In the past two years, the narrative of public chains has been dominated by three keywords:
High performance, EVM compatible, general L2.
Everyone is arguing about 'who has higher TPS, who has lower fees, who has a larger ecosystem', but a paradox has always been there—
The truly stable and profitable track is still finance: trading, derivatives, lending, structured products, RWA.
What Injective does is very simple and also very extreme:
I don't want to create a universal chain that can do a bit of everything; I just want to deepen and penetrate the 'finance' aspect, and then directly build a chain-level matching engine at the bottom, turning it into the Nasdaq for all financial dApps.
In this long article, we treat Injective as a company, breaking down a complete 'business model + technology + ecology + gameplay + risk'.
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One, what problem is the project really solving?
In one sentence:
Traditional public chains are 'operating systems for smart contracts', while Injective aims to be 'the trading foundation for financial contracts'.
Today's DeFi has two fatal splits:
1. Liquidity is fragmented.
• A perp protocol has one order book.
• An AMM protocol's pool.
• Each project is working for its own TVL, with extremely low capital efficiency.
2. Experience is passive.
• Risk management, liquidation, and matching are all written into the contract, while the project party repeatedly reinventing the wheel.
• To build a professional derivatives DEX, you must write the matching, risk control, and margin logic from scratch.
Injective's answer is:
• Bringing 'order book + derivatives + settlement' down to the chain level.
• Developers are calling an entire set of 'auction house / futures market / derivatives market' infrastructure.
• dApp no longer needs to build its own matching engine, but hooks into the same 'chain-level NASDAQ'.
This is Injective's most critical positioning difference:
Many chains sell 'high-performance operating systems', but Injective sells a 'high-performance financial exchange kernel'.
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Two, technical foundation: Cosmos + order book + MultiVM, truly optimized for trading.
1. Cosmos SDK + Tendermint: born for 'fast confirmation, fast settlement'.
The reason for choosing Cosmos is actually very straightforward:
• Consensus layer: Tendermint BFT.
• Fast block generation and quick finality are very important for derivatives, liquidation, and forced liquidation.
• High-frequency trading, as no one wants to open 20x leverage on a chain with 'minutes confirmation'.
• Modular: Cosmos SDK.
• Can directly write 'spot market, perpetual market, auction module' as chain-level modules.
• No need to piece together with smart contracts; the chain itself is the 'large contract' for financial applications.
So on Injective, you are not struggling to implement order books on a 'general VM', but:
The exchange = part of the chain itself.
This is a hardcore advantage for applications like derivatives that require extreme latency and certainty.
2. Native order book: CEX experience shared by DeFi.
Most DeFi's standard form is AMM:
You throw assets into the pool, priced by curve.
Injective has been going against the grain from the beginning - only doing on-chain order books:
• Support for complete order placing/eating, limit, market orders, etc.
• LP can place orders by price tiers rather than just blindly stacking in the pool.
• All perp / spot / futures products can share the same order book liquidity.
This has several direct results:
1. Liquidity is more concentrated.
• Different dApps can connect to the same market.
• Market makers only need to provide liquidity in one underlying market to serve multiple frontends / products.
2. The experience feels more like CEX.
• Depth, slippage, latency, as much as possible moving towards centralized experience.
• For traders / market makers with real volume, this is a must-have.
3. Risk management is more unified.
• Margin and liquidation logic can be shared at the chain level.
• The risk parameters of each market can be uniformly adjusted by governance.
Chain-level order book, essentially upgrading the 'exchange' from a dApp to 'infrastructure'.
3. MultiVM: CosmWasm + native EVM, one chain two worlds.
Early Injective mainly relied on CosmWasm extensions, and now adds a heavyweight puzzle: the native EVM environment.
What does this mean?
• For developers:
• You can use Rust / CosmWasm to write deeply integrated chain-level module protocols.
• It can also directly migrate existing Solidity protocols to run in the EVM environment.
• For the ecosystem:
• IBC assets from the Cosmos world, cross-chain combination strategies can be directly stacked.
• The entire toolchain of the EVM world (MetaMask, Hardhat, Foundry, etc.) is available.
The key point is:
Regardless of whether you write applications in Wasm or EVM, the underlying 'financial kernel' below is shared - order book, margin, liquidation, Burn Auction, all are part of the same layer of infrastructure.
This is much more valuable than 'I have another EVM compatible chain'.
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Three, INJ: a PoS asset with 'chain-level repurchase'.
If you treat a public chain as a company, the most important question is only one:
Does this company make money? Does the money earned relate to the shareholders?
The design of INJ actually writes this issue into the protocol layer.
Let's first strip away the complex details and keep three key points:
1. PoS inflation → like 'dividends'.
• By holding and staking INJ, you will receive block rewards and fee sharing.
• This is standard for PoS, equivalent to dividends.
2. Ecological income → periodically 'repurchase shares and destroy'.
• Injective injects a large portion of dApp fee income into a common pool.
• Periodically initiate on-chain auctions:
• Everyone uses INJ to bid for this basket of assets.
• The bidder takes the asset, and all the paid INJ is burned.
• This is the chain-level 'repurchase + destruction'.
• High liquidity + high staking rate → supply-side elasticity becomes smaller.
• Token release has basically been completed and is close to full circulation.
• A large proportion of INJ is staked for the long term, rather than lying on exchanges unprotected.
Simplified into one sentence:
The long-term value of INJ is linked to the trading fees and financial income generated by the entire Injective ecosystem.
If you treat DeFi projects as companies, then this design basically incorporates:
• Revenue (real fees of dApp).
• Profits (the portion of repurchase value after deducting allocations to developers/validators).
• Earnings per share (Burn Auction destroys the corresponding INJ)
All solidified in tokenomics.
This is also one of Injective's most attractive narratives:
It's not 'because we forcibly burn coins, so there is deflation', but 'because the financial ecosystem truly has income to repurchase and destroy'.
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Four, ecological puzzle: a 'complete financial Lego' on one chain.
To evaluate the reliability of a financial chain, look at two things:
1. Does it have flagship applications to support it?
2. Can it connect 'simple gameplay → advanced strategies → institutional capital' into a closed loop?
The current state of Injective is a relatively complete but still expanding 'financial Lego set'.
1. Helix: flagship on-chain exchange.
Helix is probably the first dApp you will encounter on Injective.
Its role is:
• The 'official frontend' of the on-chain order book.
• Undertake the vast majority of spot and perpetual trading.
• Concentrated display of Injective's matching experience and cross-chain asset capability.
On Helix, you can:
• Trading multi-chain assets (BTC, ETH, SOL, ATOM, TIA...).
• Play perpetual contracts.
• Participate in certain 'pre-launch futures' (futures before project launch).
From a narrative perspective, Helix is the 'spot + derivatives frontend' of Injective, while the matching, funding rates, and liquidation engine behind it are where the value is injected.
2. Mito: strategy vault + Launchpad, helping retail investors save trouble while helping projects raise funds.
Mito is a very interesting and clever design; it has two faces:
• For users: strategy vault (vault).
• Common gameplay:
• INJ/stablecoin liquidity strategy.
• Grid / market making / index basket.
• When you deposit assets, you can follow a whole set of preset strategies without having to write robots or adjust parameters yourself.
• For the project team: Launchpad.
• New projects wanting to go live can use Mito for token issuance.
• Users participate in subscriptions with INJ / stablecoins.
• A portion of the funds turns into project tokens, and another portion becomes LP, with depth and liquidity support from the very beginning.
From an ecological perspective, Mito is doing something very critical:
Help novices package strategies into 'buyable products' and help project parties package issuance and liquidity into 'one-time structured issuance'.
Helix is more like 'the exchange frontend', while Mito is 'wealth management / strategy platform'.
3. Neptune / other lending: connect funding markets.
DeFi without lending is incomplete.
The lending protocol on Injective (such as Neptune) takes on the responsibility of:
• Provide 'interest rate curves' for INJ, LST, and stablecoins.
• Provide leverage and funding sources for traders and strategy vaults.
• Provide institutions / large holders with an outlet for 'depositing assets to earn + borrowing out'.
With lending, the previous Helix / Mito can play out more advanced gameplay -
For example, mortgage INJ → borrow stablecoins → participate in strategy vault / Launchpad / hedge positions, to achieve multi-layer yield stacking.
4. LST and LSDFi: turning INJ from 'notes' into 'collateral'.
To maximize the capital efficiency of 'a financial chain', there is one necessary action:
Turn native assets into LST.
Injective has two key roles:
• Hydro: a native LSD protocol.
• Stake INJ → receive hINJ.
• hINJ can circulate on-chain, be used as collateral, act as LP, and enter strategy vaults.
• TruFin / TruINJ: LST leaning towards institutions.
• Managed by professional validators and risk control teams responsible for underlying staking.
• Connecting to capital that values compliance and custody more.
When the vast majority of INJ turns into LST participating in various stacking plays, the effect of the Burn Auction as 'supply-side repurchase' will be further amplified:
• On one side is a high staking rate and a high percentage of LST, with supply locked.
• On one side is ecological income continuously repurchasing and destroying, with circulation shrinking.
This is the combination of LSDFi + Burn narrative.
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Five, how do ordinary users 'play' this chain?
You can crudely break down Injective's gameplay into three layers:
1. The first layer: hold + stake + enjoy Burn.
The simplest layer is to treat it as 'a PoS blue chip with chain-level repurchase':
• Buy INJ → stake to validators or convert to LST through Hydro / TruFin.
• No complex operations, just eat:
• Staking income.
• Long-term supply contraction brought about by chain-level repurchase and destruction.
This layer is suitable for those who are optimistic about this narrative in the long term but are too lazy to tinker with DeFi.
2. The second layer: DeFi combos, enhancing capital efficiency.
At a more advanced level, it is about truly stacking that set of Legos:
A typical 'loop' thinking:
1. Spot INJ → staking → receiving hINJ / TruINJ.
2. Deposit LST into lending protocols to borrow stablecoins.
3. Stablecoins can go to:
• Mito strategy vault.
• Helix does hedging / market making.
• Participate in Launchpad new projects.
4. Adjust leverage and position ratios according to your own risk preference.
The core of this gameplay is not to become rich through arbitrage, but to maximize the capital efficiency of the same INJ:
'Staking income + lending interest spread + strategy income + ecological growth + Burn narrative.'
3. The third layer: Alpha hunters & Builder's track.
The upper layer must either be 'early project players' or 'directly working on the project'.
• For Alpha hunters:
• Keep an eye on Mito / the official Launchpad, tasks, and incentives.
• Pay attention to the launch and airdrop regime of new projects on native EVM.
• Especially focus on targets related to 'derivatives, LSDFi, RWA'.
• For Builder:
• Utilize Injective's PDaaS / order book to introduce your own frontend / brand / custom assets.
• In a MultiVM environment, deploy existing EVM protocols across chains, specifically optimized versions for the Injective financial ecosystem.
• Utilize IBC assets, bring liquidity from the Cosmos world to create cross-chain structured products.
Whether Injective can elevate the ceiling largely depends on whether this layer of builders can create truly differentiated financial toys.
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Six, forward-looking views: the win rate of this 'on-chain NASDAQ' depends on three things.
As I write this, we no longer repeat the introduction but provide a relatively subjective judgment:
In the second half of the bull market, public chains focusing on financial infrastructure will likely only leave two or three with a presence, and Injective is one with a good chance on the current list, but it's not without pitfalls.
What ultimately determines its height may be these three things:
1. Can it really become 'the foundation for other projects'?
• If in the future more perp, structured products, and RWA protocols are to be listed on Injective -
Then it really has the opportunity to become 'the shared matching layer of on-chain finance'.
• If the ecosystem only has a few self-built protocols supporting it for a long time, with liquidity and order depth highly concentrated, it will resemble 'a well-performing DEX backed by a chain', rather than 'a financial infrastructure chain'.
These two paths have completely different valuation spaces.
2. Will the Burn Auction become 'real repurchase' instead of 'paper deflation'?
The endgame of all 'deflationary assets' depends on one question:
Is the burnt portion newly minted and then burned, or is it chips earned from real business income?
Injective writing the path of 'business income → INJ → destruction' into the protocol is a very smart step. But what needs to be validated next is:
• Is the business big enough?
• Whether the protocol and dApp are willing to allocate more fees into the auction pool.
• In the long run, is net inflation steadily pressed to a very low level or even turned into net deflation.
If these three points can continue to be fulfilled, INJ is more like the equity of a 'real cash flow company';
If it can't be done, then Burn is just a good-looking numerical story.
3. Will it be regulated as 'risk', or as 'tool'?
The fate of financial chains is that they will eventually have to engage in dialogue with regulators.
• Engaging in derivatives, contracts, and high leverage is inherently a high-focus area.
• When the scale of on-chain perps, RWA, and structured products grows, whether you like it or not, they will enter the regulatory radar.
Injective's key choice is:
• Either actively embrace compliance and institutionalization, bringing in institutional funds with partners like TruFin, and establish connections with the traditional world.
• Otherwise, you can only continue to chase high yields and high leverage in the 'gray area', to earn short-term stories.
Both paths can make money, but whether they can support a long-term 'chain-level financial infrastructure' valuation is a completely different proposition.
Written at the end: why does this story qualify to 'explode'?
If you could summarize Injective in one sentence, it would be:
This is a public chain that brings the order book and financial engine to the chain level, using real ecological income to repurchase and destroy its own tokens.
It has hit several points that won't go out of date for a long time:
• Finance is the only validated, high-deterministic business model in Web3.
• Order books, derivatives, structured products, RWA, are all 'high stickiness, high reuse' infrastructure.
• Use chain-level mechanisms to achieve 'real income → repurchase and destroy', naturally aligning with 'dividends + repurchase' in traditional finance.
In a bunch of chains saying 'I also have high TPS, I also have memes, I also have airdrops',
Injective at least makes the story very clear:
• I am just a chain for trading and finance.
• My value capture method is that everyone on my chain does finance, and the money earned is shared with INJ shareholders according to the mechanism.
What needs to be watched next is whether it can truly make itself that layer -
Not a specific DEX, but the underlying 'on-chain NASDAQ' for all DEXs and financial protocols.
