Injective Protocol Report 2024

Table of Contents

1. Preface 2. Introduction 3. Tokenomics 4. Brief History & Timeline 5. Business model 6. Ecosystem & Community 7. Roadmap & Future Plans 8. Challenges & Risks & Red Flag 9. Conviction Table

Preface

This free research is provided by Xellar Capital Research intended for educational purposes and should not be considered financial advice.

Xellar Capital Research is the investment arm of Xellar Technologies, a Web3 technology firm focused on Security, Infrastructure into the web3 space in southeast asia.

Xellar Technologies is the developer of Xellar App and the Xellar Vault, the first non-custodial card types cold wallet in South East Asia. Xellar also develops RPC endpoints and infrastructure which power many Web3 companies and providing low latency connection to the blockchain.

Xellar Capital Research is Xellar’s flagship investment firm which focuses on fundamental investing on cryptocurrency-based assets. If you would like to learn more, feel free to connect at [email protected]

Special thanks to Wilbert, COO & CIO for writing this report. For more information on Xellar visit:

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Introduction

Injective Protocol is a decentralized layer-2 exchange protocol that enables seamless trading of various Ethereum-compatible assets. It stands out by addressing key limitations of existing decentralized exchanges (DEXs), offering order book, superior liquidity, extremely low fees, and full transparency. With a burgeoning user base and an active developer community, Injective Protocol has become a frontrunner in the rapidly evolving landscape of decentralized finance.

Token Details

Fundamentals

Basic Information: INJ, the native token of Injective Protocol, is identified by the symbol INJ, with the current price standing at $13 as of Oct 28th 2023.

Use Case: INJ serves as a governance token, allowing users to participate in decision-making, staking to circulate the token, and fee payments within the ecosystem, providing control over its future developments (L1).

Target Audience: Primarily catering to traders, developers, and DeFi enthusiasts as everything is fully decentralized, the token aims to create a secure and efficient trading environment for a diverse range of assets; this include:

Spot assets: Ethereum, Bitcoin, Tether, USD Coin, and other popular cryptocurrencies

Derivatives: Perpetual futures contracts, options contracts, and other complex financial instruments

Yield farming assets: Crypto assets that can be used to generate yield through DeFi protocols

Cross-chain assets: Assets that are native to other blockchains, such as Bitcoin and Solana, that can be traded on Injective Protocol through cross-chain bridges

Albeat, these allow:

Traders can use Injective Protocol to trade spot assets, derivatives, and yield farming assets, all in one place decentralizedly. This can save traders time and money, as they do not need to switch between different platforms to access different markets.

DeFi enthusiasts can use Injective Protocol to cross-chain assets and trade them on Injective Protocol's decentralized exchange. This allows DeFi enthusiasts to access a wider range of investment opportunities and to trade assets more efficiently.

Statistics
Total Value Locked (TVL):	$1.2 billion (as of October 30, 2023)
Trading Volume:	$100 million per day (as of October 30, 2023)
Number of Active Users:	100,000 (as of October 30, 2023)
Circulating Supply:	83,755,555 INJ
Non-Circulating Supply:	16,244,444 INJ
Market Cap:	$1,184,246,754 (83% of total supply)
Fully Diluted Valution:	$1,413,932,180

Technical Insights

Technical Architecture: Leveraging the Ethereum Virtual Machine (EVM) and Tendermint consensus, Injective Protocol adopts a high-performance order book model for instant order matching and settlement.

Blockchain Features: Smart contract functionality enables the creation of intricate derivatives, yield farming, and cross-chain interoperability, amplifying the protocol's versatility.

Scalability: Operating as a layer-2 solution, the protocol can handle thousands of transactions per second, ensuring a highly scalable environment for trading activities.

Security: Through decentralized custody solutions and rigorous auditing protocols, the protocol is equipped with robust security measures to safeguard user funds and transactions.

Financial Aspects

Risk and Ownership

While Injective Protocol implements robust security measures, potential market volatility and regulatory uncertainties pose inherent risks for investors.

The cryptocurrency industry is still relatively new and untested, and there is always the risk of new and unforeseen risks emerging.

Ownership Distribution:

The ownership distribution of INJ is relatively decentralized and very healthy, with no single entity holding more than 10% of the total supply.

The top 100 holders of INJ control around 30% of the total supply.

The remaining 70% of the supply is distributed among a large number of retail investors.

Tokenomics:

INJ has a fixed total supply of 100 million tokens.

The inflation rate of INJ is 2% per year.

The inflation rate of INJ will be gradually reduced over time, until it reaches zero.

Community and Ecosystem

Community Growth:

Injective Protocol has a vibrant and growing community, with over 100,000 active users on social media and Discord.

The Injective Protocol community is highly engaged, with a large number of users participating in discussions and development initiatives.

Developer Ecosystem:

Injective Protocol has a strong developer ecosystem, with over 100 active developers contributing to the protocol.

The Injective Protocol developer ecosystem is supported by a number of grants and initiatives, which help to attract and retain talented developers.

Additional Statistics:
Twitter followers:	100,000+
Discord followers:	50,000+
Telegram members:	20,000+
GitHub stars:	10,000+

Investment Strategy

Very good risk to reward at the moment as they are a token that has been constantly developing throughout the bear market of 2022 and thriving. Potential 10x gain to 10B Market Cap in the next cycle with a max holding of 10% of portfolio.

Summary

Injective Protocol represents a groundbreaking solution for decentralized trading, underpinned by scalability, security, and a thriving ecosystem. With a growing user base, active developer community, and competitive edge, INJ is poised to cement its position as a leading player in the decentralized finance landscape.

2. Tokenomics

INJ, the native token of the Injective Protocol, has a total token supply of 100 million with a current circulating supply of 83.7 million on 30/10/2023 which is 83.7% of the total supply. Looking at the INJ token release schedule, the protocol aims for a token distribution as shown in the diagram above but currently the circulating supply is split up accordingly. The next and last vesting should happen in Jan 2024 and afterward the token has reached its maturity stage.

INJ Token Utility

INJ serves a vital role within the Injective Protocol ecosystem, with its multifaceted utility enabling various functionalities and incentives for its holders:

Governance: INJ holders have the power to submit and vote on proposals concerning the development of the Injective Protocol. To actively participate in governance, a minimum of 500 INJ is required toa void spam, fostering a democratic decision-making process. Various components are governed by the INJ tokens, such as the exchange parameters, protocol updates, and future Protocol. The process of governance as per the Injective Core Node is discussed below in few steps:

Submission of Proposal: Blockchain is the place where the proposal is submitted along with a deposit.

Vote: The next step is to confirm the proposal and open the votes once the deposit has reached a certain minimum deposit value. The transactions can then be sent by the bonded INJ holders to vote on the proposal.

Signal and Switch: If an upgradation concerning the software is juxtaposed to a plain text proposal, the validators will be giving a signal once they are ready to shift to the new version. After the 75% of validators have given the switching signal, the software automatically shifts to the newer version.

INJ holders can request and initiate a required referendum concerning any governance decision by simply submitting the signed proposal on-chain. Once the proposal is supported by 1% of the INJ token holders’ total supply, the commencement of the 14-day referendum period will be done. During this referendum period, the INJ token holders need not lock their tokens can go simply out their votes on-chain for convenience. After the end of the 14-day referendum period, the voting power of the INJ token holders, which is proportionate to the token balance, will be calculated. The proposal will only be accepted when the majority of the voting power approves the proposal after the elapse of the voting window, and the proposal will also be accepted only when a predetermined percentage of total supply has actively taken part in the election.

Staking: Leveraging a Tendermint-based Proof-of-Stake system, the protocol ensures the security and stability of transactions. Validators and delegators are key participants, with the latter earning rewards for staking their tokens.

Fee Payments: INJ is utilized for paying transaction fees on the Injective decentralized exchange (DEX), emphasizing its role in facilitating seamless trading activities. The decentralized exchange initially implements the minimum global exchange fee, which for makers is set at a rate of 0.1% and for the takers at a rate of 0.2%.

Collateralization: INJ tokens function as collateral for margin trading, derivatives markets, futures markets, and insurance staking pools, enhancing the protocol's financial infrastructure and expanding its utility.

Developer Incentives: Nodes and validators of Injective sidechains also can act as relayers catering to the traders in the most needful way. Relayers sharing the order in the orderbook are rewarded with incentives to provide them with the best traders experience. An exchange fee will be received by the node which discovers the first make order. Similarly, the node first relays a take order will get a ratio of an exchange fee of each make order found by them. This will be set to 40% reward of trading fees and can also be subject to change by the governance.

Staking Rewards and Risks

Staking with the Injective Protocol offers a baseline Annual Percentage Rate (APR) of 5%, encouraging token holders to actively participate in securing the network. An unstaking period of 21 days is required for tokens to be withdrawn, ensuring the stability of the staking process. The Staking APY for Injective varies between 4% and 10%, allowing for flexible rewards based on delegation levels. To better understand potential returns, investors can utilize the Injective staking calculator at [https://www.stakingrewards.com/earn/injective-protocol/].

Risks associated with staking include slashing events, which can lead to the loss of tokens from a node pool. However, the Injective Protocol is designed to ensure that delegators receive staking rewards even if their validator experiences downtime, minimizing potential risks for delegators.

Yield Farming Derivatives and Market Creation Commissions

Injective Protocol provides users with opportunities for passive income through derivatives that track stablecoin liquidity pools, offering a lucrative avenue for yield farming. The collaboration with Formation Fi optimizes risk management within the liquidity pool, enhancing the overall user experience and financial gains.

The network also encourages market creation through the creation of custom derivatives, rewarding users with a percentage of trading fees and additional community grants. The exact mechanism for these incentives remains under development, emphasizing the dynamic and evolving nature of the Injective Protocol ecosystem.

Addressing DeFi Exchange Challenges

The Injective Protocol tackles common challenges faced by decentralized finance (DeFi) exchanges, including front-running and order collisions. By implementing a unique variable delay function (t values), the protocol eliminates front-running opportunities, ensuring fair and transparent order execution for users.

To enhance liquidity, the Injective DEX utilizes a liquidity aggregation model, pooling resources from various sources without compromising the decentralized nature of the platform. This approach streamlines trading activities and minimizes transactional frictions, fostering a robust and efficient trading environment.

Future Prospects

The Injective Protocol is positioned to become a prominent player in the derivatives market, offering leveraged trading, risk-hedging, foreign exchange risk management, and asset-less cash settlement trades. With a potential addressable market of trillions of dollars, the protocol's capabilities and robust tokenomics provide a strong foundation for long-term growth and sustainability.

By integrating key functionalities and addressing critical challenges within the DeFi ecosystem, the Injective Protocol aims to redefine the decentralized trading landscape, fostering a secure, transparent, and user-centric platform for traders and investors worldwide.

3. History and Timeline

Founding and Vision

Founded in 2018 by Eric Chen and Albert Chon, Injective Protocol emerged as a decentralized derivatives exchange on Ethereum, emphasizing a layer-2 solution to enable swift and secure access to DeFi markets. The protocol's launch in April 2020 marked a milestone in the realm of DeFi, providing a fully decentralized exchange system that aimed to overcome the limitations of existing DEXs, including order book trading constraints, latency issues, liquidity challenges, and centralized designs.

Vision & Mission

Injective Protocol's overarching vision revolves around the establishment of a decentralized economy, fostering a secure and confidential system for exchange, payments, and remittances. By democratizing the crypto exchange landscape, the platform positions itself as a catalyst for empowering users and communities worldwide, facilitating cross-chain blockchain-based forex trading, derivatives, and futures in a decentralized and inclusive manner.

Key Milestones and Developments

Injective Protocol has assembled a team of skilled engineers and entrepreneurs, including veterans from prominent tech giants such as Google, Facebook, and Microsoft. Leveraging their profound expertise in blockchain technology and financial markets, the team has consistently driven the development and expansion of the protocol and its ecosystem.

The timeline of Injective Protocol's key milestones is a testament to the project's rapid growth and progress:

Historical Milestones

2018: Injective Protocol is founded, laying the groundwork for its future endeavors. 2019: The platform secures $2.5 million in seed funding, marking a significant milestone in its early fundraising efforts. 2020: Injective Protocol raises $10 million in Series A funding and successfully launches its mainnet, marking a pivotal moment in the platform's evolution. 2021: The derivatives marketplace is launched, and strategic partnerships with Band Protocol and the introduction of the cross-chain bridge further solidify Injective Protocol's position in the DeFi space. 2022: The platform introduces its futures and perpetual swaps marketplaces, cementing its status as a leading player in the derivatives market. Noteworthy collaborations with Chainlink for decentralized oracles reinforce the platform's commitment to cutting-edge technology and innovation.

Ongoing Developments and Initiatives

The Injective Protocol team remains dedicated to advancing the platform's capabilities and offerings, with a focus on several key areas of development:

Spot Trading Marketplace: The team is actively developing a spot trading marketplace, enabling users to engage in the seamless trading of digital assets within a decentralized ecosystem.

Margin Trading Feature: A forthcoming margin trading feature is expected to provide users with the opportunity to trade derivatives with leverage, expanding the platform's utility and catering to diverse trading preferences.

Risk Management Tools: Injective Protocol is in the process of developing robust risk management tools, aiming to empower users with effective risk mitigation strategies when engaging in derivatives trading activities.

Cross-Chain Support Expansion: With a focus on enhancing interoperability, the platform is working toward expanding cross-chain support, allowing users to trade assets from various blockchains seamlessly within the Injective ecosystem.

Overall, Injective Protocol's dedication to building a decentralized and trustless environment for derivative trading is evidenced by its strategic partnerships, technological advancements, and ambitious roadmap for the future. As the platform continues to evolve, it is poised to shape the trajectory of the derivatives market and solidify its position as an industry trailblazer.

4. Business Model

Injесtvе Prоtосоl is a tесhnоlоgу created tо solve the problem of third party involvement in trade by рrоduсing thе right sequеnсе bу which оrdеrs саn bе ассеlеrаtеd sесurеlу with no collision barriers. The invention was created to bring out the advantage of DEX liquidity while also eliminating the need for a third party to match trade orders within the same block. The tесhnоlоgу аlsо аllоws раrtiсiраnts to select оrdеr сараblе of tаking it without knowing the details of the orders belonging to other traders. This will prevent front-running and ensure that a large number of additional orders can be fulfilled without difficulty. The Injective Prоtосоl is also designed to match the аggrеgаtiоn аgrееmеnt bеtwееn most DEX to ensure Liquidity by matching orders respectively to provide flexibility and efficiency.

Let us now understand the various components of Injective Protocol and how they solve third-party involvement in trade, as mentioned below.

Injective Chain

Injective Chain, as defined by the Injective lab, is the core backbone for Injective’s sidechain layer 2, which works based on a hand-in-hand process with Cosmos zone. The Injective Chain also represents the infrastructure of the project. This infrastructure powers the Defi applications of next-gen in a decentralized and trustworthy mechanism. Injective Chain is a platform of derivatives that fully hosts an orderbook, EVM execution environment, trade execution coordinator, and a token bridge to Ethereum that is bi-directional. With the help of the sidechain that is cosmos-backed supporting EVM environments, Protocol to scale via L2 solutions, even though it offers solutions on Ethereum, is possible with the assistance of the Injective Chain. For a better understanding of the Injective Chain, let us unfold the components of the Injective Chain.

EVM Execution Environment

The generalization of smart contract execution is supported by the Injective Chain across the modular implementation of the EVM on top of cosmos SDK. Users utilize a scalable and interoperable implementation of Ethereum built on Proof-of-Stake with 1-block finality after implementing EVM on top of Tendermint.

The undermentioned contracts are deployed on Injective EVM:

Injective EVM Bridge Contracts

Staking Contract

Injective Coordinator Contract

0x V3 Exchange Contracts

Injective Derivatives Contracts

Injective DEX Contracts

Decentralized Orderbook

A decentralized Orderbook can be defined as an Ox-based orderbook that is fully decentralized in nature, allowing the order relay of sidechains with the help of on-chain settlement. An implementation that is decentralized in nature belonging to the off-chain order relay, which is traditionally centralized. This order book is majorly used by the decentralized exchanges, which are also the central limit order book. A decentralized and censorship-resistant orderbook is hosted by the nodes of the Injective Chain, which also relays and stores orders for derivatives trading and spot trading.

Trade Execution Coordinator

Implementation of decentralized coordinator based away from the specification of 0x coordinator. The trading from front-running with the assistance of Verifiable Delay Functions enabling the lower-latency trading via soft-cancellations is done with the help of Injective TEC.

Injective Exchange Client

The Injective Exchange Client is defined as the comprehensive and friendly interface for graphical user-directed towards the general public and advanced users. Relayers have access to host the client on a server to permit users’ interaction with Protocol. Individuals also have access to run clients locally for direct interaction with Protocol. IPFS is the platform for the deployment of Exchange Client Interface.

Injective API Provider

Relayers in the Injective network are rewarded for sourcing liquidity under the Injective model. By doing so, exchange providers are driven to better serve customers by competing to deliver a better user experience, hence increasing global access to DeFi.

Injective API nodes serve two purposes:

Service for Transaction Relay

Layer of Data

Service for Transaction Relay

Although users can communicate directly with the Injective Chain by broadcasting a compliant Tendermint transaction encoding a compatible message type, most users would find this inconvenient. API nodes help users engage with the Protocol by providing a basic HTTP, gRPC, and Websocket API. After that, the API nodes create the necessary transactions and send them to the Injective Chain.

Layer of Data

External clients can use Injective Exchange API nodes as a data layer. Injective provides a data and analytics API that works with Injective’s sample frontend interface right out of the box.

For the Injective Client, the Injective Derivatives and Spot Exchange APIs, 0x Standard Coordinator API, Injective Derivatives Protocol Graph Node GraphQL API, and different API services are required. Injective Exchange Client is all supported by the Injective API.

Injective EVM RPC provider

This component makes the nodes compatible, providing the complete Ethereum JSON-RPC API smoothly connecting it to the Injective EVM.

Injective Bridge Contracts on Ethereum

This Injective ⮂ Ethereum Bridge mechanism is known as the bi-directional Injective Token Bridge serving as a two-way Ethereum peg-zone for ERC-20 tokens to be moved to the Injective Chain EVM, allows users to transfer ERC-20 tokens from Ethereum. The peg-zone is based on Peggy and is protected by the Injective Chain’s Proof-of-Stake security. The Injective Bridge allows ERC-20 tokens to be moved from Ethereum to the Injective Chain. The standard flow, as specified by Peggy, is used to guide the procedure.

Ethereum to Injective

The basic procedure for transferring ERC-20 tokens from Ethereum to the Injective Chain is as follows. Validators observe ERC20 asset locking and sign a data package containing lock information, which is then conveyed to the Injective Chain and witnessed by the Ethereum Bridge module. The Oracle module released the funds and transferred them to the intended recipient’s Cosmos address if the Cosmos address was stated specifically in the lock event. Once a quorum of 2/3 of the validators by signing power has confirmed that the transaction’s information is valid, the funds are released by the Oracle module and transferred to the intended recipient’s Cosmos address if a Cosmos address was specified in the lock event. The user can also choose to move the ERC-20 token to the Injective EVM chain’s equivalent child ERC-20 token.

The end-user is only required to transfer their ERC-20 to the Injective Peg Zone contract and select whether they want their cash transmitted to their Cosmos address (as reflected in the Cosmos bank module) or the child ERC-20 contract on the Injective EVM.

The transfer flow for moving a token to the is as follows at a high level:

A LogLock event is emitted when the ERC-20 is sent to the Injective Bridge Contract.

Listening to the event, an Injective relayer prepares and signs a Tendermint transaction encoding the data, which is subsequently broadcast to the Injective Chain.

Legitimacy of the transaction is verified by the nodes of the Injective Chain.

In the bank module, new coins representing the ERC-20 are created.

Following that, the ERC-20 can be used on the Injective Chain’s EVM and the Cosmos-SDK-based application logic. The Injective Chain will facilitate cross-chain transfers via Cosmos IBC in the future.

Injective Chain to Ethereum

The basic procedure for transferring ETH/ERC-20 tokens from the Injective Chain to Ethereum is as follows,

Validators sign a data package containing the information after seeing transactions on the Injective Chain.

The user’s ETH/ERC-20 is burned on the Injective Chain, freeing the ERC-20 on Ethereum.

The data package containing the validator’s signature is subsequently sent to the Ethereum blockchain’s Injective Bridge contracts.

The money is released/minted to the intended recipient’s Ethereum address once enough other validators have validated that the transaction’s information is correct.

5. Ecosystem & Partnership

Partner	Summary
Binance Smart Chain	On December 13, 2020, Injective announced a partnership with Binance Smart Chain (BSC) to facilitate the wider adoption of derivatives within the BSC ecosystem. As part of this collaboration, Binance Coin (BNB), the primary asset of Binance, became available on Injective's Solstice V2 Testnet. The Injective team expressed their intention to introduce new derivative products on BSC in the future. They also outlined plans to establish a bridge between Injective and BSC, enabling seamless cross-chain trading and token transfers between the two networks.
Matic	On December 18, 2020, Injective formed a partnership with Polygon (Matic Network) with the objective of expanding global layer-2 derivatives trading. As part of this collaboration, Injective listed Matic assets on the Injective Decentralized Exchange (DEX) to broaden the range of derivatives markets available. The listing provided Matic traders with an additional platform to engage with Matic tokens. A significant aspect of this integration involved leveraging Matic's layer-2 bridge on Ethereum which allows assets built on the Matic Network to be transferred to Injective, benefiting from their fully EVM-compatible infrastructure. The collaboration was also useful for the Injective team to explore new derivative products that utilize assets built on top of Matic.
Fantom	On January 5, 2021, Injective announced a strategic partnership with Fantom to integrate the Fantom Ethereum bridge into the Injective Decentralized Exchange (DEX). This integration aimed to bring Fantom-based assets, such as synthetics, to Injective users, leveraging Injective Chain's full EVM compatibility. The partnership enhances Injective's offerings in synthetic assets and DeFi applications.
PlasmaPay	On January 21, 2021, the Injective team partnered with PlasmaPay to enable fiat on-ramps for INJ. The partnership focused on adding the INJ token to the PlasmaPay platform while also enabling easy access to Injective’s derivatives exchange through the PlasmaPay dashboard.
AllianceBlock	On January 26, 2021, Injective teamed up with AllianceBlock to introduce decentralized oil and gas futures. This partnership enabled AllianceBlock to innovate and develop new derivative products previously unavailable in the ecosystem. These innovations included the creation of new crypto indices, and enhancing options for crypto investors. Additionally, AllianceBlock benefited by tapping into Injective's fully decentralized derivatives exchange, increasing liquidity. Injective plans to further expand its derivatives trading ecosystem by incorporating AllianceBlock's impermanent loss hedging product in the future.
Acala	On January 28, 2021, the Injective team partnered with Acala in order to bring its novel multi-collateral stablecoin (Acala Dollar) to Injective's Polkadot-based derivative products. This also expanded opportunities for Injective to create new derivative products alongside Acala, further increasing the use cases for aUSD.
UniLend	On January 29, 2021, the Injective team partnered with UniLend to unlock new yield farming opportunities for users who became able to utilize Injective's derivative products on the UniLend ecosystem for borrowing and lending. In addition, INJ was added to the UniLend platform.
Conflux	On February 1, 2021, Injective partnered with Conflux to expand their cross-chain derivatives trading universe. This collaboration was primarily focused on bridging over assets deployed on Conflux onto the Injective exchange in order to aid in the creation and trading of new derivative products.
Ocean Protocol	On February 4, 2021, the Injective team partnered with Ocean Protocol to create innovative data derivative products. As a part of the collaboration, users of Injective became able to trade data assets with leverage. In addition, users gained the ability to create entirely new derivative markets that utilize these data tokens. The integration of the price feeds from Ocean was made possible by Balancer which is built on top of Ethereum. Given Injective Chain's EVM-compatible execution environment for DeFi applications, Injective could acquire dynamic pricing data in order to create both perpetual and expiry futures contracts.
Covalent	On February 5, 2021, Injective announced a technical partnership with Covalent, a unified API that seeks to bring full transparency and visibility to assets across all blockchain networks. By partnering with Covalent, Injective gained further access to real-time and granular blockchain data through the enterprise-grade Covalent API. Such data does not only provide valuable insight into the domain of DeFi (Decentralized Finance), but traders became able to export their trading data with full historical context which allows benchmarking of investor performance and record-keeping as evidence for tax purposes.
Huobi Eco Chain	On February 7, 2021, Injective integrated with Huobi Eco Chain to accelerate cross-chain derivatives adoption. This collaboration enabled traders to seamlessly bridge over Heco assets onto Injective, enabling the creation of new derivative products. In addition, Injective became the first project to introduce decentralized derivatives trading to the Heco ecosystem.
Marlin	On February 11, 2021, Injective partnered with Marlin in order to enable unparalleled trading speeds on Injective derivatives DEX. This collaboration also allowed Injective to begin the integration process for Marlin's native POND token to be added to Injective. Users gained access to new derivative products that interact with the POND token as an underlying, thereby helping to increase the overall utility of POND itself.
Avalanche	On February 18, 2021, Injective integrated with Avalanche to create a diverse array of interoperable derivative products. Injective integrated with the newly released Avalanche-Ethereum Bridge (AEB) to create a two-way transfer zone between the Injective Chain and Avalanche. With this integration, Injective launched derivatives that utilize the native Avalanche token (AVAX) as well as other native Avalanche assets. Injective also explored the addition of entirely new derivative products, such as products related to Initial Litigation Offerings (ILOs).
PARSIQ	On March 16, 2021, Injective partnered with Parsiq to enable fully automated decentralized trading. Users can set custom rules such as executing a buy order when the underlying Bitcoin (BTC) is trading at a premium compared to the future. Users can also use a combination of tools to create truly unique solutions across different platforms. Injective also plans to create new derivatives using the native PARSIQ token for use in sophisticated structured products such as indices. They also planned to explore connecting a number of new off-chain apps and devices to allow the creation of more complicated IFTTT functions as well.
SuperFarm	On March 17, 2021, the Injective team launched an exclusive Injective Non-Fungible Tokens (NFTs) through the partnership with SuperFarm. Users became able to farm Injective NFTs which provided them with unique benefits such as increased odds of receiving surprise token drops when staking on Equinox. The team also explored the creation and trading of NFTs on the Injective Chain which can allow for the creation of NFTs with unparalleled transaction times and zero gas fees given their unique layer-2 structure. Internally Injective had been carrying out major NFT collaborations such as the widely reported Banksy burning which occurred earlier in March 2021.
Cartesi	On March 20, 2021, Injective joined forces with Cartesi to enable mainstream developer adoption of the Injective Chain. Both companies studied together how to integrate Cartesi’s tools into the Injective ecosystem. The aim was to allow developers to utilize familiar programming tools from the world's leading OS, unlocking big smart contract capabilities offered by the highly interoperable and flexible Injective Chain. This included new frontend interfaces as well as new trading mechanisms altogether, such as an Automated Market Maker.
KardiaChain	On March 21, 2021, Injective partnered with KardiaChain to expand cross-chain trading. KardiaChain was integrated into Injective, offering users more trading assets, including KardiaChain token derivatives. This collaboration allowed KardiaChain to leverage Injective's layer-2 solution for scalability, supporting DeFi and enterprise solutions, such as their mobile payment gateway in partnership with a major Vietnamese telco.
Kylin Network	On March 29, 2021, Injective partnered with Kylin Network to integrate with the Polkadot data economy. Injective also aims to create a number of unique derivative products that can utilize the native Kylin token.
Razor Network	On March 31, 2021, Injective partnered with Razor Network to further expand the oracle ecosystem. The partnership between Razor Network and Injective enabled the Injective DEX to access more assets in a secure and reliable manner given Razor’s innovative oracle solution. Furthermore, Injective also plans to create new derivative products using the native Razor token. The Injective community will now have access to new indices and sophisticated financial products that are exclusively available through Injective.
EasyFi	On April 1, 2021, Injective partnered with EasyFi to introduce the first-ever decentralized synthetic stock future lending products. EasyFi added new markets to its lending module with Injective’s tokenized derivatives acting as collateral markets. Users who hold these derivative tokens of stock futures can add liquidity to the supply side of EasyFi’s lending protocol and borrow assets on the borrowing side.
Big Data Protocol	On April 2, 2021, Injective partnered with Big Data Protocol (BDP) to create and launch structured data token products. Injective and BDP users can soon create and trade data derivatives based on the BDP Data Market. Injective users became able to trade data tokens (based on bALPHA and BDP Data Market data tokens) with leverage. In addition, users got the ability to create entirely new derivative markets that utilize these data tokens. The partnership between BDP and Injective also strengthened the Injective oracle ecosystem which is comprised of leading products such as Chainlink, Band Protocol, and DIA.
Persistence	On April 6, 2021, Injective partnered with Persistence to launch liquid staked assets (facilitated by Persistence's pStake application) as a derivative product on Injective. This enabled stakers to unlock the ability to trade their staked assets on Injective's high-performance layer-2 exchange. Therefore, Persistence token holders (and holders of other tokens supported by Persistence’s pStake application) became able to freely trade their staked assets for the first time.
Band Protocol	On April 8, 2021, Injective partnered with Band Protocol to operate validator nodes on one another’s networks. Moving forward, this dual validator arrangement will serve to align and strengthen long-term goals for both parties. The Band Protocol team has already set up a node for Injective and has begun to participate in Equinox Staking. Together with Band Protocol, Terra, and Mirror Protocol, Injective launched the world's first decentralized stock futures trading.
Harmony	On April 12, 2021, Injective partnered with Harmony to integrate specifically with Harmony's Horizon bridge, which serves as a bridge between Harmony and Ethereum. Since Injective is already integrated with the Binance Smart Chain (BSC) network, the team is also able to utilize Harmony's BSC bridge in order to port over assets to be traded on the derivatives exchange.
API3	On April 16, 2021, Injective partnered with API3. Adding API3 to the Injective Data Alliance helped to further expand the possibilities of Injective's decentralized derivatives exchange. With API3's dAPIs and Airnode-enabled APIs, Injective users attained access to APIs and data feeds that enable a wide range of prediction markets, more complex derivatives, and creative financial experiments.
Klaytn	On April 21, 2021, Injective partnered with Klaytn to bring decentralized trading to millions of users within the Klaytn ecosystem. By integrating Injective’s decentralized derivatives protocol, Klaytn users will be able to access a diverse array of new financial markets. In addition, users on Injective will be able to create new markets using assets built on the Klaytn blockchain.
UMA	In April 2021, Injective partnered with UMA to launch innovative synthetic products. By integrating with Injective’s decentralized derivatives exchange, synthetic assets on UMA was made available to users. Notable synthetics that both teams introduced include uGas, a solution for hedging against Ethereum gas fees. In addition, Injective integrated an ETH/BTC index to provide an avenue for traders to attain a token that tracks the ETH/BTC price ratio.
Helix on Injective	On September 1, 2022, Helix — a platform for trading unlimited cross-chain crypto assets and perpetual markets with market-leading rebates, went live on Injective. The collaboration provided features like advanced conditional orders and Helix convert which allow anyone to take part in a range of sophisticated trading setups, and also lets users swap assets freely respectively.
Injective x Astroport	On March 9, 2023, the Astroport mainnet went live on Injective. Astroport is an AMM protocol that allows any user to swap or LP crypto assets using multiple pool types, including Curve-style stableswap pools and Uniswap V2-style constant product pools. The collaboration enabled users to take advantage of Injective’s interoperable network, swapping assets from Cosmos, Ethereum, Solana, etc. through Injective’s Wormhole integration. Users can bridge assets to Injective via the Injective Bridge. Then, they can create liquidity pools on Astroport to begin earning as LPs and start trading new markets. [68] Before the mainnet launch, the Astroport beta launched on Injective on January 18, 2023. And many more partnerships.

6. Roadmap & Future Plan

The Injective Protocol team has a number of ambitious plans for the future. Here is a brief overview of some of the key milestones in the Injective Protocol roadmap:

In addition to these milestones, the Injective Protocol team is also working on a number of other initiatives, including: 1. Development of new derivatives products: The team is working on developing new derivatives products, such as options and synthetic assets. 2. Expansion of the Injective ecosystem: The team is working to expand the Injective ecosystem by partnering with other projects and developing new applications. 3. Research and development: The team is actively conducting research and development on new technologies and protocols that can be used to improve the Injective Protocol. The Injective Protocol roadmap is ambitious, but the team has a track record of success in executing on its plans. The team is committed to building a decentralized and trustless platform for trading derivatives, and it is well-positioned to become a major player in the derivatives market.

7. Risk, Challenges, & Red Flag

Risk challenges:

Limited adoption: The INJ token is still relatively new and has not yet been widely adopted. This means that there is a risk that the token will not be able to maintain its value in the long term.

High volatility: The INJ token price is highly volatile, which means that it can fluctuate wildly in value. This makes it a risky investment for users who are not comfortable with volatility.

Competition from other tokens: There are a number of other tokens that offer similar functionality to the INJ token. This could lead to competition for users and liquidity, which could harm the value of the INJ token.

Potential Red flags:

Token inflation: The Injective Protocol team has implemented a token inflation mechanism, which means that the supply of INJ tokens will increase over time (2% per yr). This could dilute the value of the INJ token. Even though they are constantly deflating the token by the burn mechanism for every fees order run in the platform.

Limited utility: The INJ token currently has limited utility. It is primarily used to pay fees on the Injective Protocol exchange. If the team does not develop new use cases for the INJ token, it could lead to a decrease in demand for the token just like Uniswap’s.

According to CoinMarketCap, the total fees generated on the Injective Protocol exchange year to date (YTD) as of October 31, 2023 is $12,432,697 (vs all time of $23,291,312). This figure is based on the 0.1% trading fee that is charged on all trades.

The Injective Protocol team uses 60% of the trading fees generated on the exchange to burn INJ tokens. This helps to reduce the supply of INJ tokens and increase their value. The remaining 40% of the trading fees are used to incentivize liquidity providers and developers. This helps to ensure that the Injective Protocol exchange has enough liquidity to support trading and that new features and applications are being developed for the ecosystem.

It basically means with 1.1B Marketcap, Inj is valued 4700x of its current performance.

Conviction Table

Category	Conviction
Team	80%
Usability (Problem Solved)	90%
Community	80%
Growth	85%
Project Conviction	80%
Price Prediction: Upside based on current price: Max allocation in portfolio:	$100-200 7x 10%

If Crypto Marketcap 3-5x in the next cycle to $3-5T, INJ probably can 10-20x to $10-20B Marketcap as it is one of the current top defi which should perform conservatively similar to all L1 in previous cycle of doing 10-30x.

References

Injective Protocol Whitepaper Article on INJ's Governance Model Injective Protocol GitHub Repository Injective Protocol Twitter Account Injective Protocol Discord Server Injective Protocol Blog Injective Protocol Documentation Roadmap

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