Injective Protocol

INJ is the native token of Injective Protocol, a blockchain protocol optimized for trading assets across different blockchains. It specializes in tokenized derivatives, including stock tokens – cryptocurrencies pegged to the price of stocks like Apple and Google.

INJ was worth $0.77 when it launched in October 2020. The token rose to a high of $25.01 on April 30, 2021, just as the crypto market swelled to an all-time high. The token’s price was volatile for the rest of 2021 but trended downward. INJ slumped even further in May 2022, when it fell to lows of $1.55.

However, INJ’s deflationary measure (more on that later) meant that its market cap peaked in November 2021 at $590 million, up from its April peak of $521 million – even though its price wasn’t as high.

INJ’s market cap sank to about $120 million when the token crashed in May 2022. So did Injective’s total valued locked (TVL), which cratered from highs of $182 million in February 2022 to $64 million in June 2022.

Injective launched the token with an initial supply of 100 million INJ tokens. It aims to increase these over time through block rewards – where new INJ tokens are issued to those that validate batches of transactions on its proof-of-stake side chain.

At launch, Injective targeted the rate of annual inflation at 7%, and aims to decrease this to 2% “over time.” Injective also incorporated a deflationary measure to counteract rampant inflation. Every two weeks, the protocol sells 60% of the trading fees it accumulates for INJ, then burns that INJ to deflate the token’s total supply.

Injective is a layer 1, or base layer, protocol built on Cosmos, a blockchain network that rivals Ethereum. Unlike Ethereum, Cosmos protocols run on independent blockchains with their own set of validators. The blockchain powers a decentralized exchange that offers perpetual swaps – a futures contract that never expires – futures and spot trading, among other services. Trading fees are at least 0.1% for makers and 0.2% for takers.

Injective’s consensus mechanism relies on Tendermint, a Byzantine-Fault Tolerant algorithm that works even if a third of validators turn malicious.

Injective is also compatible with the Inter-Blockchain Communication (IBC) protocol. This allows Injective to communicate with other IBC-compatible chains. An Ethereum token bridge lets holders of ERC-20 tokens trade their holdings on Injective.

INJ is the platform’s governance token. Holders can vote on how the protocol is run; proposals can, for instance, alter the parameters of its decentralized exchange module, decide on new market listings and upgrade the protocol’s software.

The token was initially released as an ERC-20 token. However, after the launch of its mainnet on Cosmos, holders can use the platform’s Ethereum bridge to swap the tokens for native INJ coins.

Injective was created by Injective Labs, founded in 2018 by Eric Chen, a computer science dropout in his early 20s.

Injective counts billionaire entrepreneur and “Shark Tank” panelist Mark Cuban among investors, as well as Binance Labs, AU21 Capital and Pantera Capital. The investors participated in a $10 million funding found in April 2021 that valued the protocol at $1 billion.

Injective Protocol launched its mainnet in November 2021, alongside a $120 million protocol incentive program called Astro.

In October 2021, Injective released a front-end interface called Injective Pro. It restricts U.S. users to comply with Commodity Futures Trading Commission guidelines. However, its back end is permissionless, meaning that U.S. traders can still use the protocol.

In May 2022, Injective partnered with cross-chain bridge Wormhole to add 10 new blockchains to its protocol, including Solana, Avalanche and Polygon.