25 Jan What is Injective (INJ)?
The Injective blockchain is a specialised layer 1 protocol designed for creating decentralised finance (DeFi) applications with high interoperability and efficiency. It focuses on enabling fast transactions with instant finality, addressing common issues faced in the DeFi space such as slow trade execution and high transaction costs. Injective is particularly noteworthy for its ability to support a variety of advanced financial instruments, including decentralised perpetual swaps, futures, options, and prediction markets.
At its core, Injective is built using the Cosmos SDK and operates on a Tendermint-based proof-of-stake (PoS) consensus mechanism. This not only ensures the network’s security and decentralisation but also contributes to a significantly reduced carbon footprint compared to traditional proof-of-work systems. The platform is designed to be highly developer-friendly, allowing for the creation of custom DeFi applications and the permissionless listing of new markets on decentralised exchange applications built on Injective.
Injective Protocol is optimised specifically for DeFi applications. Its primary aim is to facilitate the development of highly interoperable cross-chain DeFi applications, enhancing transaction speed and ensuring instant finality. This unique blockchain platform allows developers to build and launch various financial instruments.
One of the key features of Injective is its native smart contract implementation, which enables the permissionless creation and listing of new markets on Decentralised Applications (DApps) developed on the platform. This facilitates deep cross-chain liquidity access and supports a range of DApps with zero gas fees, setting Injective apart in the DeFi space.
Security and governance are central to Injective’s design. The network operates on a Tendermint-based PoS consensus mechanism, facilitating network security and decentralisation through the participation of prominent validators. This mechanism also contributes to a significantly lower carbon footprint.
The INJ token is also used for governance of the Injective PoS blockchain to determine various decisions and upgrades across the chain. In addition to this, INJ tokens provide incentives for exchange within DApps and serve as collateral backing for derivatives in the Injective ecosystem, underlining its multifaceted role vital to the platform.
INJ can also be used for staking, and as a part of the platform’s economic model, including exchange fee structures and value accrual mechanisms. The platform’s focus on scalability, interoperability, and its robust economic model positions Injective as a notable player in the evolving world of Web3 and DeFi.
How Injective Works
Injective is a Layer 1 blockchain, meaning it operates its own independent network rather than being built on top of another blockchain (like many Layer 2 solutions). This network is fine-tuned for trading applications, offering features tailored to the needs of DEXs and other DeFi platforms.
Injective uses a Tendermint-based PoS system. This involves validators staking INJ tokens to participate in network consensus. The PoS system on Injective is designed to be efficient and eco-friendly, with instant finality in transaction processing, meaning that once a transaction is included in a block, it’s considered confirmed without needing multiple block confirmations.
One of Injective’s most important qualities is its ability to facilitate cross-chain trading. It enables seamless interoperability among various blockchains, allowing users to access deep liquidity pools and trade a wide range of assets from different networks. This interoperability extends to decentralised perpetual swaps, futures, and other advanced financial instruments.
Unlike many DEXs that rely on automated market makers (AMMs), Injective employs a fully decentralised orderbook model. This approach mirrors traditional finance (TradFi) exchanges, offering traders more control over their orders and potentially leading to more efficient markets.
Injective features a native execution environment for smart contracts, making it uniquely equipped for creating and executing complex trading strategies and financial instruments. This environment is tailored to support high-frequency trading, algorithmic strategies, and other advanced trading functions.
The Injective Protocol adopts a model where end-users don’t have to pay gas fees. This is a significant departure from the typical Ethereum model and can enhance the user experience by removing one of the barriers to entry for new users.
Additionally, INJ can be used as collateral in the trading ecosystem, adding a layer of utility to the token beyond simple transfers.
Why is Injective Unique?
Injective Protocol’s amalgamation of a decentralised orderbook, cross-chain interoperability, user-centric design, and a scalable, secure infrastructure makes it a versatile platform in the DeFi ecosystem. Its targeted focus on trading applications not only meets the needs of a broad spectrum of traders but also pioneers new possibilities in DeFi.
Its infrastructure supports a wide array of trading instruments, including spot and derivative markets like futures and perpetual swaps. This specialisation positions Injective as a go-to platform for decentralised trading, attracting a diverse range of trading-focused DApps and services. By focusing on this niche, Injective caters to a significant segment of the DeFi community that seeks advanced trading tools and functionalities in a decentralised setting.
What is the Injective Ecosystem?
The Injective ecosystem has a rapidly expanding and diverse Web3 financial network, showcasing over 200 DApps that span a wide array of categories. This rich and multifaceted ecosystem is a testament to Injective’s commitment to fostering a free and inclusive financial world. It serves as a hub where developers, validators, partners, and builders converge to create innovative solutions and drive the evolution of DeFi.
pplications on the Injective ecosystem encompass a broad spectrum of Web3 categories like Bridges, DEXs, Stablecoins, and even Venture Capital, which provide essential services and utilities for the ecosystem, and expand the network’s reach and capabilities. This variety ensures that the Injective ecosystem is not just a trading platform but a comprehensive DeFi landscape offering a wide range of services and functionalities.
A key aspect is its emphasis on Data and Interoperability. This focus allows for seamless interaction and integration between different blockchain networks, which is crucial in a fragmented blockchain landscape. By prioritising interoperability, Injective ensures that its users can access a diverse range of assets and services across multiple blockchains, enhancing the user experience and broadening the scope of possible financial transactions.
This comprehensive approach ensures that users have access to a full suite of financial tools and services, making it a one-stop solution for various Web3 financial needs. From secure storage and easy asset transfers to complex financial instruments, the Injective ecosystem caters to a broad audience ranging from individual retail users to large institutions.
What is the INJ Token?
The INJ token is the native cryptocurrency of the Injective Protocol. INJ serves as the backbone of the Injective Protocol, driving its governance, incentivising participation, ensuring network security, and playing a vital role in the platform’s economic model. Its multifunctional nature makes it central to the protocol’s operations and long-term sustainability.
- Staking – The Injective Protocol utilises a PoS consensus mechanism, where INJ token holders can stake their tokens to secure the network. By staking INJ, users can become network validators or delegate their tokens to other validators, contributing to the network’s overall security and efficiency. In return for their role in maintaining the network, stakers receive rewards, typically in the form of additional INJ tokens.
- Trading Fees, Earn Rewards/Discounts – INJ tokens can be used to incentivize trading activities on the platform. Users who trade on the Injective Protocol can earn rewards in INJ tokens, and those holding INJ may receive discounts on trading fees. This mechanism encourages active participation and liquidity provision on the platform.
- Protocol Fee Value Capture – A portion of the trading fees generated on the Injective Protocol is used to buy back INJ tokens from the market. These bought-back tokens are then burned (permanently removed from circulation), which introduces a deflationary aspect to the INJ token supply. This mechanism is designed to align the interests of token holders and users, potentially increasing the token’s value over time as the supply decreases.
- Collateral in DApps/DeFi – INJ tokens can be used as collateral for various derivative products available on the Injective Protocol. This usage extends beyond stablecoins, providing users with more flexibility in their trading strategies and margin requirements.
- Interoperability and Cross-Chain Functionality: Reflecting Injective’s focus on cross-chain interoperability, INJ facilitates seamless transactions across different blockchain networks, enhancing the protocol’s ability to connect diverse crypto ecosystems.
From Injective’s Documentation:
“The initial supply of INJ is 100,000,000 tokens and shall increase over time through block rewards.
The target INJ inflation is 7% at genesis and will decrease over time to 2%. Gradually, the total supply of INJ may be lower than the initial supply due to the deflationary mechanism detailed in the Exchange Fee Value Accrual token burn system.”
How to buy INJ with crypto
2. Go to the Deposit page.
3. In the Cryptocurrencies section, choose the crypto you plan to buy INJ with and generate a deposit address on the Exchange wallet.
4. Send the crypto to the generated deposit address.
5. Once the funds arrive in your wallet, you can trade them for INJ. Learn how to trade on Bitfinex here.
How to buy INJ with fiat
2. You need to get full verification to be able to deposit fiat to your Bitfinex account. Learn about different verification levels here.
4. Check your Bitfinex registered email for the wire details.
5. Send the funds.
6. Once the funds arrive in your wallet, you can use them to buy INJ.
Also, we have Bitfinex on mobile, so you can easily buy INJ currency while on-the-go.