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Beginner's Guide to Injective (INJ)
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In Brief
Discover everything you need to know about Injective (INJ), the fastest layer 1 blockchain shaping the future of finance.
This guide gives you comprehensive exploration of Injective (INJ). INJ is a protocol that has been making waves in the realm of decentralized finance (DeFi). Throughout the guide, we’ll outline the protocol’s core features that set it apart. We'll uncover the inner workings of Injective and its pivotal role within the DeFi ecosystem.
Before we get started, remember that you can buy, sell, swap, and stake Injective (INJ) for crypto rewards right inside Trust Wallet, via our trusted partners.
What is Injective (INJ)?
Injective is an open, interoperable layer 1 blockchain designed for building DeFi applications. By providing a robust infrastructure and plug-and-play modules, Injective empowers developers and DeFi users to create and participate in a more inclusive, accessible financial ecosystem.
Injective was Co-founded by Eric Chen and Albert Chon. The idea behind Injective was to create a blockchain network that allows anyone to participate in the global financial ecosystem, no matter who or where they are.
Injective’s flexibility and focus on financial applications have led many to regard it as "the blockchain built for finance." Injective’s architecture enables the creation of various financial products, including spot trading, futures, perpetual swaps, and more. All within a decentralized, permissionless environment.
Injective's commitment to decentralization, security, and scalability further enhances its appeal to developers and users seeking to engage in DeFi activities, without relying on centralized intermediaries or facing scalability issues.
Understanding the DeFi Landscape
DeFi has emerged as a groundbreaking force in the realm of finance, revolutionizing traditional systems through blockchain technology. In the DeFi landscape, financial services are built on decentralized networks, enabling peer-to-peer transactions without the need for intermediaries like banks or brokerage firms.
DeFi encompasses a wide array of financial activities, including lending, borrowing, trading, asset management, and more, all conducted through smart contracts on blockchain platforms. This innovative approach offers unparalleled transparency, accessibility, and security, democratizing access to financial services for people around the globe.
How Does Injective Work?
Injective Protocol empowers a new era of decentralized finance (DeFi) by providing the building blocks for powerful and versatile DeFi applications, with a core focus on decentralized exchanges (DEXs). Let's explore how Injective works:
Layer 1 Blockchain
Injective is an independent blockchain (Injective Chain) designed for DeFi. This custom foundation offers advantages like faster transaction speeds and support for complex financial instruments.
Enabling DEX Creation
While not a DEX itself, Injective empowers developers to build DEXs on top of its blockchain. It provides a rich set of tools and functionalities like on-chain order book systems, liquidity management modules, and APIs that streamline DEX development.
On-Chain Order Book System for Efficiency
Unlike some DEXs that rely on Automated Market Makers (AMMs), DEXs built on Injective leverage an on-chain order book system. This system directly matches buy and sell orders between users, similar to centralized exchanges. This system potentially offers greater efficiency and liquidity for advanced financial products.
Cross-Chain Compatibility
Injective boasts strong interoperability with other blockchains. This means users can transfer assets from various chains and trade them on DEXs built on Injective, expanding the liquidity and variety of tradable assets within the Injective ecosystem.
Community Driven Innovation
The INJ token fuels the Injective ecosystem. It allows community members (developers, traders, users) to participate in governance by proposing and voting on upgrades to the Injective protocol, shaping its future development.
Injective acts as the foundation upon which innovative DEXs and other DeFi applications can be built. It provides the infrastructure, tools, and functionalities needed for developers to create efficient and user-friendly DeFi experiences. This focus on familiar order book systems within a secure, decentralized environment positions Injective as a key player in the future of open and accessible finance.
What Projects Can You Build on Injective?
Injective Protocol empowers developers to craft a new generation of decentralized finance (DeFi) applications, with a strong focus on the following areas:
Exchanges.
Lending.
Derivatives.
Options.
Savings.
Insurance.
What is the INJ token?
The INJ token is the native cryptocurrency of the Injective Protocol. Injective operates on its own layer 1 blockchain, Injective Chain, and aims to provide a permissionless, transparent, and efficient trading platform for various financial products like spot trading, futures, and perpetual swaps.
INJ serves several crucial functions within the Injective ecosystem:
Proof of Stake Security
The Injective blockchain relies on the native INJ token for security. The token has various uses. There are 100 million INJ tokens, with more added through block rewards. The target INJ inflation starts at 7% and decreases gradually to 2% over time. There's a deflationary mechanism in place to potentially reduce the total supply below the initial amount.
Governance
INJ also acts as the governance token for Injective, giving holders control over various aspects of the protocol including auction module parameters, exchange module proposals, insurance module parameters, and more. It's used for software upgrades and to manage Cosmos-SDK module parameters.
Exchange dApps Incentives
The exchange protocol implements minimum trading fees, with makers charged 0.1% and takers 0.2%. Exchange dApps that bring trading activity to the platform receive 40% of the trading fees generated from the orders they initiate.
Exchange Fee Value Accrual
60% of the exchange fee undergoes an on-chain buy-back-and-burn event, where the fee basket is auctioned for INJ and then burned, reducing the total supply.
Collateral Backing for Derivatives
INJ can be used as collateral for Injective's derivatives markets, serving as an alternative to stablecoins. In some cases, it can also be staked for interest in insurance pools.
How to Deposit INJ to Your Trust Wallet Address
You can deposit INJ from another INJ wallet or from a centralized exchange. Here’s how:
Select “Receive” from the home screen.
Search for “INJ” and select it.
From here you have two options. You can either:
Copy your deposit address and use that on your exchange account or other INJ wallet to send funds to.
Use the “Deposit from exchange” option to deposit crypto seamlessly from your exchange account.
How to Stake INJ using Trust Wallet
To stake INJ, do the following:
Select the “Earn” button from the main wallet page.
Select “INJ Injective”.
Select “Stake”.
Choose the amount you want to stake and choose the validator you want to use by selecting the Validator dropdown.
Once you choose a validator, then select “Continue”.
Follow the remaining instructions to confirm your stake.
And that’s it, you’ve staked Injective!
Remember that in addition to INJ, Trust Wallet lets you manage and interact with 10M+ crypto assets across 100+ blockchains. Download the latest version, and start using the top crypto wallet today.
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Note: Any cited numbers, figures, or illustrations are reported at the time of writing, and are subject to change.