingView
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