Injective Votes On Major Upgrade To Make INJ Even More Deflationary: Will Prices Recover?

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The Decentralized Finance (DeFi) and derivatives trading platform on the Blockchain called Injective Protocol is holding a vote on a proposition that aims to substantially alter its token economics and usher in what’s being referred to as Injective 3.0.

Starting from April 19th, as announced by Injective, you can now cast your vote on the ongoing proposal through the Injective Hub. The next four days offer stakers and validators the opportunity to take part in this process.

Community Voting On Injective 3.0

Since its debut in 2023, Injective has attracted notice within the crypto community over the past few months. The goal is to create a platform where users can develop DeFi-centric protocols with affordability, scalability, and Ethereum compatibility in mind. INJ, the native currency of the platform, has been a top performer, but the upcoming changes with Injective 3.0 may further boost its price.

Developers plan to make INJ a deflationary asset in Injective 3.0 by decreasing the token supply. A key component of this strategy is limiting the production of new tokens through regulated token generation rates. If the community endorses this proposal, the team intends to modify on-chain settings to curb token minting.

Simultaneously, Injective 3.0 intends to fine-tune INJ’s inflation rate based on staking activity. Consequently, less INJ will be generated when more coins are staked, resulting in a scarcity of the token.

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 According to the Injective Protocol, over 5.9 million INJ have been withdrawn.

Injective Votes On Major Upgrade To Make INJ Even More Deflationary: Will Prices Recover?

Up to now, INJ has continued to decline, dropping approximately 50% since reaching its peak in March 2024. The coin’s price action has been relatively flat over the past few trading sessions. Nevertheless, there is a significant amount of selling pressure and INJ currently resides within the bearish trend established on April 12.

At $30, there’s a significant barrier for INJ prices to overcome. On the other hand, if the coin drops beneath this week’s lowest point at $23, it may head toward the approximate lows of April 13, which are around $18.

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2024-04-20 05:10