Injective Q1/2024: A continued upward momentum of a blockchain built for finance

At the beginning of 2023, Injective launched a 150 million USD Venture Group to support dApps built on the ecosystem. With this initiative and numerous technical breakthroughs, Injective experienced extremely strong growth in 2023.

In 2024, Injective is continuing the upward momentum in the current bull run season, with major releases occurring nearly every other day, and expanding its ecosystem aggressively.

Note: This article only provides information and perspective, not financial advice.

Overview Injective

L1 Blockchain Injective

Injective is the L1 blockchain that has uniquely optimized the core Cosmos tech stack to rapidly scale beyond existing L1 networks today. It is built to be a platform that provides plug-and-play Web3 modules for developers to simplify their dApp development process. To do this, Injective offers financial primitives, such as on-chain decentralized exchange infrastructure, a decentralized bridge, oracles, and a composable smart contract layer with CosmWasm.

After more than 2 years of mainnet operation, Injective blockchain has performed over 500 million transactions, attracted 50 million INJ staking on the network, and burned 5.8 million INJ in total. The burn auction mechanism helps INJ to be one of the L1 blockchain tokens with the highest deflation rate in the market.

Team & Backers

Injective Labs is one of the core contributors to the Injective blockchain. The project team is one of Injective's bright spots, with names that have worked at large companies such as Goldman Sachs, Amazon, Two Sigma, Tesla and more...

Injective not only boasts an exceptionally specialized team, but also benefits from the backing of prominent industry players, including Binance, Jump Crypto, Pantera, and Mark Cuban. Injective is also one of the first projects invested in by Binance Labs and featured on Binance Launchpad.

Comparison with other L1 Blockchains

Compared with other major L1 Blockchains, Injective is more prominent in the following aspects:

• Maximum transaction speed: 25,000 TPS
• Block time (time to complete a block): 0.8 seconds
• Near-zero transaction fee: 0.0003 USD (after launching Gas Compression in January 2024)
• Unprecedented interoperability between most major L1 blockchains through multichain bridges

Based on the comparison, it can be seen that Injective is superior to blockchains in some characteristics, such as MEV prevention ability, and compatibility with smart contracts on many different chains thanks to supporting many types of virtual machines (multiple VMs).

Injective also provides institutional gateways to large financial organizations, offering on-chain financial applications, unified liquidity, and access to global financial primitives…

Key updates of Injective Q1 2024

Injective not only has distinct technical advantages compared to other L1 blockchains, but has also seen notable developments and shipped several powerful upgrades recently. Generally, Injective integrates most of the major crypto players and some of the largest financial institutions to build a large ecosystem and create massive value for developers, traders, individuals, and institutions. 

Technology highlights

Near zero gas fees

After the Gas Compression release, Injective has extremely lower gas fees relative to notable competitors. The fee users have to pay for each transaction is approximately 0 (0.0003 USD - even lower than Solana).

Injective costs 0.3 USD to mint 1,000 NFTs, several times less than Ethereum and 50% less than Solana. The combination of short block time and the lowest transaction fees opens up opportunities for developers to create highly scalable applications while lowering the entry barriers for individual users’ on-chain experience.

Compatible with multiple smart contract platforms

With inSVM (Injective SVM) and inEVM (Injective EVM), developers from EVM-compatible chains and Solana can effortlessly build on Injective and deploy their existing dApps without any additional effort. This positions Injective as highly accessible to developers, as the majority of them work within one of these three VMs. 

As a result, Injective has the unique capability to unify the interoperability of Cosmos with the speed of Solana and the developer access of Ethereum.

When building on inEVM or inSVM, projects can leverage Injective's strengths, notably the connection with many other chains on Cosmos via IBC, and its Web3 modules. Although just launched, inEVM has already attracted many projects, notably TimeSwap and Thetanauts.

These projects have raised a total of more than 200 million USD from investors, including Polychain Capital, Delphi Digital, and Bain Capital Crypto. This shows that inEVM will become one of Injective's next growth drivers.

Resistance to MEV

With its frequent batch auction (FBA) approach, Injective removes the impact of MEV. FBA employs discrete time intervals (auction interval), during which orders are collected. At the end of this interval, orders are filled with the following priority:

• Market orders will be executed first
• Next come unfilled limit orders from previous auction periods
• Limit orders from the most recent auction period will be executed last.

After all orders are filled, they are executed simultaneously, and only then are they published to the order book. This process transforms what is typically a chaotic procedure, as observed in Continuous Double Auctions (CDAs), into a structured system. By doing so, it significantly reduces the potential for miners to manipulate transaction ordering for personal gain.

 Consequently, FBA enables Injective to provide an environment tailored for sophisticated transactions, allowing larger financial institutions to integrate without encountering common issues experienced on other blockchains today.

Volan Mainnet Upgrade

Launched in January 2024, Volan is Injective's most notable recent mainnet improvement. With the new version, Injective expands RWA infrastructure support with the world’s first RWA module, enhances IBC expansion with Injective's other financial modules, and improves the token-burning mechanism.

INJ Tokenomics 3.0

In the first phase, launched in October 2020, INJ was used for the following purposes:

• Governance: Participation in voting on Injective governance proposals.
• Accrual value from transaction fees: 60% of transaction fees collected from Injective dApps utilized for INJ buyback and burn, making INJ one of the L1 tokens with the highest deflation rate market.
• Staking (Security): Nodes must stake INJ to participate in Injective's security process and receive block rewards in the form of INJ tokens.
• Developer Incentives: rewards in the form of INJ for dApp developers on the Injective ecosystem.

In August 2023, Injective introduced INJ Tokenomics 2.0, which can dramatically increase the amount of INJ burned weekly. This version allows many types of dApps to participate in the burn token auction, reducing the INJ supply. DApps can now contribute 100% of earning fees to INJ's burn pool. This update benefits the Injective ecosystem by making INJ ultrasound money.

In April 2024, Injective released INJ 3.0. This INJ 3.0 governance proposal aimed to decrease the supply of INJ over the next two years, with accelerated rates of deflation based on the ratio of staked INJ on-chain. As a result, as more INJ is staked, the deflationary properties will increase faster.

The supply decrease schedule of INJ 3.0 will follow an accelerated, yet tightly controlled reduction rate timeline to protect INJ against inflation. The bounds and timeline for the token supply rate change is as follows: 

• Lower Bound: Currently set at 5%, but will decrease 25% over two years on a uniform quarterly basis.
• Upper Bound: Currently set at 10%, but will decrease 30% over the same two-year period.

Schedule by quarter end, 2024-2026+

According to the project's tokenomics, as of March 2024, most of the INJ supply has been unlocked,  removing selling pressure from VCs and team members. Additionally, INJ is regularly removed from the total supply via the burn auction mechanism. Therefore, when the fee burn exceeds INJ issuance from block rewards, INJ achieves deflationary characteristics.

Additionally, 49.07% of the total INJ supply is currently being staked. Users holding INJ can stake through Injective Hub to receive a 15% APR as of date.

Institutional Adoption

Pioneering to drive innovation and solidify its position as the leading L1 for finance, Injective expands the infrastructure for the Real World Assets segment through the world’s first RWA Module via the Volan upgrade.

Institutions can easily launch and access a variety of structured products and RWAs (US Bonds, fiat trading pairs, Ondo Finance integrated assets, etc.) with extensive customization options on the blockchain. This makes it easier for organizations to access, integrate, and launch tokenized assets on Injective. 

The world’s leading financial institutions are working with Injective, including Jump, Brevan Howard, and Cumberland. Injective’s core infrastructure is uniquely optimized to offer institutions transparent reporting alongside instant settlement across all transactions. 

Over the past years, Injective has integrated some of the largest institutions directly onto its on-chain orderbook. New dApps released on Injective can directly tap into one unified liquidity layer, further accelerating capital efficiency.

150 million USD Venture Group to accelerate ecosystem growth

Users can also dive deeper into the DeFi ecosystem on Injective. In January 2023, Injective launched a 150 million USD Venture Group for projects to promote ecosystem development.

This suggests rapid growth for Injective ecosystem projects. Developers on Injective can apply for funding and receive assistance with the growth of their applications/projects through this Venture Group ecosystem fund.

Notably, a few projects have launched tokens on Injective. The first token, TALIS, introduced by Talis Protocol - the premier NFT marketplace on Injective - was launched at the end of December 2023. 

Since then, DOJO, NINJA, QUNT, HDRO, and others have been launched as ecosystem tokens. The opportunities remain for both the Injective projects and inEVM projects.

Outstanding Projects

Injective Ecosystem

The Injective ecosystem includes over 200 projects. 30+ dApps have been built on Injective mainnet already, with several major deployments coming up. 

Exchange projects on Injective have generated $24.8B in cumulative trading volume to date. Among them, Helix is the largest derivatives DEX with daily trading volume ranked Top 10 on CoinMarketCap, but has not yet launched a token. 

Projects that already have tokens still have a relatively small capitalization compared to INJ. Below are some DeFi/NFT/Game projects in the Injective ecosystem.

Explore more projects in the Injective ecosystem here.

Project on inEVM

After Injective officially launches inEVM - a virtual machine compatible with Ethereum, the above projects promise to become key players in the ecosystem due to their ability to attract users/developers from strong ecosystems such as Ethereum

inEVM was built in collaboration with some of the foremost infrastructure projects in Web3 today, including roll-up provider Caldera. In addition, prominent messaging layers such as Hyperlane and LayerZero have integrated with inEVM, allowing for the seamless transfer of data and assets. Celestia is set to serve as the Data Availability (DA) layer for the rollup, and Pyth as the oracle provider.

Although just launched, many applications have been attracted to deploy on inEVM. This group of projects has already received the attention of investment funds. Among these projects, Timeswap (AMM, Lending & Borrowing) and Thetanauts Finance (Options Protocol) have already received more than 200 million USD in funding from large funds such as Pantera, Jump, Wintermute, Polychain Capital, Delphi Digital, Bain Capital Crypto...

Below are some of the applications built on inEVM since day one of the inEVM mainnet launch that users can begin interacting with:

• Poolshark Protocol: Users can create positions that benefit from volatility.
• Interport: Cross-chain transactions across several supported networks.
• Relative Finance: Derivative trading market and prediction (prediction market).
• UpvsDown: Play2Earn game.

Summary

Injective is making very careful preparations for the upcoming bull market season, the project is full of technological improvements, following market trends, and supporting ecosystem development in every aspect.