TokenDocs

Injective ($INJ)

Date of Research: Jan 2024

Injective is an L1 built with Cosmos SDK, designed to provide modules for dApps to build on top. The inflationary INJ token supports governance and gas functions. The team appears accomplished and capable, with significant backing from prominent investors. Collaborations with various projects across blockchain ecosystems (like Celestia) are fueling additional hype around the chain, potentially beyond what might naturally occur.

There is some concern about the lack of clarity around the auto-executing smart contracts mentioned on the website’s front page, although this information might be found in the whitepaper. The roadmap does not extend beyond 2022, and the final token unlock occurred in Jan 2024. Much of the recent value increase seems linked to second-hand hype from upcoming airdrops by L2s. After these airdrops, it’s uncertain whether the ecosystem will sustain its popularity, as interest may not primarily focus on this L1.

Technologically, Injective offers a new and intriguing approach, though it faces competition from other modular blockchains and various MEV-resistant solutions, which are currently popular. The platform and team seem trustworthy, and the technology alone might justify support. However, the project’s long-term viability as an investment remains unclear. Engaging with the dApps built on Injective may lead to some valuable airdrops, though the lasting value of these rewards is still undetermined.

Fundamental Analysis

Website

https://injective.com/

Creation date: 2002-11-24; was just a default WordPress until 2022

Whitepaper

Found via Messari: https://crebaco.com/planner/admin/uploads/whitepapers/7492999injective-protocol.pdf

Their docs: https://docs.injective.network/

Team

Founding Team Members: Eric Chen (CEO) and Albert Chon (CTO; not active on Twitter)

What other projects have they been involved in, if any?

  • Eric: researcher at Innovating Capital (according to IQ wiki)
  • Albert (LinkedIn): Worked at Amazon as SDE, OpenZeppelin consultant

Funding

Project was announced by Binance Labs in 2018; 2020 seed round led by Pantera Capital, released via Binance Launchpad; 2021 Q4 Mainnet release.

Funded by:

Goals & Purpose

What is the goal of the project?

“…to create a truly free and inclusive financial system through decentralization.” – About

What problem is the project trying to solve?

They are concerned about the lack of “full decentralization” and the possibility of front-running transactions on both PoW and PoS chains.

How do they plan to solve the problem?

“With the fastest blockchain built for finance, and plug-and-play Web3 modules, Injective’s ecosystem is reshaping a broken financial system with dApps that are highly interoperable, scalable and truly decentralized.” – About

  • Specifically, according to WP, by using “verifiable delay functions as a proof-of-elapsed-time and fixed-delay time-lock puzzle to resolve same-block order conflicts.” Namely, by being protocol agnostic.
  • There are two components: a settlement logic layer and a trustless relayer network protocol which allowed sharing liquidity between the dApps and integrates with 0x.

Feasibility

Is this a new idea or has it been done before?

Celestia has the same idea, as does Dymension, Cosmos, and a number of others. Injective was the first Cosmos ecosystem to natively support Ethereum assets. As of 2022, it was also the only blockchain to enable automatic smart contract execution using AI, but that lends more to the hype narrative than actual functionality.

Have they actually created the infrastructure/code/whatever is necessary for this idea, or is it still just an idea?

Yes, the blockchain is active.

Do you think other people would buy in?

Yeah, it seems like projects like Chainlink, Avalanche, Wormhole, Polkadot, etc are all taking part. And it has just lately reached its ATH in 2024, so its popularity is growing.

Why or why not?

  • Positive:
    • The current hype may be due to the Volan upgrade which adds a software module focused on real-world assets and better interactions across Cosmos chains (IBC).
    • Real World Assets (RWAs) include: tokenized fiat currency pairs, treasury bills, and exclusive credit products.
    • Probably, the IBC interaction is boosting the hype because of Celestia getting so much hype right now too, and this makes it easier to bridge between the two.
    • More speculators are coming into crypto again as we end the bear market, and this chain allows for complex DEX activities such as prediction, futures, options, etc, natively on-chain.
    • High staking yield (15.96%), though this can’t be maintained long term.
  • Negative:
    • Drop in core devs in early 2024 from 22 to 14. Unclear why.
    • Airdrops are huge right now, and many projects on top of Injective have confirmed airdrops. Once they are released, there may not be much incentive for users to remain.

Audit & Security

Informal Systems in 2021. Full report. It seems the code is not open source, but in a private GitHub repository.

  • Some client interface issues that were all resolved, nothing severe.
  • Errors in blocks would halt the consensus engine. Severe issue – resolved.
  • Two further severe issues regarding the loss of tokens, both resolved.

Automated audit by Cyberscope (date not given). Score 96%

Certik Skynet audit (in 2020 maybe?). Score 84.13/100

Sentimental Analysis

Social media: X, Telegram, Discord

Social media creation date: Nov 2018

Is it active? Y

Are people talking about the project off its own pages? Y

Is what they’re saying good or bad? Good.

Are the people engaging with it paid to (promotors, influencers, sponsors etc)? At least some, yes. Lots of giveaways and hype on Twitter.

  • If yes, who is it and what is their audience like?
    • @GymGod_ – small audience. Account is only 43 followers, created Nov 2022. Mostly just shares promos and scam, but the INJ stuff they post shows up in “Top” search.
    • @Ji1n11 – 1150 followers, created Jan 2022. Basically all giveaways.
    • @0xRadhruin – 1376 followers, created May 2021. Basically all giveaways and hype.
    • @Wise2thaG – 2091 followers, created Sept 2021. Basically all NFT hype.
    • @dan_ethx – 612 followers, created May 2023. Mostly giveaways.

Where does this coin/token deserve to be on the list of top coins/tokens, if at all? In early 2024 it was #30 by market cap but by Q4 2024 it slid to the 50s. It seems more people are selling than buying, so not sure it will go up from here unless the protocol makes some major changes. Even the influx of L2s and adoption hasn’t pushed it up.

What’s happened on Google trends about the coin/token/project? It really picked up popularity around August 2023, spiked in mid-Dec 2023 and has been steadily declining since.

[image of Google Trends, with link]

Technical Analysis

Data: CoinGecko

Native network: Its own – L1, built with Cosmos SDK

Token usage (to pay fees or just an asset): Fees and governance

Consensus mechanism: Tendermint-based PoS

Can it be purchased in Centralized Exchanges?: Yes, many.

Active addresses:

ERC contract address (such as for Metamask): 0xe28b3b32b6c345a34ff64674606124dd5aceca30

Tokenomics

Is this coin/token on its own blockchain or a different blockchain? Its own, native utility token.

Is the coin/token inflationary or deflationary? Inflationary as more are created with block rewards (7% at launch, decrease to 2% “over time”) but there is a deflationary mechanism due to the Burn Auction.

When was the initial token distribution? 2020

What was the form of the presale? ICO

Was there/will there be a lockup period? If yes, for how long? There was. Initial release to Binance Launchpad Sale, Ecosystem Development and Community Growth in 2020. Last unlock was Jan 21, 2024, to team and advisors.

Initial Coin Offering (ICO): Oct 2020, raised $43.6M – ICODrops

Who received it?

What was the initial price of the coin/token? 1 INJ = 0.4 USD

What was the initial liquidity of the coin/token? 100,000,000

Is there a limit to how many coins/tokens will be produced? No.

Mainnet Explorer: https://explorer.injective.network/

  • Important to note that as of early 2024, whales held 90% of the tokens. As of Q4 2024, their explorer no longer shows addresses.

Conclusion

Questions/Concerns:

  • What are auto-executing smart contracts? (on their front page)
    • This isn’t really explained anywhere, even in their docs. CoinDesk suggests it has something to do with AI but doesn’t explain it.
  • No updates on their About page beyond Q4 2022 – what did they do in 2023? No future roadmap? Found an updated roadmap on Binance.com, up to Q1 2024 (section 6.1). It seems to be going according to plan.
    • “On Jan. 25, 2023, the project team announced the Injective Ecosystem Group, a $150 million initiative to fund development within the Injective ecosystem.” – Messari
    • Jun 6, 2023 – launched INJ incentives with the Open Liquidity Program (OLP)
    • Aug 16, 2023 – INJ 2.0 went live, and all dApps built on Injective could contribute tokens to the weekly Burn Auction pool.
      • Finding out what this is has been challenging. The only description in their glossary is: “A weekly event in which community members can use INJ to bid for 60% of all exchange fees collected by Injective. The INJ used by the winning bidder will be burnt.” The description on its own page explains that the trading fees paid by users are collected by Injective – 60% are auctioned off and 40% are sent to Exchange apps for liquidity. The highest bidder gets the 60% and the bid amount they paid is burned.

Pros:

  • Interoperability – Ethereum, Cosmos, Solana
  • On-chain derivatives and other advanced trading
  • Modular – “plug-and-play modules” for devs to build dApps.
  • Injective Labs is helping validate various chains, including Celestia