2023 L1 track stands out? INJ’s future journey still has uncertainties

2023 L1 Track Steals the Spotlight INJ's Future Journey Remains Uncertain

As 2023 comes to a close, investors may reflect on whether missing out on Injective (INJ) was a huge regret. On November 30th, the renowned cryptocurrency exchange OKX announced the listing of Injective, making it another mainstream centralized exchange (CEX) to support the project, following Binance, HTX, and Bitget. Throughout the year, the price of Injective’s token skyrocketed from an initial $1.25 to a recent high of $26.67, representing an astonishing increase of 2033.6%. Compared to other Layer1 projects, Injective has undoubtedly outperformed.

In the backdrop of a bear market, achieving a gain of over 14 times for Injective is undoubtedly a noteworthy phenomenon. Such performance is not common in the cryptocurrency market, especially among public chain projects. However, whether this growth is sustainable and whether Injective has reached its market value limit remains a hot topic in the market. Investors and analysts have different viewpoints, but nevertheless, Injective has left a deep impression in the cryptocurrency field in 2023.

An Introduction to the Foundation of the Injective Project: Built on Cosmos-SDK, with a total funding of over $50 million

In 2023, despite the struggling overall cryptocurrency market, Injective has stood out significantly. According to data from CoinMarketCap, Injective’s token has surged from $1.25 at the beginning of the year to $19.20 in November, achieving an astonishing growth of 1436%. This outstanding performance has propelled its market capitalization to $1.516 billion, ranking it 41st on the cryptocurrency leaderboard, surpassing well-known projects such as OP, AAVE, and MKR.

INJ Asset Price Trend

Data from Dune Analytics further reveals Injective’s growth momentum. Starting from January 2021, the number of Injective token holders has steadily increased, especially in early 2023, rising from around 12,000 to 24,000, demonstrating its popularity among investors. Among these holders, large investors occupy half, indicating their strong support in the market, while the proportion of retail investors reflects its attractiveness to ordinary investors.

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Injective is built on Cosmos-SDK and adopts the Ignite (formerly Tendermint) consensus mechanism, ensuring instant and secure transactions. Its provided plug-and-play modules, such as the order book and derivatives trading module, enable developers to quickly launch and build financial applications, contributing to the diversification and expansion of the Injective ecosystem.

Investment and technology are the key factors behind Injective’s success in rising against the bearish market. It has received support from major investment institutions such as Binance Labs and LianGuaintera Capital, and completed multiple rounds of funding in 2020 and 2021. The total funding raised by Injective is as high as $52.6 million. Additionally, Injective’s technology layout in 2022, including the deployment of a cross-chain bridge, CosmWasm smart contract layer, binary options module, and the launch of cross-chain accounts, has laid the foundation for its explosive growth in 2023.

Furthermore, Injective has continued to rapidly develop this year, including expanding access to stablecoin assets through integration with Kava, integrating Web3 financial data into Google Cloud BigQuery through a partnership with Google Cloud, and launching a $150 million ecosystem fund to accelerate the adoption of interoperability infrastructure and DeFi. Injective also incentivizes developers to build projects in various fields through activities such as hackathons in partnership with Google Cloud.

Injective’s positioning in the DeFi and derivatives space, combined with its technological innovation and strong investment background, has made it one of the highlights of the crypto market in 2023. Its significant achievements in the bear market demonstrate its strong market adaptability and future growth potential.

INJ Economic Model Analysis: Annual return rate of 16% under POS mechanism, over 5.8 million INJ tokens destroyed

INJ token is the native token of the Injective protocol, with various functions such as governance, staking, and trading. Token holders can participate in important protocol decisions, such as pushing for the listing of new derivatives, setting trading parameters, and upgrading the protocol itself. In terms of nodes, establishing a node not only provides liquidity to Injective but also enables users to earn a share of the trading fees. Custodial nodes can earn up to 40% of fee sharing. Additionally, trading nodes can receive additional rewards by providing improved interfaces or specialized APIs.

For INJ holders, staking with existing validators or setting up their own nodes to become validators allows them to receive network security rewards and participate in Injective’s governance. Furthermore, Injective offers a decentralized derivatives trading platform that allows users to trade freely and create new derivative markets, with early users having the opportunity to earn INJ rewards.

Fee auction is another feature of Injective where token supply is reduced through monthly repurchases – auction mechanism. Token holders can compete to purchase transaction fees using INJ tokens and the INJ obtained from the auction is destroyed. According to statistics, the fee distribution in Injective is 0.1% for market makers and 0.2% for traders. The fee revenue last week was approximately $55,000, with 40% used for developer incentives and the remaining 60% auctioned through repurchases and destruction mechanisms.

 

Injective: Over $70 million worth of INJ tokens have been destroyed so far

Injective has achieved a global DAO with a minimum voting requirement of 500 INJ and each voting period lasting 4 days. In terms of token economics, INJ is a deflationary asset that provides a 16% annual interest rate return through the POS mechanism, and over 5.8 million INJ tokens have been destroyed. Currently, Injective’s total supply is 100 million tokens, with a circulating supply of 83.76 million tokens, a market cap of $1.3 billion, ranking 21st in the Total Value Staked (TVS) globally with a staking ratio of 58%, a reward rate of 21.72%, and an inflation rate of 13.3%.

As of now, 96.33% of the total supply of INJ has been unlocked, while the remaining 3.67% is still locked. The distribution is as follows:

Overall, as the native asset of the Injective protocol, INJ’s design and economic model aim to promote the protocol’s sustainable development and provide value to its users and participants.

Injective’s future market cannot be predicted, but its security has received a high score from Certik

Injective is facing two main categories of competitors in the rapidly evolving decentralized finance (DeFi) market: one being established EVM-based perpetual contract platforms such as GMX, Gains, and Synthetix; the other being emerging custom application chain projects like dYdX, Kujira, and Sei. Although these projects are all fighting for a leading position, Injective is gradually solidifying its market position through its innovative technological solutions and ongoing market expansion.

Injective’s security has been audited by CertiK and received a rating of 73.66, particularly excelling in code security, basic health condition, operational resilience, and governance strength, demonstrating its outstanding performance in these critical areas. However, it has a lower score in terms of market stability, implying that the project needs to continuously prove its robustness in market fluctuations.

Compared to mainstream projects like Ethereum, Solana, and various Layer2 solutions, Injective may not have received equal discussion and exposure, but its steady increase in market value and the appearance of Injective Labs’ founder on Forbes’ “Under 30 Finance 2024” list indicate an enhancement of its reputation and influence within the industry.

Leaders in the crypto market often rise unexpectedly, and with its solid technical foundation and growing market awareness, Injective may be in a phase of preparing for a breakthrough. Therefore, it is wise for investors who do not want to miss the next market opportunity to keep a continuous eye on Injective’s development.

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