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@ doraintern
2024-06-06 17:00:57
Dora Research: Injective Ecosystem Deep Dive
Introduction:
In the rapidly evolving landscape of blockchain and decentralized finance (DeFi), Injective emerges as a trailblazer, redefining the boundaries with its innovative solutions and plug-and-play modules. The ecosystem provides the tools to empower developers and DeFi users to build a more democratized world of finance. Aligned with this mission, Injective is often heralded as the “blockchain built for finance.”
This article will take a deep dive into the Injective ecosystem, offering a comprehensive exploration of its core components, key projects to look out for, and future initiatives to support their growing developer community.
TL;DR:
Injective is transforming DeFi with its lightning-fast, interoperable Layer 1 blockchain. Originally built on Ethereum, Injective evolved to its own Layer 1 (L1) blockchain in 2021, unlocking greater scalability and governance flexibility. The ecosystem has exploded, boasting over 200 projects and a vibrant community of 700,000+ members worldwide. As the community continues to grow, Injective has taken the initiative to offer support to developers through hackathons and incubation. Building together with the community, Injective is governed by a global DAO through its native crypto asset $INJ, and is one of the most deflationary assets in the blockchain industry. Injective stands out with its groundbreaking innovations, providing unprecedented interoperability, dynamic smart contracts and novel web3 modules to rapidly create scalable dApps.
Major projects flourishing within Injective include DojoSwap, Hydro Protocol, Black Panther, Helix, and Mito, each pushing the boundaries of decentralized finance. With ambitious initiatives and robust community support, Injective is set to play a pivotal role in shaping the future of finance. Dive into the full article to discover how Injective is redefining the DeFi landscape and what exciting developments lie ahead!
What is Injective?
Injective is a lightning-fast, open, interoperable Layer 1 blockchain, powering the next generation of DeFi applications. Founded in 2018 by Eric Chen and Albert Chon, Injective embarked on a mission to revolutionize the financial system, to be free and inclusive through decentralization.
Testament to what the team at Injective were building, they were able to secure early stage funding from some critical players in the Blockchain space, including Binance, Pantera Capital, Blocktower Capital, Delphi Capital, and Mark Cuban.
Injective initially launched as a DeFi protocol on the Ethereum network, leveraging its robust infrastructure and large developer community to bootstrap its decentralized exchange platform. However, driven by the need for scalability, interoperability, and governance flexibility, Injective re-emerged as its own sovereign L1 blockchain in November 2021. This transition allowed Injective to harness Cosmos' SDK and leverage a custom implementation of the Tendermint consensus mechanism, enabling faster transaction speeds and lower fees. Injective provides a decentralized cross-chain bridging infrastructure with Ethereum, Solana and any Inter-Blockchain communication (IBC) - enabled blockchain.
Injective then gained access to a vibrant ecosystem of interoperable blockchain projects, enhancing its capacity to innovate and provide a seamless trading experience for users across multiple networks. It focuses on supporting fast transactions with instant finality, addressing common issues faced in the DeFi space such as slow trade execution and high transaction costs.
The Injective ecosystem has shown rapid growth, with over 200 projects and 700,000+ community members globally.
Dive into the Coding Language
Considering the rich developer resources available within EVM and SVM, Injective has introduced the launch of inEVM and the soon to release VM rollup to support SVM. The initiatives aim to achieve true composability across ecosystems. As a result, Injective stands out as the only Layer 1 blockchain with the unique capability to unify the interoperability features of Cosmos with the swift transaction speeds of Solana, all while offering developers the extensive accessibility associated with Ethereum’s ecosystem.
Introducing inEVM: inEVM is the first-ever EVM capable of achieving true composability across Injective and Ethereum. Developed in collaboration between Injective and Caldera, a layer 2 rollup infrastructure provider for blockchains (RaaS), inEVM offers enhanced scalability, and expanded opportunities for Ethereum developers to interact with the broader blockchain universe and build further. inEVM is an Injective-based rollup utilizing the Ethereum Virtual Machine (EVM) settled on the Injective Chain. inEVM enables EVM developers to easily deploy applications into the Injective ecosystem, taking advantage of Injective’s high performance, low fees, fast transaction speed, native Web3 modules, and familiar EVM toolkits.
Additionally, two-way messaging between Injective’s WASM smart contracts and inEVM facilitates interaction between applications, enhancing interoperability with IBC chains, enabling developers to leverage Injective’s capabilities and financial tools for a more connected blockchain landscape.
$INJ economics
$INJ, Injective’s native token, is a decentralized public utility and governance token. INJ serves as the primary token for transactions and gas fees within the Injective ecosystem. Additionally, INJ is essential towards the decentralization of the network, governing decision-making, chain upgrades, and more.
Injective provides dApps access to its native exchange module, readily available to developers out-of-the-box. dApps leveraging the exchange module, contribute 60% of all fees to be systematically directed into a weekly on-chain buy-back-and-burn auction. The exchange module enables traders to create and trade on arbitrary spot derivative markets. The entire process of order book management, trade execution, order matching, and settlement occurs on chain through the logic codified by the exchange module. Under this upgraded system, a diverse range of dApps can opt to contribute to the auction burn, extending the benefits of the token burn mechanism to a wider range of protocols.
With the introduction of the INJ Burn 2.0 mechanism, apps not integrated with the exchange module but interested in participating are provided with the option to send a portion of protocol-generated revenue to the burn auction.
Additionally, the INJ burn upgrade made participation available to all users, not just dApps on Injective. This allows any project or individual to directly contribute any assets to the Injective Burn auction, enhancing its overall value and effectiveness.
The systematic burning of INJ reduces the token supply, promoting the deflationary nature of INJ.
INJ delivers a versatile range of functionalities, while enhancing network security and providing benefits to token holders through governance voting and staking mechanisms.
Injective 3.0: Injective Tokenomics Upgrade
Injective has experienced significant growth, emerging as a leading blockchain for finance driven by its native token. With INJ's multifaceted role in governance and network security, Injective has also implemented a token burn auction to reduce supply, occurring weekly, as explained above.
The introduction of INJ 2.0 in August 2023, showcased a more comprehensive token burn auction, enabling any dApp on Injective to contribute to the weekly burn auction, rather than just those using the exchange module. The new burn mechanism resulted in larger amounts of INJ to be burned weekly, with nearly 5.9M INJ burned to date, totaling ~$190M at the time of writing.
To unlock the full potential of INJ, a new proposal was set forth in April 2024 for INJ 3.0 to enhance tokenomics. INJ 3.0 introduces a significant adjustment to supply parameters for INJ, increasing its rate of deflation by a factor of 400%, positioning INJ as one of the most deflationary assets in the blockchain industry. This strategic move is aimed at injecting long-term value into the ecosystem, fostering growth, and attracting a broader array of participants. INJ serves as the backbone of the Injective ecosystem, boasting diverse utilities ranging from governance to protocol fees and security mechanisms. Notably, features like the Burn Auction have set INJ apart, allowing the network to collect, auction, and burn accumulated fees on a weekly basis. Building on the success of previous iterations, INJ 3.0 further enhances these capabilities, aligning with the platform's rapid expansion and evolving user needs. The governance proposal for INJ 3.0, endorsed by the Injective community through IIP-392, reflects a commitment to adaptability and resilience. By significantly increasing the rate of deflation and implementing a dynamic monetary policy, Injective ensures that INJ remains responsive to changing market conditions while maintaining equilibrium and security within the ecosystem. With this update, Injective reaffirms its dedication to driving innovation in Web3 finance and solidifying the position of INJ as a cornerstone asset in the decentralized landscape.
Ecosystem deep dive
In January 2023, Injective unveiled its $150M ecosystem initiative aimed to further accelerate developer adoption of the lighting-fast blockchain. The endeavor has garnered support from leading institutions across both Web3 and traditional finance, including Pantera Capital, KuCoin Ventures, Jump Crypto, and DoraHacks.
Thanks to the initiative, the Injective ecosystem has experienced rapid growth, with over 30+ dApps built and a number of major deployments in the horizon. Exchange dApps developed on Injective have processed a total over $23B+ to date. Now, let's highlight over a few projects which have played a significant role in shaping the growth and adoption of the ecosystem.
Key Projects
Injective is a thriving ecosystem with native projects built from the ground up emerging from Injective hackathons and also drawing top-tier DeFi applications from other networks to deploy on its platform.
Native Projects
Injera Injera and USDi, the Injective Synthetic Dollar that will be used to power the whole of Injective’s Cosmos Chain.
One core design principle of the Injera Protocol and USDi that makes it superior to other protocols like Ethena is that everything is built around the Injera Money Market (CDP), allowing users to optimize their capital efficiency further.
DojoSwap: DojoSwap is a Uniswap influenced automated market-maker (AMM) protocol enabling decentralized on-chain exchange for various assets accessible in the Injective Ecosystem. In less than 1 month, DojoSwap has generated $25M in TVL, $95M in trading volume with 15K+ unique traders on the platform.
Hydro Protocol: Hydro Protocol offers liquidity solutions with Real Yield Assets, combining real world and crypto assets for optimized yield strategies to create Injective’s LSD+LSDFi ecosystem. Additionally, Hydro introduces Real Yield Assets (RYA) , a specialized product taking LSDFi to the next level of yield-optimization strategies. Since its launch in Jan 2024, Hydro protocol has accumulated over $150M in TVL with over 1.6M INJ staked.
Black Panther: Black Panther is the leading AI driven asset management protocol built on Injective. Various vaults are available for automated trading strategies to help traders achieve higher returns. Black Panther is one of the most popular asset management protocols with $6.8M in TVL.
Helix: Helix is a decentralized orderbook crypto exchange for trading crypto assets and derivatives. Offering zero gas fees, an intuitive user interface, and niche interchain markets. Helix creatively combines unprecedented institutional-grade liquidity, opening anyone to leverage capital-intensive financial markets in the world’s first decentralized order-taking network.
Mito: Mito brings a groundbreaking protocol to revolutionize automated trading, launchpads and yield generation. The launchpad creates a fair system for users to access new tokens deployed on Injective and provide liquidity uploads for nascent protocols.
Out App: Out App is a SocialFi platform which focuses on forging communities and rewarding users for the quality of their input on the platform. Currently live on Injective mainnet, Out App introduces an innovative approach to social networking where users can engage with like- minded individuals, communities of interests and positively contribute to discussions for rewards.
Talis Protocol: The first native NFT marketplace building on Injective, offering innovative tools to interact with the NFT ecosystem. To allow users the best experience in the NFT ecosystem, Talis provides tools like gathering activity, basic analytics, price analysis and real-time data information.
Neptune Finance: Optimizes DeFi savings with its advanced peer-to-peer lending protocol, offering variable interest rates, multiple borrowing accounts, and modular features dynamically adjusting rates through a PID controller, to target market efficiency, new yield strategies, deeper liquidity and increased utility for INJ. Only after a few months Neptune Finance has crossed $10M in TVL with a 40% monthly growth in users.
Moon App: MoonApp is a launchpad integrated with Injective, reshaping the landscape of DeFi opportunities in the Injective Ecosystem. MoonApp serves as a gateway to a diverse range of Injective projects, offering users access to token sales and staking initiatives.
Non-native Deployments
Exotic Markets: Exotic Markets is a cutting-edge DeFi infrastructure protocol that aims to bring the first real options & yield generation platform on Injective. Exotic Markets is focused on the Injective chain and has been pre-selected to provide the option infrastructure for Injective, the fastest DeFi-first L1. Their unique approach involves the amalgamation of options orders from diverse sources within our option pool, facilitating improved order matching and seamless execution. Additionally, our options products span a diverse range of on-chain strategies including popular digital assets and in the future RWAs.
Levana Protocol: Levana Protocol is a fully collateralized perpetual swap protocol offering a full collateralization model, ensuring traders maintain sufficient balance to cover positions. The low fee structure and 30x leverage makes Levana competitive in the market.
What makes Injective stand out?
Injective has solidified its position as a groundbreaking ecosystem, renowned for its lightning-fast transaction speed, low network fees, and robust security. But what truly sets the Injective ecosystem apart is its unwavering support and open dialogue with the community.
With a growing community, Injective has taken the proactive steps to offer support through initiatives like hackathons and incubations. Injective has partnered with Dora Factory on the Public Good Staking initiative. Dora Factory team runs a Public Good Staking Validator for Injective, using the rewards to support the Injective Developer Community.
Together with DoraHacks and Dora Factory, the Injective Foundation has been able to host various developer initiatives, showing their commitment to supporting the developers building within their ecosystem. In December 2023 The Injective Illuminate Hackathon took place on DoraHacks.io and was a remarkable success with a $100,000 prize pool (Fully sponsored by DoraFactory) and 100+ BUIDLs submitted. Building on the success, Dora Factory and the Injective Foundation partnered to showcase the 10 most promising projects from the Illuminate Hackathon in a Quadratic Funding round.
DoraFactory provided the full 1,500 INJ (~$70,000) matching pool for this initiative, and saw over 2200 community members contribute more than 150 INJ to their favorite projects. This initiative allowed the participating teams to grow their communities, and also receive some additional funding to allow them to continue building and developing their projects to prepare them for the next stages of their roadmap.
Through the Public Good Staking Partnership, the Dora team has been able to support 5 Injective Ecosystem projects with investment into their Pre-Seed and Seed fundraising rounds. The Injective Foundation is constantly seeking ways to sustainably fund the best teams building within their ecosystem, displaying their commitment to their ecosystem developers.
What to look forward to in 2024
Looking ahead, to accommodate the growing community and developers eager to build within the Injective ecosystem, there are several key initiatives in the pipeline between DoraHacks, Dora Factory, and the Injective Foundation.
Large Global Virtual Hackathon: Injective Hackathons are always a great success, and the community has shown that they are eager for more global-scale hackathons to offer an opportunity for developers to show their creativity on a global scale. Leveraging DoraHacks’ platform to reach developers from all parts of the world will help attract interest and different perspectives from new markets.
Quadratic Funding Round: Injective’s commitment to listening to the community has been highlighted with ongoing upgrades, and community involvement remains as crucial as ever. After the success of the very first Quadratic Funding (QF) on Injective, the Injective Foundation is looking forward to hosting more QF rounds in the near future to support more early stage teams building within the ecosystem.
The Injective ecosystem has steadily grown over time, cementing themselves as a proven ecosystem in the web3 industry. Injective provides advantages with its multi-VM architecture, automatic smart contract execution, high throughput, and low latency. With the ongoing open dialogue with the community, every update has made it easier for developers and users to interact in the ecosystem. Put together, Injective is well positioned to play a pivotal role in revolutionizing the future of finance. We look forward to what Injective has in store for the future.