Ok, 12.6% annual on staking, with 56 million INJ already locked. First instinct? "Another unsustainable yield that's going to collapse." I've seen so many protocols promise the moon before crashing that I've become cynical by default.
But let's dig a little deeper.
Where does this 12.6% come from exactly? It's not agricultural yield farming from DeFi Summer where we printed worthless governance tokens. Here, the rewards come from the controlled inflation of the token + a portion of the network fees. And this is where it becomes less stupid than it seems: fees increase with activity, so the more the network is used, the more stakers are paid without excessive dilution.
The calculation that interests me: 56M of INJ staked out of about 100M in total circulation. That's over 50% of the supply locked up. In a normal market, that should create crazy buying pressure - the available supply is artificially reduced. Combine that with the constant burn (6.78M in October), and you have a double compression of the supply.
Except that.
If tomorrow the stakers collectively decide that 12.6% isn't sexy enough compared to a memecoin that does x10, and they massively unstake? You have 56M of INJ that could potentially flood the market. By the way, how long does unstaking take? I couldn't find that info clearly, and it's the kind of detail that matters. If it's instantaneous, that's a risk. If it's 21 days like on Cosmos, it limits the panic.
Quick comparison with Cosmos (ATOM): about 9% staking APR, more mature, more liquidity. INJ offers 3.6 points more but with a much lower market cap and therefore more volatility. It's a matter of risk profile. Personally, I prefer an ecosystem that has survived several cycles.
What still makes me bullish in the medium term: active governance. Stakers voted to integrate RWA, to modify fee parameters, for technical upgrades. It's not just passive staking to farm; people are really participating. It creates an alignment of interests that many projects lack.
My main problem: yield depends on network activity. If trading volumes drop, fees decrease, rewards diminish, stakers leave, price drops, fewer new stakers... potential spiral. Injective must constantly maintain its growth. It's exhausting as a model.
And then there's the psychological factor. 12.6% in a bull market where everything is +50% per month? No one cares. But in a bear market where everything is red, that 12.6% suddenly becomes attractive. It can create an interesting price floor.
I stake a small part of my INJ, not all. Enough to participate in governance and earn yield, not enough to be stuck if I want to exit quickly. It's my cautious approach. In 6 months, either I'll regret not having put in more (if it rises strongly), or I'll be happy to have kept flexibility (if it corrects). We'll see.
One thing is for sure: if you're completely unstaked on INJ, you're missing a significant part of the value proposition. But if you're 100% staked without an exit strategy, you might be too exposed. Balance, as always.
INJ
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