With a low of $1.4 in January 2023, INJ reached an all-time high of $45, surging from $110 million to a staggering $4.5 billion. Such a huge increase has attracted a lot of attention in the market, and this article will cover an overview of the Injective ecosystem, INJ tokenomics, comparative analysis with other projects, airdrop strategies, and the Volan upgrade.
introduce
Injective Protocol is an interoperable L1 blockchain optimized for DeFi applications. It has out-of-the-box features such as a fully decentralized order book, making it possible to develop applications such as exchanges and prediction markets. Built using the Cosmos SDK, Injective leverages Tendermint consensus for instant transaction finalization and facilitates fast cross-chain transactions with major networks such as Ethereum and IBC-enabled chains
Injective Hub is a platform and gateway that interacts with Injective, providing wallet, governance, staking, and INJ burn auction capabilities. The native token, INJ, is used for governance, staking, and dApp value capture, with an initial supply of 100 million tokens, and a deflationary mechanism implemented through a burn auction.
$INJ token growth has seen a significant increase in 2023, with an increase of more than 3000%. This increase is partly due to the increase in TVL and the number of subscribers, but it is certainly also related to the increasing coverage around INJ.
Trade on Injective
Injective's trading infrastructure allows for the creation and trading of a variety of spot and derivatives markets. It supports chain cap order book management, transaction execution, order matching, transaction settlement, and transaction incentive distribution, providing a comprehensive environment for decentralized trading. Developers can build dApps using CosmWasm, the smart contract platform for the Cosmos ecosystem, enabling seamless migration of smart contracts across chains.
Ecosystem overview
The Injective ecosystem is characterized by its DeFi-focused dApps, primarily focused on spot derivatives trading and asset management. This overview highlights several notable dApps in the ecosystem:
Helix
Helix is the most well-known protocol in the Injective ecosystem and the largest Perpetual DEX (Perp DEX). It facilitates cross-chain crypto asset and perpetual market trading, offering market-leading rebates. Helix operates with zero gas fees, low taker fees, and competitive maker fee rebates, ensuring a cost-effective trading experience.
It has a total transaction volume of over $16 billion and a TVL of $10 million, making it the largest dApp in the ecosystem. For context, the dYdX chain is now part of the Cosmos ecosystem, with a TVL of $349 million and a cumulative trading volume of over $1 trillion (total trading volume of dYdX V3+V4). Although a direct comparison with the largest Perp DEX may seem ambitious, Helix still has a long way to go in the competition.
Black Panther
Black Panther is a decentralized asset management protocol that aims to deliver superior returns through smart vaults. These vaults utilize active trading strategies, such as grid trading, to provide a unique source of alpha that differentiates Black Panther Finance from typical auto-compounding yield protocols. As of January 5, 2024, the protocol has a TVL of $3.6 million, using strategies such as grid trading, trend following, and real gains. The vault has generated up to 100-600% APY.
Dojoswap
Inspired by Uniswap, Dojoswap is an automated market maker (AMM) protocol on the Injective blockchain. It facilitates the decentralized on-chain exchange of various assets within the ecosystem.
Astroport
Astroport is a decentralized, permissionless, open-source DEX. The protocol is governed by a community of token holders through Astral Assembly, Astroport's DAO, and supports permissionless asset listings, multiple pool types, and a robust incentive structure. It features programmable liquidity, a new Rust codebase, Oracle integration, and easy dApp integration, supports a variety of liquidity pool types, and offers a data-rich user interface. Astroport is available on Terra, Sei, Injective, and Neutron.
Talis
Similar to Blur on Ethereum, Talis offers an NFT marketplace, launchpad, and artist tools. It facilitates the buying, selling, and trading of NFTs within the Injective ecosystem. $TALIS tokens are confirmed to be issued, and to be eligible, one must interact with the platform, such as buying or selling NFTs.
INJ tokenomics
Overview of the INJ token
- The initial supply of INJ tokens at launch is 100 million
- Inflation rate: The inflation rate of the token is set at 7% at the beginning, and it is planned to decrease to 2% over time to control supply growth
Ji
- Token Utility: INJ serves as the governance token of the Injective Chain, enabling token holders to participate in key ecosystem decisions
- DAO Participation: INJ holders can propose new market listings and participate in other governance decisions, contributing to the decentralized governance of the protocol
- Community-Driven Governance: The Injective Labs team abstained from voting to ensure governance remained in the hands of the community, promoting a democratic and decentralized governance structure
Deflationary mechanisms
- Buyback and burn: INJ has implemented a buyback and burn mechanism in which 60% of the fees charged by the ecosystem are used to purchase INJ tokens, which are then burned
- Reduced Supply: This deflationary process aims to reduce the total supply of INJ tokens over time, potentially increasing scarcity and value
- To date, a total of 5.8 million $INJ tokens, worth $241 million, have been burned through auctions
INJ Destroy 2.0 upgrade
- Enhanced Token Burn: The INJ Burn 2.0 upgrade allows all dApps built on Injective to participate in the INJ Burn Auction with no limit on how much they can burn
- Economic Impact: This upgrade aims to strengthen the on-chain economy and further unify the interests of various stakeholders by capturing value from all dApps in the Infinite ecosystem
The structure of the INJ token economy is designed to balance the initial token supply with mechanisms that incentivize development, reward users, and maintain a deflationary supply to support the token's value. The governance model ensures that the community plays an important role in the direction of the protocol, while the burn mechanism aims to create a sustainable economic model for the Injective ecosystem.
INJ price performance
With a low of $1.4 in January 2023, INJ reached an all-time high of $45, surging from $110 million to a staggering $4.5 billion.
Comparative analysis
Despite the impressive performance in terms of price action and market cap growth, the TVL metric has not grown significantly to justify such a large increase in valuations. Let's use DefiLlama's simple Mcap/TVL metric to compare the INJ valuation to the popular ecosystem within Cosmos.
With an Mcap/TVL ratio of 155, Injective is higher than almost any other ecosystem.
For a quick comparison with other major ecosystems outside of Cosmos, see the table below:
Compare Injective to Kujira and Osmosis
Osmosis DEX and Kujira are two different and popular appchain/Defi applications that run in the Cosmos ecosystem, each with its own unique features and products. Osmosis is an AMM-enabled spot DEX that allows for the creation of liquidity pools and facilitates the trading of IBC-enabled tokens. Currently, the exchange has 92 tokens and 329 trading pairs.
Kujira is a Cosmos L1 blockchain platform that prioritizes community-selected projects. It operates on a semi-licensable basis and requires governance approval to initiate a contract, ensuring the quality and sustainability of the network. Kujira has an on-chain scheduler that reduces reliance on bots, resulting in fewer wasteful transactions and more efficient protocols. The platform supports native token generation, simplifying smart contract development as each token becomes a native Cosmos token.
Airdrop strategy
The price spike and popularity have attracted a lot of attention, especially in relation to token airdrops, with some projects already confirming airdrops to INJ holders. With a strong $150 million ecosystem fund, the project will attract users and generate traction through airdrops. Here are some potential airdrops, and how to get them.
purse
- Get Keplr Wallet - https://www.keplr.app/
- Send INJ from CEX to your Keplr wallet, or convert assets to INJ on Osmosis or Astroport
Helix
Exchange or trade on the Helix app.
Talis
Stake $INJ via the Talis protocol.
Black Panther
Stake $INJ through Black Panther validators or deposit into one of their vaults.
Volan mainnet upgrade
The Injective Volan mainnet upgrade, known as Proposition 314, is a planned update to the Injective blockchain network. This upgrade is important because it will temporarily stop the blockchain at a specific block height and then restart it with the new version of the software 1.12.0. Key improvements in this upgrade include:
- The Real World Assets (RWA) module, which introduces a new way to create and manage assets that represent real-world financial products, such as tokenized fiat currencies or credit products, in a compliant manner
- Cross-chain functionality has been improved with IBC Hook and packet forwarding middleware, enabling more complex transactions across different blockchain networks
- Reducing the on-chain inflation parameter is expected to make the INJ token more scarce and potentially more valuable over time
- Increased scalability with new enterprise APIs designed to reduce latency, especially for institutional participants
- A fancy oracle design has been added, which will allow for the integration of off-chain price feeds, enabling the launch of unique assets and markets on Injective
- Expanded the ability to burn bank tokens generated on Injective and integrated EIP712 V2 for better Ethereum wallet integration and developer experience
All in all, there's a lot of interesting things happening in the Injective ecosystem. While the recent price action has been attributed more to the narrative than to improving fundamentals, it is clear that the ecosystem has had several catalysts this year, including overall ecosystem growth, technology upgrades, and the protocol's airdrop marketing campaign.