Injective price flies as the new INJ 3.0 era starts

VC-funded layer 1 blockchain Injective 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. This was the highest level since December 18. The token is up 40% from its lowest point this year.

This rise is primarily due to the recent community vote to switch from Injective 2.0 to Injective 3.0, which will introduce new deflationary features.

Management offer to start the next phase $INJ 3.0 passed with 99.99% of community members voting YES.

The new chapter of INJ 3.0 is currently live to significantly reduce the token supply and ensure that INJ becomes one of the most deflationary assets over time. pic.twitter.com/YJNCQsIiD7

— Enjektif 🥷 (@enjektif) January 5, 2025

The upgrade will adjust token supply based on staked INJ, enabling real-time adaptation to staking 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 is likely to increase staking rewards for INJ holders. According to StakingRewards, Injective currently offers a 10.68% staking return with a 56% staking rate, making it one of the highest-yielding cryptocurrencies. In comparison, Ethereum (ETH) offers a 3.13% return while Solana (SOL) and Sui (SUI) return 7.06% and 2.81% respectively.

The injection price also rebounded as the total value locked in the DeFi network rose above $55.95 million, its highest level since June last year. Much of this growth is driven by major dApps such as Hydro, Helix, Neptune Finance and DojoSwap. The stablecoin market cap is only $30 million.

However, Injective, which counts billionaire investor Mark Cuban among its supporters, has had difficulty attracting developers to its ecosystem. In contrast, newer layer 1 and layer 2 networks like Sui, Aptos, and Base have attracted billions of dollars into their ecosystems.

Injection price analysis INJ price chart | Source: crypto.news

The 4-hour chart shows that INJ has made a strong recovery in recent days. This recovery began after the token bottomed at $18.42 on December 16. It has since moved above the major neckline resistance at $23.80 and crossed the Woodie pivot point at the same level.

The Percentage Price Oscillator broke above the zero line, indicating positive momentum. As a result, INJ is likely to continue rising as buyers target $29, the first resistance level of the Woodie pivot point. This level is closely aligned with the 61.8% Fibonacci retracement point of $28.87.

However, a decline below the pivot point at $23.80 would invalidate the bullish view and signal further downside potential.