Injective
Injective is a blockchain built for finance.
Injective is the only blockchain where developers can find robust out-of-the-box modules such as a completely decentralized orderbook that can be utilized to build a diverse array of sophisticated applications. Moreover, Injective is an open interoperable smart contracts platform.
Injective is built using the Cosmos SDK and is able to attain instant transaction finality using the Tendermint proof-of-stake consensus framework. In addition, Injective can facilitate fast cross-chain transactions across the largest layer-one networks such as Ethereum and Cosmos Hub.
The Injective ecosystem is a network of decentralized applications that focus on providing the best-in-class user experience. By providing the unrestricted and unprecedented ability to access decentralized financial markets, products, services, and toolings, the Injective ecosystem empowers individuals with the ability to more efficiently allocate capital.
The Injective Protocol website shows a team of 15 individuals, all of whom have strong connections and experience in blockchain and related technologies.
Eric Chen is the CEO and co-founder of the project. He has a Bachelor's degree in Finance from New York University and is also a Venture Partner at Innovating Capital, which was one of the early investors in the Injective Protocol.
Albert Chon is the CTO and a second co-founder of the project. Prior to founding the Injective Protocol, he was a Software Development Engineer at Amazon following the completion of a Master's Degree in Computer Science, with a specialization in Systems from Stanford University.
Other members of the team include full stack developers, Solidity developers, Golang developers, as well as specialists in financial markets and marketing research.
The team is also supported by a number of venture capital firms such as Pantera and Binance, as well as seasoned blockchain advisors like Sandeep Nailwal, the founder of Matic, and Andreas Weigend, a former Chief Scientist at Amazon
Why Build on Injective?
Optimized for decentralized finance: Injective provides out-of-the-box financial primitives such as a fully decentralized order book to allow developers to create mainstream dApps. For instance, applications can leverage the order book to launch exchanges, prediction markets, and various other on-chain strategies.
Interoperable: Injective is natively interoperable across a number of sovereign blockchain networks while also being IBC-enabled. Injective is able to facilitate seamless cross-chain transactions across Ethereum, Moonbeam, IBC-enabled chains such as CosmosHub, and Wormhole-integrated chains such as Solana, Avalanche, and many more.
Build dApps Using CosmWasm: Injective supports CosmWasm, a novel smart contracting platform built for the Cosmos ecosystem. This means developers can easily launch their own smart-contract-powered applications on Injective. Smart contracts that work on other chains supporting CosmWasm can seamlessly be migrated to Injective.
Launch Ethereum and IBC compatible tokens: Since Injective supports cross-chain transactions with Ethereum and all IBC-enabled chains, it means tokens launched on Injective can be exposed to multiple networks by default.
Intuitive developer experience: Utilize flexible and expressive development environments powered by Rust and Golang.
Injective Protocol’s Key Features
Injective Protocol is a universal Decentralized Finance (DeFi) protocol for cross-chain derivatives trading across a plethora of financial products such as perpetual swaps, futures, and spot trading.
The Injective Chain is implemented as a Cosmos SDK module, built with Ethermint (EVM on Tendermint). It utilizes a Tendermint-based Proof-of-Stake to facilitate cross-chain derivatives trading across Cosmos, Ethereum, and many other layer-1 protocols.
Injective Protocol is collision-resistant and utilizes Verifiable Delay Function (VDF) to prevent front-running.
INJ is the native asset of Injective Protocol and is used across a diverse range of functions such as:
Protocol governance
Exchange fee value capture
Derivative collateralization
Liquidity mining
Staking
The Injective platform enables users to:
Take part in decentralized cross-chain derivatives trading with zero gas fees.
Access cross-chain yield generation for a multitude of assets.
Create and trade on any derivative market with only a price feed, thereby opening up more opportunities for trading on markets not found on other exchanges.
Innovation in the Injective Protocol
The exchange structure of the Injective Protocol makes it a public utility where the network of users is able to create customized and personalized derivatives markets. In addition, it brings ownership to the users since holders of INJ tokens will have voting rights and governance over future protocol changes and updates.
The Injective Protocol is built on the Cosmos SDK, with a token bridge between Cosmos and Ethereum and a set of features for inter-blockchain communication. The exchange gives users the opportunity, for the first time ever, to trade in a fully decentralized manner.
This is the next generation of DEX and is a move forward toward a fully interoperable and decentralized web. Because it is built on a layer-2 infrastructure the Injective Protocol promises lower costs and faster transaction speeds when compared with existing DEXs.
The protocol consists of several key innovations that distinguish it from the set of existing DEXs. These are split into four domains – client, service, Cosmos, and Ethereum. Together these four are the backbone of the Injective Protocol platform.
How the Injective Protocol Works
We’ve looked under the hood to see the technology behind the Injective Protocol, but how does it all come together and work in practice? The Injective Chain creates the backbone for the platform, and it has an important role in ensuring the functionality of these four key components of the Injective Protocol.
Order Books
The order books used on the Client Exchange are 0x based, providing full decentralization and helping with transaction efficiency. This comes about because the orders are capable of enabling side-chain relays with the settlement being completed on-chain. Adding to the decentralized nature of the order books is the fact that they are hosted by censorship-resistant INJ nodes.
Trade Execution Coordinator (TEC)
The Trade Execution Coordinator ensures that front-running the order book is not a possibility.
Front running is the use of bots to monitor the order book, with these bots jumping the order queue by copying the exact bids of real users. These bots are capable of copying trades in under a second, and their use often results in actual exchange users not having their orders filled. That can create frustration and the exodus of traders from an exchange.
The Injective Protocol uses a verifiable delay function which ensures new orders are not being placed ahead of prior orders.
Bi-directional Token Bridge
The Token Bridge is required to allow for the transfer of ERC-20 tokens to and from the INJ chain. This bridge has been created in the Cosmos network within what is known as a “peg zone”. These peg zones are account-based blockchains bridging between zones within the Cosmos ecosystem and outside blockchains (in this case Ethereum).
In practice, when using the Injective Protocol, the bi-directional token bridge route travels through the following stages from an Ethereum address:
through the INJ Peg zone smart contract;
through the relay service to the ETH bridge module;
via an oracle to the Bank Module (COSMOS address).
When Cosmos to Ethereum trades are conducted this route is reversed.
The INJ token serves a number of utility functions, but its primary purpose is as the governance token for the Injective Protocol. It gives holders the right to propose protocol changes, and to vote on whether or not to adopt those changes.
A second use case for the token will be as collateral for lending platforms. In the same way that stablecoins are used as collateral in DeFi platforms, users will be able to lend INJ tokens for use as a margin in the derivative markets created on the platform.
Plus the INJ tokens could also be used for such things as insurance pool staking or collateral backing to generate passive interest income.
In addition, the token will also be used as an incentive for relay node operators and market makers. In the system being created makers pay a 0.1% exchange fee, but takers pay a 0.2% fee.
This will actually allow makers to receive a net positive payment in rebates, which will help incentivize the provisioning of liquidity. Once liquidity is created the markets will enjoy tight spreads and considerable market depth.
On top of all that the nodes and validators will be able to improve their API or interface to cater directly to trades and be rewarded for doing so.
Remaining exchange fees can be used to buy back tokens and burn them in a deflationary manner, adding value to the remaining tokens by the decreased supply.
And finally, a portion of the INJ available will be distributed to users based on their notional profits. Users with the greatest notional profits will also receive the greatest INJ rewards, which should reward those who use the platform the most. These rewards will be calculated based on a daily snapshot.
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