Injective Protocol (INJ)

Injective Protocol is a fully decentralized layer-2 DEX protocol built for the next generation of decentralized derivatives exchange. The Injective Chain is a Tendermint-based IBC-compatible blockchain that supports a decentralized orderbook-based DEX protocol and a trustless ERC-20 token bridge to the Ethereum blockchain.

Basics

• Based in:
• Founded in: 2018, Q3
• Their main offering of a DEX is not live yet (19-10-2020), you can sign up on their waitlist.
• Canary Chain release: 30-6-2021. Dubbed the "Canary Chain", Injective Protocol currently only supports the Peggy Bridge, staking, governance, the oracle module, and the insurance fund.
• Mainnet Canary Chain: Spot Trading Launch (28-7-2021).
• Mainnet release: 17-11-2021
• A L2 decentralized derivatives exchange protocol incubated by Binance Labs.

• From Crypto Briefing (14-10-2020):

"Injective Protocol is building an environment for builders to erect powerful DEXes capable of derivatives products. Ethereum traders seeking a decentralized alternative to leaders like Uniswap, plus more complex trading products, may find Injective's value proposition enticing.  Disclosure: One or more members of the Crypto Briefing Management team are investors in Injective Protocol."

Audits & Exploits

• Bug bounty program can be found [insert here].
• Injective is Audited by Informal Systems (28-7-2021).

Governance

DAO

• Is planning (12-10-2020) a DAO in 2021 Q4.

Token

Launch

• From Crypto Briefing (14-10-2020): It has not been officially launched yet. 

Token allocation

• From Binance Research (12-10-2020):

Binance Launchpad Sale	9.00% of the total token supply
Seed Sale	6.00% of the total token supply
Private Sale	16.67% of the total token supply
Team	20.00% of the total token supply
Advisors	2.00% of the total token supply
Ecosystem Development	36.33% of the total token supply
Community Growth	10.00% of the total token supply

Utility

• Node operators earn fees for routing and matching orders.
• According (12-10-2020) to Binance Research: Governance, exchange fee has buy-back-and-burn and staking.
• More can be read in their tokenomics section of their documents (19-10-2020).
• From Citadel One (12-7-2021):

"Protocol governance, Exchange fee value capture, Derivative collateralization, Liquidity mining, Staking."

Tech

• Whitepaper can be found here (2018 Q3).
• Code can be viewed here.

Implementations

• Built on: The protocol leverages the Cosmos SDK and 0x order book design (14-10-2020).
• Programming language used: Vue, Go, Solidity, SCSS, Python, Shell, JavaScript and Rust.

How it works

• From Crypto Briefing (14-10-2020):

"Injective’s architecture isn’t an automated market maker (AMM). Instead, it leverages a key feature from 0x protocol and is order book-based. In the Injective environment, relayers are replaced by nodes. Node operators earn fees for routing and matching orders. And like 0x relayers, node operators could each be independent DEXes within a larger network."

• Injective Protocol is comprised of four principal components (12-10-2020):

1. "Injective Chain
2. Injective's smart contracts on Ethereum
3. Injective API nodes
4. Injective front-end interface

The Injective Chain is a fully decentralized sidechain relayer network which serves as a layer-2 derivatives platform, a Trade Execution Coordinator (TEC), and decentralized orderbook. Injective Chain utilizes the Tendermint consensus mechanism and the core protocol logic is implemented through Cosmos-SDK modules."

Upgrades

• A list on it's 2021 achievements can be viewed here (4-3-2022). It includes testnets, partnerships and funding rounds. "Injective burn auctions begin (12-2021) and over $700,000 worth of INJ is burned in less than a month"
• Dubbed the "Canary Chain", Injective Protocol currently (7-2021) only supports the Peggy Bridge, staking, governance, the oracle module, and the insurance fund.

Staking

• Unbonding Period 21 days and can change through governance (12-7-2021).

Validator stats

• Injective Protocol currently has 19 validators in Equinox Staking (12-7-2021).

Liquidity Mining

• From Decrypt (17-11-2021):

"Injective is launching an incentives program called Astro, which is worth $120 million to entice users to join the platform. The incentives program is expected to run for the next five years."

• From Binance Research (12-10-2020):

"Injective’s community will be able to capture value via liquidity mining programs that have been natively built onto the network to spur continuous growth."

Interoperability

• From Binance Research (12-10-2020):

"The Injective Chain provides a two-way Ethereum peg-zone for ETH and ERC-20 tokens to be transferred to the Injective Chain as well as an EVM-compatible execution environment for DeFi applications. The peg-zone is based on Peggy and the EVM execution is based on Ethermint."

• From State of Stake (29-10-2020):

"Injective integrates with Polkadot to expand Injective’s decentralized cross-chain trading capabilities — it’s made possible by Moonbeam, which provides an Ethereum-compatible smart contract platform powered by Polkadot that makes it easy to build natively interoperable applications."

• From Paradigm (24-2-2021): "Injective will integrate with the newly released Avalanche-Ethereum Bridge (AEB) to create a two-way transfer zone between the Injective Chain and Avalanche."
• Will create a bridge with Moonbeam (18-10-2020).

Scaling

• Injective partnered with Matic to expand Layer-2 Derivatives trading globally.

Other Details

• Uses (19-10-2020) OpenZeppelin contracts, The Graph and Hummingbot.

Oracle Method

• They do have documentation on using an oracle, but it is unclear what kind (19-10-2020).
• Bandchain will be used through IBC (15-11-2021).

Roadmap

• Can be found [Insert link here].
• From Crypto Briefing (14-10-2020):

"Outside of spot trading, they will also allow builders to create more complex derivatives products. Only perpetual swaps and contracts for difference (CFD) are currently available."

• From Binance Research (12-10-2020):

"2020 Q4

• Release of public testnet V1.
• Launch of Incentivized Testnet Trading Competition.
• Launch of ERC-20 token.

2021 Q1

• Release of public testnet V2.
• Release of Incentivized Staking Competition and Ethereum bridge.

2021 Q2

• Launch of mainnet V1.
• Implemention of bridges to multiple blockchain networks.
• Adding of liquidity mining (yield farming) and staking incentives.
• Swapping of token, from ERC-20 to native chain.

2021 Q3

• Launch of 10+ perpetual swaps and expiry futures.
• Launch of cross-chain yield generation.

2021 Q4

• Launch of DAO governance for community governed listings and market creation.
• Launch of staking pools on insurance funds.

2022 Q1

• Launch of institutional exchange interface.
• Launch of crypto-backed traditional financial derivatives."

Usage

Projects that use or built on it

• As Injective is a protocol, other DEXs could be build on the Injective Protocol. You can view all ecosystem projects and collaborators on the official Injective ecosystem page.

Competition

• 0x, Uniswap
• DEXs, derivative exhanges

Pros and Cons

Pros

• Most market leaders, like Uniswap, do not offer derivatives products.
• Claims (14-10-2020) to be scalable (Cosmos SDK), interoperable and that it can evade front-running; "To solve this problem, Injective introduces Verifiable Delay Functions (VDFs). VDFs are essentially time stamps that can be placed on transactions to ensure an orderly and fair sequence of orders." 

Cons

• Early stage and faces an uphill battle to attract users away from Ethereum (19-10-2020).
• Zero gas fees (19-10-2020).

Team, Funding, Partnerships, etc.

Team

• Full team can be found here (19-10-2020).
• Eric Chen; CEO & co-founder

Advisors

According to their website (19-10-2020):

• Andreas Weigend; ex-chief scientist Amazon
• Bobby Cho; partner at CMS
• Sandeep Naiwal; co-founder Matic
• Calvin Liu; Compound strategy lead
• Eric Wang; Parity Technologies ecosystem development lead

Funding

• Has raised $2.6 million in a seed funding round. Led by Pantera Capital, the round also saw Asia-based QCP Soteria, Axia8 Ventures and Boxone Ventures, Bitlink Capital and others participate, Injective announced Wednesday.
• "One or more members of the Crypto Briefing Management team are investors in Injective Protocol." (14-10-2020)
• From twitter (20-4-2021):

"Injective Protocol has raised $10M during private fundraising round. @mcuban, @PanteraCapital, @BlockTower, @hashed_official, @cmsholdings, and @QCPCapital, participated in the round. The tokens were sold with 1 year lockup period at a $1B+ valuation."

• From Decrypt (17-11-2021):

"Injective is launching an incentives program called Astro, which is worth $120 million to entice users to join the platform. The incentives program is expected to run for the next five years."

Partners 

• On its website it called the following companies its 'family' (19-10-2020): Binance, Pantera, Hashed, XCP Capital, StartX, K42, CMS and Bitlink Capital. 
• Kava announced (26-8-2020) the strategic cooperation with Injective Labs, creators of Injective Protocol. 
• According to Binance Research (12-10-2020) it is partners with Elrond, Findora, Frontier and Wootrade. 
• Partnered with Terra, Mirror Protocol, and Band Protocol to access the $90 trillion stock market in a permissionless manner. They all have links going back to Stanford (10-1-2021).