Injective Governance Proposal IIP-617 Hits Quorum; Token Burn Rate Set to Double

Injective’s governance proposal IIP-617, colloquially dubbed the “Supply Squeeze,” has officially reached quorum, paving the way for a protocol upgrade that will double the deflationary pressure on the INJ token. With voting set to close tomorrow, January 20, the passing of this measure is effectively guaranteed, marking a pivot toward aggressive supply reduction.

The Mechanism: Institutionalizing Scarcity

The core mandate of IIP-617 is straightforward: double the rate at which INJ is removed from circulation. Currently, Injective operates a burn auction where 60% of all fees generated by dApps are auctioned off weekly to buy back and burn INJ. Under the new parameters, this deflationary velocity accelerates, positioning Injective to mathematically tighten supply faster than any other Layer 1 chain in the Cosmos ecosystem.

This governance move coincides with a verifiable spike in on-chain participation. Data from January indicates Injective’s daily active users (DAU) hit an all-time high of 87,000, suggesting the burn rate is increasing against a backdrop of rising actual network revenue, not just empty emissions.

Market Reaction & Volatility

Despite the deflationary narrative, INJ price action remains choppy. The token traded around $4.70 (-5%) on Monday, struggling to reclaim the psychological $5.00 level despite the governance tailwinds. Volume has cooled to roughly $51 million over the last 24 hours, indicating the market has yet to fully price in the impending supply shock.

“The proposal has met participation requirements and is eligible to be passed.” Injective Governance Data

Retail & Institutional Stickiness

Beyond the burn, supply is being locked up by retail aggregators. Revolut users have now staked over 200,000 INJ directly through the fintech app, signaling a bridge between traditional fintech users and on-chain staking yield. This lock-up removes liquid supply from order books just as the burn rate is set to ramp up.

The vote formally concludes on January 20. Once executed, the new burn parameters will apply immediately to the weekly auction cycle.