Injective Protocol AMA with Eric Chen
Eric Su: Hey @ericchen thanks for the taking the time!
Eric Chen: Hey everyone! Glad to be here.
Eric Su: Please introduce yourself to the group.
Eric Chen: Hey guys! I’m Eric Chen, cofounder and CEO of Injective Protocol.
Prior to Injective, I was a researcher at Innovating Capital working on trading strategies and protocol research. Before that I was also part of the NYU Blockchain Labs.
Eric Su: So tell us how did you discover crypto?
Eric Chen: I tried mining bitcoin in high school. Wow looking back it’s almost 8 years ago.
Eric Su: Woah. How cheap was it then?
Eric Chen: I joined crypto more officially in 2017 when I started contributing some dev works to open source projects and got sold by Juan when he was talking about Filecoin.
It was around 200? couldn’t remember haha.
Eric Su: Nice. Injective Protocol, what is it?
Eric Chen: Injective Protocol is an end-to-end decentralized protocol allowing decentralized perpetual swaps, futures, and spot trading. It is the first layer-2 fully decentralized protocol that enables fast, secure, and most importantly, fully decentralized trading on top of Ethereum.
We built every component of our protocol to be fully trustless, censorship-resistant, publicly verifiable, and front-running resistant.
We’re incubated by Binance labs and recently raised a round led by Pantera Capital.
Eric Su: Very impressive!
Tell us about the team. Who is helping you build Injective Protocol?
Eric Chen: We’re joined by an amazing team distributed throughout the globe!
My cofounder Albert Chon is the CTO.
Prior to Injective, Albert worked at Amazon and Open Zeppelin and developed a few cool open source projects. He also graduated from Stanford with a degree in CS
We also have a team of talented BDs and developers like Xinran, Maxim, Bojan, Markus, Alex, and Boris just to name a few.
On top of this, we have two researchers who are currently pursuing their PhDs Ivan and Vighnesh helping us
Eric Su: Thats one hell of a team there.
So tell us what is it like to have Binance Labs and Pantera as backers?
How are they helping a project like yours?
Eric Chen: All of our investors have helped us becoming who we are as a company today. Binance was critical in helping us defining our go to market and helped us find the best path forward, they’re truly the early believers in defi, Pantera has already helped us a lot for future strategies and we look forward to what we can do with them in the future. Also a huge shoutout to Axia8 for building up our entire Asia community.
Eric Su: This project has a token, please tell us about it.
Eric Chen: The injective token serves a few main purposes:
1. Proof of stake security. Stake and earn block reward, this will be the only place where you can get more INJs ;)
2. Buyback and burn. All exchange fees will be allocated into a pool and open up for auction periodically. Bidders can bid in INJ and the proceeds of the auction will be burnt
3. Governance. All upgrades and changes will be voted on. We will slowly expand this feature as we roll out
4. Many incentives! There are market maker incentive, PnL mining (daily distribution of INJ based on closed position and open interest), and relayer incentives
For more detail, you can check it out here at: https://docs.injectiveprotocol.com/overview/token-economics
Eric Su: Liquidity and speed are the main problems that are faced by decentralised exchanges.
What is your solution for this?
Eric Chen: re: liquidity
At day 1 we have multiple market making partners and investors who will be helping us provide institutional grade liquidity
Beyond the make order rebates, we also have a huge relayer incentive where people can host nodes and earn 40% of the exchange fees they route (this can be a nice referral bonus as well ;) .
Eric Su: Sweet. 40%!
Eric Chen: re: speed
We scale ethereum transactions to our own chain to ensure that users can enjoy fast block-time and more importantly finality brought by Tendermint consensus (we’ll be tweaking things more to introduce even better throughput).
So the overall user experience for an average trader will feel just like a centralized exchange. But there is no server what so ever!
Eric Su: Could you explain about the verifiable delay function and selective delay?
And how injective protocol is going to use them?
Eric Chen: We leverage verifiable delay functions (VDFs) to enforce a fair transaction ordering consensus that reflects real-world time via proof-of-elapsed-time, solving critical race conditions and miner extractable value issues present in Ethereum.
Selective delay is a further safeguard to ensure that order cancellation will never be front-ran. It works by prioritizing order cancellation before any fills in each consensus round.
For more details you can check out our whitepaper.
Eric Su: Could you explain about the inflationary and deflationary token model? Is it same as the elastic model?
Last admin question, get ready for the community questions after.
Eric Chen: We introduce inflation through the proof of stake reward, we anticipate that this will start off with 7% inflation and slowly decrease to 2% over the course of 5–6 years.
The deflationary mechanism directly ties to the buyback and burn mechanism. The more volume the exchange produces, the stronger the deflationary force will impose on the token. The goal is to Thanos snap our initial token supply :D.
Q: The biggest barrier for newcomers in the crypto space today is buying and withdraw with FIAT, how secure and robust is your FIAT GATEWAY and what currencies are currently available?
A: We don’t have a fiat gateway. But we do have future plans to partner with fiat gateway providers so that you can convert your crypto without leaving the client.
Q: Fast transaction speed, high security and Fully Decentralized Trading is what is indispensable for Injective DEX. So how does Injective always keep these factors stable?
A: We make the same CAP trade-off as anyone else. But we certainly prioritize decentralization and security over speed past a certain point. You can still expect at most 1 second blocktime on our exchange for the V1! We’re also working on optimization techniques so you can also expect even faster blocktime in the future.
Q: How Injective protocol deals with Various Regulations & licences?
South Asian countries are very good for adoption, what’s your plan to expand here?
A: We are fully decentralized and the exchange operates in a peer to peer fashion. In essence we are an open source software provider.
We do have plans to expand to south Asia! We currently have a Vietnamese community as well
☘️ Injective Protocol — giao thức giao dịch Lớp 2 hoàn toàn phi tập trung lần đầu tiên, giúp mở ra toàn bộ tiềm năng…
Q: What do you think needs to happen for DEXs to gain a lot more market share against centralized exchanges? Do you see BNB and BTC markets helping here? Which one should we take to consider?
A: Go to market is extremely important. I think DEXs in general need to find their own niche before competing in popular markets like BTC or ETH perpetuals. There are a lot of markets that CEXs can’t explore that DEXs can, that’s where we really come in. In the past, Uniswap and Curve all found their own niche in their respective markets and we have our own plans as well.
Of course, you have to wait to learn more about our plans. But our futures protocol is extremely flexible and we will be focusing on perpetuals and quarterly futures on day 1.
Q: Does the Injective platform focus more on professional traders or does it also focus on beginners? What’s your take on layer 2 dexs like Injective DEX? Will they gain traction? What resources does it offer to educate about trading?
A: During the early stages we will be catering to professional traders to ensure that we have the proper liquidity before introducing to the greater beginner traders community. Our current interface is robust yet simple to use, but we will also introduce a basic version to abstract all the advanced features away.
As we roll out we will also post a lot of tutorials and guides to make sure that no one is left out.
Q: How do you protect your system from network hacking and trade manipulations and ensure end-to-end decentralization?
A: Beyond the point I just mentioned about VDF and selective delay to prevent trade manipulation and order sniping, some folks might be wondering about how might VDF ASICs affect the security of our exchange. When VDF ASICs are introduced, we have a competitive compute service model where the trader can submit his order to multiple computation providers (also acting as nodes that will earn 40% of the exchange fee in return) and enter into a fee-sharing agreement which clears at trade settlement. The providers will compete for getting their orders accepted and executed in the block. For larger orders, there’s a fallback mechanism with commit-reveal that the traders can opt-in to.
In terms of network hacking, we have proof of stake security to ensure that there’s exponential cost to taking over 2/3 of the network value. We also have anti sybil mechanisms to protect from spamming and sybil attacks.
Q: What is your strategy to marketing and for Mass Adoption ? How do you evaluate the support from community?
A: Community is always the most crucial element of any exchange! We welcome everyone to create derivatives markets, build specialized clients, and host nodes on top of us.
In terms of marketing, we have a lot of exciting events coming up soon! Currently we also have an ongoing derivatives market design competition that you can check out: https://medium.com/injective-labs/derivative-market-idea-competition-presented-by-injective-protocol-dfa7db0092d6
Q: There are two stablecoin in the Injective system: TrueUSD and DAI tokens. What is the main functions this 2 stable coin in Injective ecosystem? Why don’t you choose another stablecoin?
A: We actually support a lot more :) stay tuned for our website revamp as well as our upcoming testnet trading competition. You will be seeing other stablecoins and assets as well.
Eric Su: Ok. Thats all the time we have.
Thanks @ericchen for doing the AMA
Please invite folks to follow the project.
Eric Chen: Thanks so much!!
Eric Su: Thank you everyone for joining us today! Check out Injective Protocol on Telegram @joininjective.
Visit their website and their social media channels to learn more about us:
Official Website: http://injectiveprotocol.com
Whitepaper Link: https://docsend.com/view/zdj4n2d