What is $INJ Injective Protocol? INJ Breakdown
The Bitcoin blockchain is known for its security. Ethereum’s blockchain is known for smart contract development. Despite DeFi protocols existing on Ethereum, there is no layer 1 made for DeFi. And that’s where INJ takes the spotlight.
♦What is Injective Protocol
Injective is a layer 1 blockchain aimed at solving the problems in DeFi. Because it’s built with Cosmos SDK, the dApps are compatible with EVM allowing them to run on Ethereum. With fast, low-cost transactions, coins are easily sent to Eth, Cosmos, Solana using the Injective Bridge.
♦Benefits
Famous Automated Market Makers don’t have order books, no limit orders, and huge slippage due to low volume. Injective’s special market maker has decentralized order books, limit orders, and low slippage. On top of that, hey provide low transaction fees to encourage users to use the chain.
Automated Market Makers often have bad spreads, causing price fluctuations. Injective uses decentralized oracles to provide the most accurate prices. Oracles provide information needed about prices.
They got a governance model where INJ holders can vote on future project decisions. INJ is also available as a BEP-20, which can be purchased through the Binance blockchain. They also offer forex pairs.
♦Partnerships
- incubated by Binance
- backed by Pantera Capital & Mark Cuban
Having trusted partners and the ability to create an active ecosystem helps a project’s credibility and transparency.
Check out the ecosystem!
♦Decentralized Insurance Fund
In futures and derivatives trading, there are winners and losers. The fund ensures the winners have enough liquidity. This builds trust, the main driver of the financial market. INJ holders can get staking rewards by holding their coins in the fund.
♦Tokenomics
- Max supply: 100 million.
- Circulating: around 80 million.
80% of coins in supply → good sign.
difference around 25% → good sign
Annual inflation started at 7% and is designed to decrease over time to 2%. They got a burning mechanism that burns 60% of all trading fees weekly. Until April 2023, 5.68 million coins were burned. These help balance supply and demand. When there’s more demand, there’s higher prices.
♦Problems: Centralization
The allocated percentage to the team is 20%. That is a high number.
Moreover almost 30% is allocated to private sale, seed sale, and advisors, this could control the price if any of them dump the markets. Being a big investor in your own project is understandable, but a DeFi project has to preserve its decentralized nature.
Not financial advice, so DYOR! If you enjoyed this, share it with your friends, and don’t forget to follow me for more!
