Injective Report: An L1 Built for Financial Applications
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Injective Report: An L1 Built for Financial Applications
The industry is moving away from excessively high DeFi yields derived from highly inflationary assets, and Injective is positioned to offer products typically seen in traditional finance—all with extremely low gas fees.
Navigating Web3 tides with focused insightsWritten by: Jake Pahor
Compiled by: TechFlow
Institutions are injecting capital into decentralized order books. And Injective? They’ve developed one of the best order book infrastructures available. I believe a 350% gain over one year is just the beginning. Here’s my August 2023 research report on INJ.
Injective is a blockchain purpose-built for financial applications. Its key features include:
• One of the fastest L1 blockchains;
• A decentralized and modular order book;
• Instant transaction finality via Tendermint;
• Cross-chain interoperability across multiple networks.
Its value proposition centers on delivering cutting-edge, next-generation financial infrastructure for the next cycle of user adoption. Injective is committed to building applications that attract new users and accelerate institutional adoption.
The industry is moving away from excessively high DeFi yields driven by inflated assets. Injective is well-positioned to deliver products typically seen in traditional finance—such as order book-based spot and derivatives markets—all supported by extremely low gas fees.
Current Total Value Locked (TVL) stands at $21 million (more than doubling since March). The majority of TVL (83%) is currently held in Helix, the top decentralized exchange on Injective. $INJ has followed this positive trend, emerging as one of the better-performing tokens this year (+357% over 1 year).
Maker fees are set at 0.1%, while taker fees are 0.2%.
• 40% of dApp fees on INJ → Developer incentives;
• 60% of dApp fees on INJ → Weekly auction via buyback and burn mechanism.
Approximately $35,000 in trading fees were generated last week.
INJ is the native and deflationary asset powering the Injective ecosystem. It is used for:
• Securing network safety;
• Paying gas fees;
• Governance.
It operates as a PoS network, currently offering an annual staking yield of 16%.
Injective also implements the highest weekly token burn rate in the industry today. 60% of protocol revenue from transaction fees is auctioned off in INJ and then burned. To date, over $5.7 million worth of INJ tokens have been burned (out of $12.4 million total allocated).
Here are the current supply metrics:
• Circulating Supply = 83.76 million;
• Max Supply = 100 million;
• Market Cap = $607 million;
• FDV = $725 million;
• Market Cap / FDV = 0.84.
The final unlock period is scheduled for January 2024.
Injective's treasury consists of:
• 15.2 million INJ tokens;
• Total value of $105 million.
It is heavily concentrated in its native token, which may pose significant diversification risk.
Injective has established a global DAO, enabling community participation in:
• Protocol upgrade proposals;
• Network validation (Proof-of-Stake rewards);
• Burn auctions.
The minimum deposit requirement is 500 INJ, with each voting period lasting over four days.
Injective Labs was founded in 2018 and incubated the same year by Binance Labs. The project gained notable investors after becoming the first project to launch on Binance Launchpad in October 2020.
Across multiple funding rounds, INJ has raised approximately $56.7 million. It recently announced two major incentive programs:
• A $120 million Cosmos ecosystem incentive program;
• A $150 million ecosystem fund initiative with partners (Pantera, Jump, Kucoin, Delphi Labs).
Injective faces competition on two fronts. First, from traditional EVM-based perpetual protocols such as GMX, Gains, and Synthetix. Second, from newer competitors building customized application-specific chains, including dYdX, Kujira, and Sei (decentralized order books).
While dYdX remains the clear leader in terms of Total Value Locked (TVL) and revenue, Injective boasts a substantial treasury and strong backing from heavyweight institutions. To keep pace with powerful rivals, Injective must continue innovating.
The project has undergone audits and received a security score of 73.82 from CertiK. It ranks highly (top 10%) in code security, fundamental health, operational resilience, and governance strength. However, it scores in the bottom 5% for market stability.
Overall, I am very bullish on Injective and the ecosystem it is building. Key bullish catalysts include:
• Institutional adoption;
• The $150 million Injective Venture Group;
• Token burns;
• Expansion of ecosystem integrations.
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@jake_pahor
