Injective (INJ) crypto has experienced a sharp increase in price, rising 40% from the low point this year. This comes in the wake of a community vote that has passed the Injective 3.0 upgrade. It brings deflationary mechanisms to the token to increase its utility and value.
In Injective 3.0 upgrade staking activity will trigger a dynamic token supply adjustment mechanism. This change is expected to propel deflation rate up to 400%. It aims to resolve the inflationary challenge, and to improve the future long term value of the token.
The governance proposal to begin the next phase of $INJ 3.0 has passed with 99.99% of community members voting YES.
The new chapter of INJ 3.0 is live now to dramatically reduce the token supply, enabling INJ to become one of the most deflationary assets over time. pic.twitter.com/YJNCQsIiD7
— Injective 🥷 (@injective) January 5, 2025
The new mechanism is hoped to award stakers more effectively. According to StakingRewards, 56% of INJ’s circulating supply is staked for a yield of 10.68%. It is one of the highest in the market. Ethereum yields 3.13%, Solana 7.06% and Sui 2.81%. It is expected that the increased deflationary model and the staking rewards will keep investors interested in the token.
Injective Crypto Technical Breakout Pushes Price Higher
Over the last 24 hours, INJ rose by 12.30% to reach $26.14. Notice that this moves prices in line with a breakout from a bullish flag pattern, a technical pattern that often heralds more upward action.
Following a breakout to $50.00, resistance levels at $26.30, $33.00 and $50.00 are now in play. $33.00 is now the next hurdle the price must overcome, having already gotten close to the $26.30 level. Analysts say rising above $33.00 could lead to tests of $50.00, a psychological and historical resistance at that.
“Momentum behind INJ’s rally is supported by strong technicals and improved tokenomics,” Jonathan Carter noted.
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Increased trading volume during the breakout further supports the potential for continued gains.
DeFi Growth Strengthens Network Activity
Injective crypto’s rising price is also tied to growth in its decentralized finance (DeFi) ecosystem. The total value locked (TVL) in the network has climbed to $55.33 million, the highest since June 2023. Applications like Hydro, Helix, Neptune Finance, and DojoSwap have contributed significantly to this growth.
However, this achieved progress sees a stablecoin market cap of $30 million, indicating that the ecosystem still has legroom to reach higher. Within network activity and price appreciation, continued expansion in DeFi’s use cases could continue to drive additional network activity and price appreciation.
Competitive Landscape Remains a Challenge
Despite Injective moving forward, there’s lots of competition in the blockchain space. Besides Sui, Aptos, Base and other rival networks, there have been huge amount of ecosystem investment and millions of developer attention.
Despite its staking rewards and seating of champion investors such as Mark Cuban, Injective still struggles to attract more developers to its platform. If INJ is to continue its upward trajectory then the project will have to manage how ongoing competition in the broader blockchain space affects network growth.
