Injective, the VC-funded layer 1 blockchain, continued its upward trend as community members voted in favor of the new Injective 3.0 upgrade.
Injective (INJ) rose for six consecutive days, reaching an intraday high of $26, the highest level since December 18. The token is up 40% from this year’s low.
The rally is mainly driven by a recent community vote to move from Injective 2.0 to Injective 3.0, which will introduce new deflationary features.
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 upgrade will adjust the token supply based on the staked INJ, allowing for real-time adjustment to stake activity. This change is expected to increase the deflation rate by 400%, making Injective more resilient to inflationary pressures.
The shift to a more deflationary model will likely increase staking rewards for INJ holders. According to Deploy rewardsInjective currently offers a betting yield of 10.68% with a betting ratio of 56%, making it one of the highest yielding cryptocurrencies. In comparison, Ethereum (ETH) offers a yield of 3.13%, while Solana (SOL) and Sui (SUI) yield 7.06% and 2.81% respectively.
The injection price also recovered when the total value committed to the DeFi network rose above the limit $55.95 millionthe highest level since June last year. Most of this growth is driven by major dApps such as Hydro, Helix, Neptune Finance and DojoSwap. The market cap for stablecoins is only $30 million.
However, Injective, which counts billionaire investor Mark Cuban among its backers, has struggled to attract developers to its ecosystem. In contrast, newer layer 1 and layer 2 networks such as Sui, Aptos and Base have sucked billions of dollars into their ecosystems.
Injective price analysis
The 4-hour chart shows that INJ has made a strong recovery in recent days. This recovery started after the token bottomed at $18.42 on December 16. Since then, it has moved above the key neckline resistance at $23.80 and crossed the Woodie pivot point at the same level.
The Percentage Price Oscillator has crossed above the zero line, indicating positive momentum. As a result, the INJ is likely to continue rising, with buyers targeting the first resistance level of the Woodie pivot at $29. This level closely matches the 61.8% Fibonacci retracement point at $28.87.
However, a decline below the pivot point at $23.80 would negate the bullish outlook and point to the potential for further downside developments.
