After the mainnet went online, Injective pioneered an innovative burning auction mechanism. This mechanism collects agreement fees and converts them into collective agreement value. Initially, the token burning auction collected 60% of all fees based on Injective trading dApps, and subsequently the assets used for the auction were burned.
During the weekly burn event, each trading dApp puts 60% of its transaction fees into the auction basket, giving community members the opportunity to bid on it. Once the auction ends, the assets paid for the auction basket are immediately burned, reducing the overall supply of tokens.
This innovative approach effectively turns transaction fees into community-driven incentives, enhancing user engagement and interactivity, benefiting both winning participants and Injective community members. To date, over 5.7 million INJ have been permanently destroyed with the help of previous burn auction models.
New INJ Burn 2.0 mechanics
With the launch of its autonomous network, Injective has transformed into the world's leading Layer 1 blockchain. Injective is now the fastest L1 blockchain catering to the needs of a wide range of dApps. Protocols focused on DeFi, lending, NFTs, gaming, and social finance have all found a home on Injective. Therefore, as the Injective ecosystem evolves, the token burning mechanism should evolve with it.
The upgrade to INJ 2.0 is designed to enable any dApp on Injective to contribute to the burn auction, extending the benefits of the token burn mechanism to a wider range of protocols.
Under this upgraded system, a variety of dApps, including lending platforms and NFT markets, can choose to contribute to the burning auction. Additionally, all protocols have the option to allocate the amount they are willing to contribute to the auction, or even allocate 100% of the fees they collect into the auction basket.
Injective’s developer documentation has also been modified to include instructions on how any new dApps built on Injective can directly contribute to the auction basket. Full details can be found here.
This major upgrade brings great hope to the entire Injective community. The platform takes the utility of the INJ token to the next level by integrating a wider range of use cases into the burning mechanism. Increased participation from various dApps not only expands the potential rewards available for auction, but also allows for larger amounts of INJ to be burned.
INJ: Assets driving the new economy
The new INJ Destroy 2.0 upgrade represents more than just a technical enhancement; it embodies Injective's commitment to fostering a thriving and connected ecosystem for all Web3 applications. This dynamic expansion encourages collaboration, innovation and collective growth, firmly rooted in the principles of community empowerment.
INJ 2.0 marks an important milestone. With the launch of Bitcoin, the idea of a truly sound digital currency is currently emerging in the crypto industry.
By taking a more inclusive and adaptive approach, Injective enables a variety of dApps to contribute to burn auctions, resulting in greater community engagement and a stronger economic system. This transformation reflects Injective’s unwavering commitment to building a powerful collaborative ecosystem that continues to push the boundaries of possibility.
About Injective
Injective is an interoperable Layer-1 blockchain for building powerful DeFi and Web3 applications. Injective provides out-of-the-box order book and derivatives modules needed to create mainstream DeFi applications. Smart contract-enabled applications on Injective are natively compatible with Ethereum and Cosmos IBC, while also enabling instant transaction settlement. INJ is Injective’s native asset, powering the Injective blockchain and its rapidly growing ecosystem. Injective is incubated by Binance and backed by Pantera Capital and Jump Crypto.
in conclusion
The release of the INJ 2.0 destruction mechanism marks an important milestone for the Injective ecosystem. This upgrade not only increases the utility of the INJ token, but also enhances community participation and the strength of the economic system. By incorporating more dApps and protocols into the destruction mechanism, Injective is laying the foundation for a more prosperous and connected Web3 future.
In short, the launch of INJ 2.0 is not only a technological advancement, but also Injective’s commitment to building a strong, collaborative and innovative ecosystem. This change will drive further growth for Injective and bring greater opportunity and value to all involved.