Injective's Weekly Burn Auction: A Usage-Driven Mechanism for Reducing Token Supply

Injective's weekly burn auction is an onchain bidding event that has been running since December 2021. The mechanism takes a share of fees from participating apps, packages them into a basket, and auctions it off to the highest bidder in INJ. The winning INJ bid is then destroyed forever.

The process involves fee collection, where typically 60% of revenue from participating apps, plus any direct contributions from users, is gathered into the Auction Fund. A basket is formed using these fees, which can include a mix of assets like ETH, USDT, or other tokens on Injective. Anyone can bid on the basket, but only with INJ.

The auction has been upgraded several times as Injective's ecosystem grew. The most recent upgrade, INJ 3.0, adjusted the supply rate model, raising the Supply Rate Change parameter from 10% to 50%. This is expected to increase INJ's deflation rate by 400%. Additionally, a monthly Community BuyBack program was introduced in November 2025, which ties together with the weekly auction.