How the $INJ Burn Auctions Work
The INJ burn mechanism is a crucial part of @Injective tokenomics, designed to create a deflationary effect by systematically reducing the total supply of INJ tokens.
All this is made possible through a unique system known as the Burn Auction.
Now, let me briefly explain how the burn auctions work:
The Burn Auction operates as follows:
--- Revenue Generation: A portion of the revenue generated by dApps utilizing Injective’s exchange module is accumulated. This revenue comes from transaction fees, protocol fees, and other sources within the Injective ecosystem.
--- Token Collection: The accumulated revenue is periodically collected into an Auction Fund. This fund also includes tokens from applications that opt into participation and direct contributions from individual users.
--- Auction Process: The Burn Auction invites participants to bid on a basket of tokens from the Auction Fund. The auction is conducted as an English Auction, where participants place bids using $INJ tokens.
--- Winning Bid: The highest bidder at the end of the auction receives the basket of tokens.
--- Token Burn: The INJ tokens used in the winning bid are then burned, effectively removing them from the total circulating supply.
So far, over 6 million tokens have been totally removed from the initial supply through the INJ burn mechanism, making $INJ one of the most deflationary assets in the industry.
Additionally, the $INJ burns happen weekly, every Wednesday, so stay tuned.
Please, hit the share button if you find this useful
