Injective Protocol ($INJ) is a layer 1 blockchain for the Decentralized Finance (DeFi) industry. It offers various convenient features like cross-chain trading, MEV resistance, and community governance.
How the Injective Protocol Works
The Injective protocol utilizes cross-chain bridges that allow traders to exchange cryptocurrencies from other ecosystems like Polkdatot and Ethereum. Unlike most decentralized exchanges like PancakeSwap and Uniswap, the protocol does not rely on an automated market maker (AMM) to manage liquidity.
The protocol uses an order book architecture similar to centralized exchanges. Consequently, order-matching efficiency mirrors that of traditional finance, with the added transparency of the blockchain.
Another unique aspect of the Injective protocol is that users do not pay standard gas fees to execute transactions. Instead, traders pay a market maker and taker fee in INJ coins.
Components of the Injective Protocol
The protocol relies on several components to facilitate DeFi functionality. These are:
Injective Chain
INjective Chain is a decentralized exchange (DEX) protocol built on Cosmos that supports the transfer and trading of Ethereum-based tokens. Its goal is to address the scaling issues affecting most layer-1 blockchains while letting developers utilize the popular Ethereum developer kits.
Injective Exchange
The exchange uses an order book model based on the Ox protocol. All components of the Injective Exchange have been open-sourced as a means to build transparency. The components that have been open-sourced include the smart contract code, the order book system, and the UI.
Injective Exchange mitigates front running via the Trade Execution Coordinator (TEC) implementation. The implementation holds back orders, preventing new orders from being placed ahead of existing orders.
Injective Hub
This dashboard offers users an overview of the entire ecosystem. It also allows them to extract optimal utility from the Injective Protocol. Network validators use Injective Hub to stake INJ tokens. Stakers can delegate their coins to network validators and earn rewards. The hub is also, where the community makes and votes on proposals on the future direction of the protocol.
INJ Coins
INJ is the native coin of the Injective Protocol. Traders use to pay trading fees and for community governance. The initial supply was 100,000,000 INJ, with a target inflation of 7% on the Genesis block. The goal is a reduction of the supply to 2% of the initial supply.
INJ is a deflationary coin. The deflationary mechanism includes auctioning 60% of the protocol fees weekly and burning the INJ coins of the winning bid. It aims to keep the supply of INJ in check, which can help to boost the price over time. There are also periodic coin burns to keep the INJ supply low.
The circulating supply of INJ is 83,755,556 INJ as of November 23, 2023. Each coin is worth $15.32, with a market cap of $1,282,736,263. The 24-hour trading volume is $65,639,550, down 33.60% in the past 24 hours. Most of the trading volume is on Binance and BTSE, which account for 43.39%.
INJ Price Performance
Based on the current price of $15.32, the price of INJ has gone down 10.32% in the past week and down 1.64% in the past 24 hours. However, the coin is up 48.02% in the past month and 800.64% in the past 12 months. Its current price is a 38% discount on the all-time high price of $25.01, which it attained on April 30, 2021.
INJ Price Prediction
INJ’s price prediction is a drop of 2.28% by November 28, 2023. Investors have a bearish sentiment regarding the coin. However, its Fear & Greed Index remains high at 66. In the past 30 days, it has been in the green 60% of the time, with an 11.40% volatility.
Should You Buy INJ Coins?
INJ has increased for most of the past 12 months, with an increase of over 800%. Based on its current performance, now might not be the best time to buy INJ. It is at the peak of its value, and trading volume has gone down.
However, that could change if the developer team announces something new. It is also worth noting that the crypto market is volatile, and the bears could lose out.
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