Injective – Infrastructure for Decentralized Exchange

What is an Injective?

Injective is a custom interoperable layer-1 protocol for building decentralized exchanges. Injective is created using the Cosmos SDK, with a Blockchain called the Injective Chain.

What is the Injective Chain?

The Injective Chain is a layer 2 sidechain of Cosmos Hub connected to Ethereum. It leverages verifiable delay functions (VDF) to enforce a consensus on transaction order that reflects real-world time.

Currently, the Injective Chain provides the infrastructure for derivatives platforms, acting as a place of decentralized trading and hosting a decentralized open order book. The chain itself is built on Tendermint and allows the transfer and trading of Ethereum-based assets on the Injective Chain. In the future, Injective will be integrated with Cosmos IBC, bringing a more complete cross-chain decentralized trading platform to users.

Currently, there are six exchanges built on top of the Injective Chain: Picasso Exchange, MarsX, Unlimited Exchange, Lunatics Exchange, Inj Dojo Exchange, and Injective Pro.

Objective communication

The special thing about Injective is that it supports individuals or organizations who want to run a high-performance exchange without worrying about technical factors. All second – from the front-end exchange of interfaces, back-end infrastructure, smart contracts, and order books – are publicly available and free.

Injective will reward users for sourcing accounts. That way, service providers are better incentivized to use and they compete with each other to provide a better user experience. Do that, this thing for the user from the everybody in the world accesses DeFi fields.

Injective futures contract

Injective Futures is a decentralized peer-to-peer protocol that supports decentralized perpetual change (decentralized perpetual swaps), and contracts for difference (CFDs – contracts for difference) ). The protocol allows individuals to create and trade arbitrary derivatives for a single price of source data.

Highlights

Here are a few highlights of Injective:

User-friendly
No fuel cost
Transaction Cross Chain
High security
Fast transaction speed
The community is growing rapidly as more and more users prefer and often use decentralized exchanges (DEX) rather than file exchanges (CEX)

INJ tokennomics

The INJ token was initially issued as an ERC-20 token and then moved to the private chain. INJ is a versatile token:

Chain security depends on INJ: Since Injective Tendermint consensus is based on delegated proof-of-stake mechanism, block validators need to stake INJ to validate transactions and receive rewards in INJ for their contributions. Currently, the minimum amount required to become validators is 1 INJ.
Exchange management is also blockchain governance: INJ holders vote on exchange improvements, parameter changes, and new feature implementations, as well as blockchain updates and inflation bonus mechanisms. Since the blockchain needs to maintain its security and governance efficiency, the Injective Protocol incentivizes staking by providing transaction fee discounts. With the Injective VIP program, users participating in INJ staking enjoy a discount on transaction fees corresponding to the amount they stake.
Transaction Fee Auction: The protocol conducts weekly auctions in which participants bid on that week’s fees with INJ. The auction winner receives a set amount of tokens and profits from the arbitrage, while the protocol uses the proceeds to buy and burn INJ.

The maximum supply for INJ was initially set at 100 million. However, since the block reward is compensated by mining new tokens, there is inflationary pressure, turning it into a soft-cap and anchor value for the desired supply.

In theory, the total supply of INJ could exceed the anchor value. The weekly supply burn creates a deflationary effect and offsets the increase in supply to a certain extent. To be more precise, 5% annual inflation on 13 million INJ is equivalent to 650,000 INJ mined in a year while the total burn in just eight weeks is 204,000, which equates to about 1,326,000 INJ burned a year, accounting for 1,325 % of the total supply.

Investors

Regarding the VCs investing in Injective, we have two quite prominent names in the industry: Binance and Pantera.

In addition, on April 20, 2021, Injective raised again in the amount of $10M with the participation of billionaire Mark Cuban, Pantera Capital, BlockTower, Hashed Ventures, CMS Holdings, and QCP Capital.

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