Why Injective Protocol (INJ) Is an Incredible Investment Opportunity. Mainnet Launching Q2. Potential for Enormous Buy Back and Burn of INJ Each Month.

  • Protocol Governance: The INJ token can be used to govern various components of Injective’s chain including the futures protocol, exchange parameters, and protocol upgrades via a DAO structure
  • Collateral Backing for Derivatives: INJ will be utilized as an alternative to stablecoins as margin and collateral for Injective’s derivatives markets. In some futures markets, INJ can also be used for collateral backing or insurance pool staking where stakers can earn interest on their locked tokens
  • Exchange Participation Incentives: The foundation plans to incorporate a liquidity mining scheme and distribute a fixed number of INJ tokens daily weighted by the liquidity each network participant provides
  • Exchange Fee Value Capture: After the relayer reward distribution, the exchange fee will undergo an on-chain buy-back-and-burn event to accrue value for INJ

Transaction Fees

Whilst there are zero gas fees with using the Injective chain, there are transaction fees for trading based of the amount of volume traded, similar to other exchanges such as Binance. These are:

Incentives to provide liquidity and On-Chain Referral System

To encourage users to provide liquidity for the platform, Make orders will receive a net positive fee rebate as a % of the fee using INJ.

Buy Back and Burn of INJ

The remaining 60% of transaction fees will undergo an on-chain buy-back-and-burn event to accrue potentially enormous value for INJ. Exchange fees collected from all trading pairs are aggregated over a set period of time and sold in batch to market makers who bid with INJ tokens, all proceeds from the auction will be burnt creating deflationary pressures on the supply of INJ. Below we will look at what that could mean for INJ.

The current landscape

Uniswap and other DEX’s

Automated Market Makers such as Uniswap have seen incredible traction. They offer an easy decentralised way to trade crypto assets, with the security of the underlying blockchain and no KYC or restrictions on which countries can participate. They are easy to create, and decisions can be decided through governance (although UNI is a particularly bad example of this due to the ridiculous amount of tokens required to pass a vote).

How Much Would Get Burned Based off DEX Volumes

Uniswap, one of the largest DEX’s had volume of over $51.2 billion in April alone, with Pancakeswap doing even more with $57.65 Billion and a total DEX volume of $163.89 Billion. UNI doesn’t capture any value from the volume that is traded on the exchange though and is only used as a governance token. Whilst anyone can easily create new pairs to be traded, it’s still limited to spot volume, and assets on that blockchain.

  • $30.7 Million in referral rewards every month

$3.84 Trillion Spot Volume, $3.88 Trillion Derivatives Volume in April

Centralised Exchanges such as Binance

The market is far larger than a few DEXs doing spot trading though, including centralised exchanges there was $3.84 trillion in spot volume and $3.88 Trillion derivatives volume in April according to CryptoCompare. Binance has at times being doing $100 Billion a day on derivatives alone.

How Much Would Get Burned Based off CEX Volume

Again, before going into how Injective Protocol improves on this, let’s first calculate the effect of burning INJ based off those volumes. According to CryptoCompare Binance did $1 Trillion Spot volume in April as well as $1.65 Trillion in derivatives volume, for a combined figure of $2.65 Trillion for April.

  • $1.6 Billion in referral rewards every month

Injective Protocol — Combing the Best Features of DEX and CEX and Then Going Even Further with Unrestricted Access to Markets Worth Quadrillions of Dollars

Unrestricted Access to Markets Worth Quadrillions of Dollars

The barriers don’t just exist with DeFi and crytpo though, due to regulation, Chinese CeFi traders cannot access crypto markets easily, and US traders cannot easily gain exposure to Chinese equity markets. The UK has banned the trading of crypto derivatives completely and so on. With Injective’s global derivatives platform, anyone can gain exposure to any market regardless of the locality or limitations of the underlying asset, thereby creating a truly borderless financial system.

TLDR: Why Injective Protocol (INJ) Is an Incredible Investment Opportunity. Mainnet Launching Q2 and the Buy Back and Burn of INJ Worth 60% Of Trading Fees Begins.

Injective is a fully decentralised, front-running resistant, high performance, layer-2 exchange protocol that allows anyone can gain exposure to any market regardless of the locality or limitations of the underlying asset, thereby creating a truly borderless financial system.

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DLT Enthusiast and Writer. Interoperability is key for DLT to achieve its true potential. Avalanche $AVAX, Injective Protocol $INJ and Quant $QNT

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DLT Enthusiast and Writer. Interoperability is key for DLT to achieve its true potential. Avalanche $AVAX, Injective Protocol $INJ and Quant $QNT

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