Injective is a blockchain optimized for decentralized finance (DeFi) products. It uniquely provides plug-and-play financial infrastructure primitives, such as a high performance on-chain decentralized infrastructure, decentralized bridges, oracles, and a composable smart contracts layer with CosmWasm.
Injective’s core exchange module provides state-of-the-art capabilities, including an advanced on-chain orderbook and matching engine, allowing users to trade stablecoins and cryptocurrencies in spot, derivatives, cross-chain margin trading, futures, and FOREX.
To achieve this, Injective has developed components that are highly resistant to censorship and frontrunning, as well as publicly verifiable, open-protocol, and permissionless.
The blockchain is also natively interoperable with Cosmos and Ethereum,, and also serves as a gateway between Solana, Algorand, Aptos Network, and the Cosmos ecosystem through its integration with Wormhole.
Injective offers four main product lines
Essentially, there are four product lines on which Injective's value proposition is based:
- Injective Chain: a Layer-1 blockchain, implemented as a Cosmos SDK compatible with an Ethermint runtime environment (EVM Tendermint), that facilitates the creation of new decentralized applications using smart contracts written in Solidity. This allows for the use of a Proof-of-Stake protocol for derivatives trading between L-1 chains, such as Ethereum and Cosmos.
- Injective Bridge facilitates cross-chain exchange. Through Peggy Bridge, it connects Injective and the Cosmos ecosystem with the Ethereum ecosystem. Following its recent integration with Wormhole, it will also link the Cosmos ecosystem with ecosystems such as Solana, Algorand, and Aptos Network.
- Injective API nodes that serve as both a data layer for the protocol and provides transaction relay services.
- Injective dApps and tooling, which are accessible in a permissionless manner. Presently, the most widely used type of dApp built on Injective are decentralized exchanges.
Injective and its DEX philosophy with public utility
When discussing cryptocurrency exchanges, popular centralized platforms such as Binance, Coinbase, and Huobi often come to mind. These centralized exchanges, also known as CEXs, control users' assets for as long as they are deposited on the platform and only return control to users when they withdraw funds to a private wallet.
On the other hand, decentralized exchanges (DEXs) have emerged as an alternative. One of the key differences between a DEX and a CEX is that on a DEX, users can trade directly from their private wallets, allowing them to maintain custody of their assets and trade without the need for personal identification such as Know Your Customer (KYC).
In contrast to CEXs, users play a crucial role as liquidity providers and market makers in the development of DEXs. It is in this aspect that Injective believes it sets itself apart from both CEXs and current DEXs.
Instead of centralizing profits, Injective burns 60% of the exchange fees earned across exchange dApps built on Injective through a weekly community-led auction using INJ as the only bid currency. Once the funds are collected, they are immediately burned, and a new auction period begins. This process aims to increase the scarcity of INJ and create a deflationary pattern.
No gas fees for users, but incentives for market makers
Injective's structural design allows it to avoid network congestion. Trades on Injective are processed at the speed of block creation, currently averaging around 1 second per block, making it the fastest chain in the Cosmos ecosystem. Additionally, its zero-fee model allows DEX users to trade on its platform without incurring any costs.
For market makers, DEXes on Injective charges user fees of around 0.1%, while for takers it charges 0.2%. In addition, governance approved fee discounts for makers and takers if they satisfy the specified minimum INJ staked amount and have had at least the specified trading volume.
Market maker rewards are distributed periodically. This is done by taking a snapshot of users' existing account balances, which allows us to determine their fee savings for a given period of time.
A further step towards interoperability between networks
In a recent announcement, Injective expressed excitement that it is now the gateway that allows Solana, Klaytn, Algorand and Aptos Network to connect to Cosmos IBC via Wormhole with "a simple click". This, in the words of the release, gives it "one of the largest number of inter-chain connections in the entire industry."
While Solana will initially only be displayed on the Wormhole network, users will be able to link assets from the other integrated blockchains via the Portal Bridge. This is the perfect opportunity to discover what Injective is and what it brings to the cryptocurrency industry.
Wormhole is a generic protocol, whose function is to facilitate the flow of connector messages between important blockchains. It achieves this by enabling the transfer of information and value between ecosystems.
Wormhole currently offers access to Solana, Fantom, Avalanche, Algorand, Oasis, BNB Chain, Aptos and Polygon. It also supports L2 networks such as Arbitrum. It also supports several EVM environments, for example Aurora, which provides access to NEAR Protocol.
With Wormhole, Injective is moving steadily towards interoperability by giving it access to multiple blockchains. This allows assets to directly use all dApps hosted on Injective. In addition, being the main gateway and connection to the entire Cosmos IBC gives it a plus as a pioneer with this achievement.
Injective's founders' trajectory
Injective started in 2018 under the initiative of Eric Chen and Albert Chon, founders of Injective Labs, "a research and development company focused on creating unparalleled decentralised financial solutions". At Injective you will meet the rest of the team that contribute to Injective, but this time we will focus on the experience of Eric Chen and Albert Chon.
Eric Chen, co-founder and current CEO, has a background in hedge funds, as well as crypto research at a blockchain-focused fund, as reviewed by Territorio Blockchain with a transcript of an AMA held with Chen.
Albert Chon, currently in charge of technology management, has served as a software development engineer at Amazon in 2018, a software engineer at Linc Global Inc, a consultant at Open Zeppelin, and even a researcher at Stanford's Parallel Distributed Processing Lab. His experience includes the nutraceutical industry (where he served as an analytical chemist and marketing associate) at Advanced Botanical Consulting & Testing Inc and as a marketing writer and technical analyst at L3 Networks.
Uses of INJ, Injective's native token
According to INJ tokenomics, the protocol has an initial supply of 100M INJ, which will progressively decrease through weekly INJ burning.
As a result, each token burn provides more value to the available INJ, apart from the underlying value provided by the trades of users and market makers.
This deflationary process began in December 2021, when Injective Protocol officially announced that 40 000 INJ were being burned for the first time, as well as the periodicity with which it would be carried out from now on, every week.
To burn a digital asset is to take it off the market forever, i.e. to reduce the total amount of a token's circulating assets.
How is INJ used?
INJ is the native token of the Injective and a key part of the governance. It is also used as collateral for derivatives, to secure the protocol, to incentivize market makers and to capture value from the exchange rate. You can also earn staking rewards for delegating INJ to your trusted validator!
If you are still not sure, these 7 keys to choosing the best validator can serve as a starting point.
Every decision in Injective is made through governance proposals, and in order to participate in decision making all you need to do is own your INJ token.
Another important use can be found in certain futures markets, where INJ is used as collateral and insurance, allowing users to accumulate interest on their locked LP (Liquid Provider) tokens.
dApps in Injective
Currently, there are three main dApps highlighted by Injective.
Helix, the exchange
With an intuitive environment, Helix enables zero-cost trades. It also highlights the advantages of its decentralized order book for trading crypto-assets and derivatives, with a wide offering of "cross-chain niche markets."
Injective's tools enable tokenised perpetual exchange, which allows for the execution of futures trading, enabling Helix to create the futures market trading function.
Frontrunner, for sports market enthusiasts
Predictions on the results of sports matches have their market in Frontrunner. This prediction marketplace allows you to place sports bets without limits and without house advantage, as well as offering you the possibility to use cryptocurrencies to buy and sell shares in both teams and athletes.
White Whale, the lending platform
In this protocol, which provides liquidity between chains, you can make flash loans. There you will find MMAs focused on arbitrage.
But these are not the only existing protocols in Injective Protocol. CosmosATOMDaily shared with us the range of options, support and partnerships that Injective Protocol hosts, reflecting how fast it is moving forward.
Toward an inclusive financial future
Injective is creating the largest and fastest-growing Web3 financial ecosystem for a truly free and inclusive financial world through its network of dApps, validators, developers, and investors.
Broadly speaking, these are some of the distinctive elements of Injective, which recently debuted as a connector between Cosmos and multiple external ecosystems thanks to its full integration with Wormhole.
For some time now, it has been allowing users and decentralized market makers to enjoy the benefits of being an EVM-compatible SDK-based blockchain on Ethereum. However, it has shown great ambition and is not willing to stop there. Let's see what Injective will surprise us with in 2023.
See you soon, cosmonauts!