Injective Protocol ($INJ ) is a decentralized exchange (DEX) platform that enables cross-chain margin trading, derivatives, as well as futures contracts on various markets, including Forex.
Designed on the Cosmos ecosystem as a layer 2 application, Injective integrates interoperable bridges that provide traders with seamless access to cryptocurrencies from networks like Ethereum or Polkadot.
Unlike other widely used DEXs like Uniswap or Bancor, Injective does not employ an AMM (automated market maker) mechanism for liquidity. The protocol adopts a classic order book model, similar to that of crypto exchanges or traditional exchanges, in order to combine the efficiency of traditional finance with the transparency of Web3.
On @Injective , users do not pay gas fees for each transaction: only market maker/taker fees apply, settled in INJ. The INJ token also serves the roles of governance token and staking asset for Injective's Proof-of-Stake blockchain.
Who created Injective?
Injective is the result of the work of Eric Chen and Albert Chin.
Eric Chen, a finance graduate from NYU Stern, later joined Innovating Capital, one of the early supporters of Injective.
Albert Chin, for his part, worked as a software engineer at Amazon after obtaining a master's degree in computer science from Stanford.
The project has attracted several major investors, including Pantera Capital and Mark Cuban, raising several tens of millions of dollars.
How does Injective work?
Injective Protocol consists of different elements that together enable the complete functioning of its DEX ecosystem.
Injective Chain
Injective Chain is a decentralized exchange protocol built on Cosmos, while ensuring compatibility with Ethereum tokens. It aims to overcome the scalability limits of layer 1 blockchains, while allowing developers to use the Ethereum tools they already master.
The chain consists of several modules:
The auctions, which allow token holders to bid on baskets of tokens collected through trading fees. The winning INJ are then burned.
The exchange platform, where traders create and trade spot and derivative markets, with an order book, execution, and settlement fully on-chain.
The insurance, intended to support underwriters of derivative markets.
The oracles, which retrieve external price data (notably from traditional markets) to feed the platform.
Peggy, the module that connects Injective to Ethereum to convert ERC-20 tokens into native Cosmos assets.
Injective Exchange
Injective Exchange is a trading platform using an order book, built on the 0x protocol.
All components — interface, smart contracts, order book management — are open source, ensuring total transparency.
To prevent front-running, a Transaction Execution Coordinator (TEC) is set up. This system introduces a slight delay to prevent a recent order from being executed before an older order, thus limiting the unfair advantage of certain bots or market makers.
Injective Hub
Injective Hub is the central dashboard of the protocol, where users can:
stake their INJ tokens and become validators,
delegate their INJ to validators to earn a portion of the rewards,
participate in governance by proposing or voting on updates.
Decisions may concern new trading pairs, platform features, or governance processes.
Why does INJ have value?
The INJ token supports several essential functions:
Proof-of-Stake security: stake INJ to secure the network and receive rewards.
Governance: participate in votes and decisions that shape the future of Injective.
Incentives for relayers: up to 40% of trading fees may be returned to order relayers.
Burn exchange fees: the remaining 60% of the fees are burned, reducing the supply of INJ.
Used as collateral: INJ can serve as margin for derivative markets.
Why use INJ?
Injective particularly interests:
traders looking for a decentralized platform without gas fees and efficient due to a high-performance order book,
investors wishing to generate a return through staking and delegation,
developers wanting to build fast, interoperable blockchain applications compatible with Ethereum tools.
