Who: Injective is a decentralized exchange (DEX) protocol. However, Injective is slightly different from a typical DEX. Because in the field of decentralized finance (DeFi), there is generally no support for derivative products such as futures. Injective is a DEX that stands out for its focus on derivatives. Its founders are Eric Chen and Albert Chon.
Eric Chen: Has extensive knowledge of blockchain protocols and traditional finance. He is the co-founder of Injective Labs.
Albert Chon: A graduate of Stanford University and was a software development engineer at Amazon. He is the CTO of Injective Labs.
What: Injective offers a high-speed, low-latency and low-cost platform for derivatives and spot trading. Derivatives are financial contracts that allow you to speculate on the future price of crypto assets. Spot trading is the instant buying and selling of crypto assets. Injective aims to bring the traditional stock exchange experience (fast and professional) to a decentralized environment.
Where: The Injective protocol functions by combining two different blockchains:
Ethereum (ETH): Injective uses the Ethereum blockchain for on-chain asset representation and exchange for ERC-20 tokens.
Cosmos (ATOM): Injective uses its own chain (Injective Chain), an independent Tendermint-based blockchain specifically designed for high-speed matching engine and decentralized trading. Thanks to Cosmos' Inter-Blockchain Communication (IBC) protocol, Injective Chain can seamlessly connect with Ethereum and other Cosmos blockchains.
When: The launch of the Injective mainnet took place in November 2021. The project has been developed for more than 2 years.
Why: Injective aims to overcome some of the drawbacks of traditional decentralized exchanges (CEX) and decentralized finance (DeFi) protocols:
Advantages over Traditional Exchanges (CEX):
Censorship Resistant: Injective is decentralized, meaning it is not controlled by a single entity. Therefore, it is more resistant to censorship or manipulation.
Higher Speed and Lower Latency: Injective offers transaction speeds and latency that rival CEXs without disrupting its decentralized structure. Injective offers a latency of 2 milliseconds for derivatives and 1 millisecond for spot trading.
Low Transaction Fees: Injective allows you to avoid the high transaction fees seen on CEXs.
Advantages over DeFi Protocols:
Derivatives Support: Injective offers trading for derivative products that are not currently widely available in the DeFi space.
Higher Security: Injective uses the Tendermint consensus mechanism, which has a proven track record for security.
How: Injective works by working together with the two blockchains mentioned above:
Exchange of ERC-20 Tokens: You must deposit the ERC-20 tokens you want to exchange into the Ethereum network. Injective uses ERC-20 delegate tokens (wrapper) that represent your assets on the Ethereum blockchain.
Trading: Your deposited assets are moved to the Injective Chain, where you trade with high speed and low latency with the matching engine.
Additional Information:
Injective's native token is INJ. INJ can be used to secure the network through staking (locking), participate in protocol governance, and pay transaction fees.
Injective is currently listed on leading cryptocurrency exchanges such as Binance, Coinbase and Huobi Global.