Math Show Series #027 — Injective and the Rise of Connected Finance

MathWallet Official
8 min readNov 23, 2022

Host Cici:

I’m Cici, the host of the math show today. Great pleasure to be here with Eric Chen, co-founder & CEO at Injective Labs. Today we will talk about Injective and the Rise of Connected Finance.

Could Eric introduce what is Injective and how it works?

Eric Chen | Injective:

Injective is a blockchain built for finance. It is an open, interoperable layer-one blockchain powering next-generation DeFi applications, including decentralized spot and derivatives exchanges, prediction markets, lending protocols, and more.

Injective uniquely provides powerful core financial infrastructure primitives that applications can leverage, including a fully decentralized MEV-resistant on-chain orderbook. In addition, all forms of financial markets such as spot, perpetual, futures and options are fully on-chain. The decentralized cross-chain bridging infrastructure is compatible with Ethereum, IBC-enabled blockchains, and non-EVM chains such as Solana.

Injective also provides a next-generation, highly interoperable smart contract platform based on CosmWasm, with advanced interchain capabilities. Injective is custom-built with the Cosmos SDK and utilizes Tendermint-based Proof-of-Stake consensus mechanism, providing instant transaction finality with the ability to sustain lightning-fast performance.

Host Cici:

What are the major milestones that Injective has achieved so far?

Eric Chen | Injective:

Processed over ​​123 million on-chain transactions

600,000+ INJ burned

Accumulated over $7.5 billion in trading volume

Over 50% of INJ total supply is staked on the Injective staking hub

Fiat rail integrated on Injective

Fastest blockchain with ~1s average block time, cheapest averaged fee per transaction of $0.0002

Interchain account support through IBC v3

Host Cici:

How is Injective different from other layer one blockchains?

Eric Chen | Injective:

Injective’s core exchange module provides state-of-the-art capabilities including an advanced on-chain order book and matching engine for spot, perpetual, futures and options markets, resistance to Miner-Extractable Value (MEV) through frequent batch auction order matching, and zero gas fees for users.

Injective is built with the Cosmos SDK and leverages a Tendermint-based Proof-of-Stake consensus mechanism, which allows it to achieve instant transaction finality while sustaining lightning-fast speeds (25,000+ TPS)

Injective natively uses IBC and is highly-interoperable with multiple layer 1s, including, but not limited to, Polygon and Solana (through an upcoming Wormhole integration). It is also uniquely built to be interoperable with Ethereum, through its own decentralized ERC-20 token bridge, making Injective the first network within the Cosmos ecosystem to natively support Ethereum assets.

Smart contracts are implemented on Injective through CosmWasm, allowing for multi-chain smart contract transactions to occur seamlessly. Injective, however, is the only blockchain that enables automatic smart contract execution. This capability serves as a powerful building block for developers to create novel use cases that would not be possible on any other chain.

Host Cici:

What are the advantages of building on Injective?

Eric Chen | Injective:

Injective has the best environment for DeFi developers with the most capital-efficient infrastructure for DeFi and Web3 applications.

It’s natively interoperable with Cosmos and Ethereum, has a CosmWasm smart contracts layer, and provides the essential infrastructure for developers to build on-chain DeFi apps with native orderbook/derivatives modules.

1. It’s built specifically with solutions for DeFi developers in mind.

2. On-chain solutions that you can plug and play, like an on-chain order book, binary options module, derivative trading capabilities, MEV resistance, etc.

3. It also has smart contracts capabilities — CosmWasm. But also a completely unique implementation of smart contracts that automatically execute those smart contracts at every block (instead of needing someone to manually force the execution).

4. highly interoperable (Ethereum, Cosmos IBC, Wormhole, etc)

5. Zero gas fees for exchange dapp users

6. Highly secure

7. Shared liquidity pool

Host Cici:

We’re excited to see the growth of the Injective ecosystem, what’s the current status look like?

Eric Chen | Injective:

The Injective ecosystem is filled with best-in-class DeFi applications and is continuing to grow rapidly. While many projects are still under development, applications ranging from DEXs, to predication markets are currently live, ready to use by the Injective community.

For a full list of ecosystem applications, please visit https://injective.com/ecosystem.

Here are a few projects currently deployed and live on Injective: Helix, Frontrunner, Dexterium, White Whale, Wavely, Qwerty Exchange.

Last month, Injective co-hosted xHack with Wormhole in Chicago. There were numerous creative projects that chose Injective to build and realize their idea. We’re excited to see these projects going live soon.

Host Cici:

INJ is the native token of Injective. What are the use-cases for $INJ?

Eric Chen | Injective:

INJ is the native utility token of Injective. INJ is a scarce asset that is used for governance, token burn auctions and staking on the PoS network.

The burn auctions on Injective are especially unique since 60% of all fees collected from dApps are auctioned off every week via a buy back and burn mechanism. This in turn allows the supply of INJ to dramatically decrease over time. The INJ burn auction is unique in that it helps accrue value for the entire Injective ecosystem. Currently, Injective has the highest token burn ratio in the industry.

The use cases intended for INJ include but are not limited to: protocol governance, dApp value capture, Proof-of-Stake (PoS) security, developer incentives and staking. Further details regarding each of these use cases can be found below.

- Protocol Governance: The INJ token governs every single component of Injective, including chain upgrades. Since its mainnet launch, the Injective community has actively contributed to governance, with all proposals passing through a DAO governance vote. The comprehensive governance page is available here.

- Protocol Fee Value Capture: 60% of all fees generated from dApps enter an on-chain buy-back-and-burn auction to maintain the deflationary nature of INJ. The burn auction page is available here.

- Tendermint-based Proof-of-Stake (PoS) Security: INJ is used to secure the Injective blockchain using a proof-of-stake mechanism. Validators and delegators can both participate in staking.

- Developer Incentives: 40% of fees generated by users on dApps built on Injective go directly towards incentivizing new developers building on Injective which brings an ever growing funnel of builders to Injective.

Host Cici:

Injective has won “the most promising product launch” at Cosmoverse recently. There’s a new product Project X the team has been working on. Can you share more details?

Eric Chen | Injective:

Project X is first revealed at Cosmoverse and we’re honored to win the reward. Project X is a combination of

- AMMs with 0 impermanent loss (IL)

- Strategy vaults for market making and passive yield

- A one click Launchpad to release new tokens (100X cheaper and 10X more capital efficient)

Project X will democratize the way both users and projects will interact with DeFi. Users will now gain access to strategies previously inaccessible for a general audience while developers will find the leading platform for launching new tokens. Project X will also help accelerate the growth of the overall Injective ecosystem as a diverse array of dApps become further interconnected with the ability to leverage the primitives of Project X to build exciting new innovations in decentralized finance.

Host Cici:

What Injective plans to focus on in the near future?

Eric Chen | Injective:

Injective’s community is over 150,000 members strong and has major hubs globally. Some future community growth initiatives include:

Growing the Injective institutional and developer user base via a diverse array of incentive programs.

Introducing an on-chain referral system for network participants to capture a high percentage of the fees that they bring to the ecosystem.

Launching new products around savings, stablecoins and lending to further strengthen the Injective ecosystem.

Host Cici:

Where can developers and users start to explore everything about Injective?

Eric Chen | Injective:

Keep updated for the latest news through Twitter: https://twitter.com/Injective_

Developer Resources:

Injective documentation: https://docs.injective.network/

Github: https://github.com/InjectiveLabs

Apply for Grant: https://www.opendefi.xyz/grants

Users:

Injective Hub: https://hub.injective.network/

INJ Faucet: https://inj.supply/

Host Cici:

Thank you for sharing. It’s very useful for the audience.

Then is the 2nd part. We have some questions selected from our community members here.

Q1. Many DEX in the market are not totally decentralized as they promise since in many aspects they have total control. So I would like to know what makes the Injective different? Are you really as totally decentralized as you promise?

Eric Chen | Injective:

Yes, Injective is a fully decentralized protocol which allows for individuals to access both the blockchain and dApps built on-chain in a permissionless manner. Injective uniquely provides powerful core financial infrastructure primitives that applications can leverage, including a fully decentralized MEV-resistant on-chain orderbook. In addition, all forms of financial markets such as spot, perpetual, futures and options are fully on-chain.

Host Cici:

Q2. Many projects are risky and subject to smart contracts bugs and vulnerability. Can you assure us what steps have been taken for the safety of this platform and have you done any Audit?

Eric Chen | Injective:

Injective has undergone rigorous testing to ensure that funds traded on the exchange are highly secure. And yes, Informal Systems has audited the Injective code base and the Injective chain.

Host Cici:

Q3.What are some of the recent business development progresses and partnerships?

Eric Chen | Injective:

There is ecosystem development as I mentioned above, that numerous projects have chosen Injective to build their DeFi applications.

For an example, Kado on/off-ramp solution has been launched on Injective recently, to simplify the user flow and further improve the user experience.

Host Cici:

Q4. What are some of the future milestones that we can look forward to?

Eric Chen | Injective:

Injective is continuing to grow the ecosystem and bringing more innovative projects built on top of Injective. We’re working with different teams on building best-in-class financial applications. Users can expect more diverse dApps in the Injective ecosystem and better user experience.

Interoperability is also the key. Now Injective has native connections to Etheruem, Cosmos, Polkadot and more. The upcoming integration with Wormhole will bring an additional 10 new blockchains to Injective’s interoperable network, making Injective one of the most interoperable blockchains today.

Host Cici:

Q5.What are the requirements for someone to submit a proposal?

Eric Chen | Injective:

You can submit a proposal at the Governance section on Injective Hub: https://hub.injective.network/governance/

Types of proposal include text proposal, spot market launch, instant spot market launch, perpetual market launch, the change on any parameter of Injective, or a community-led initiative such as grants programs.

For every proposal you create it requires you to deposit at least 1 INJ. This is to ensure that you are an active participant of the Injective community and you are eligible to make proposals and govern the protocol moving forward. For the proposal to pass to the voting stage, it must have 500 INJ deposited. You can deposit the 500 INJ yourself or collaborate with the community to deposit them collectively.

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