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- 1 Injective Protocol helps developers create DeFi applications like exchanges and prediction markets.
- 2 It facilitates cross chain transactions across Ethereum, Moonbeam, Solana, Avalanche, and more.
Injective protocol is a decentralized exchange that facilitates cross-chain trading, derivatives and also future trading. It is built on the Cosmos blockchain as a Layer 2 application. It uses cross-chain bridges which permits traders to trade cryptocurrencies from different platforms.
This project focuses on decentralization. Eric Chen and Albert Chon founded it in 2018. The system with layer 2 solution backup permits the investors to access DeFi markets securely and fast. The first fully decentralized exchange system by injective protocol in DeFi was launched in April 2020.
Injective Protocol’s Aim
Its aim is to overcome the restrictions of the decentralized exchange which limits the users by depending on book trading, insufficient liquidity, excessive latency etc. Injective protocol is focused on the derivative market. It provides decentralized futures, spot trading, and swaps.
It does not use an automated market maker (AMM) formula to manage the funds, which is basically a type of decentralized exchange that uses algorithmic money robots. This enhances the ease with which individual traders can buy and sell crypto assets.
Instead, it follows the basic model that centralized crypto exchanges use to trade directly with other people as with a traditional order book. So it has the efficiency of traditional finance and +transparency of decentralized exchanges.
No gas fees are charged for the transactions. Thus, it opens more chances for trading on markets. Market maker and taker fees were paid using INJ coins. The coins serve as a governance token and staking mechanism to power Injective Proof of Stake based blockchain.
The cross-chain ability permits the user to trade on different protocols such as Ethereum, Polkadot etc. It offers auto-executing smart contracts which gives faster and innovative applications. Developers can build dApps with plug and play modules and deep liquidity support from day one.
Injective Protocol: Made of Several Components
It is a DEX protocol built on Cosmos that facilitates the transferring and trading of Ethereum tokens. The Injective Chain aims to address the scaling and throughput limitations many Layer 1 blockchains experience.
It permits developers to use the Ethereum development kits they are familiar with. It offers auction, exchange, insurance and oracle. It facilitates the token holders to bid on tokens that have been gathered from exchange trading fees. The highest bidder paid INJ tokens are then burned. It also helps traders to create and trade derivatives markets. The real world data is obtained to set the asset price on the INJ exchange.
The Injective Exchange implements Trade Execution Coordinator (TEC) which removes trade fronts. Delay is created by TEC so that new orders cannot be placed before the older orders. In this way it tries to solve the advanced information that is gained by some market makers.
Injective Hub is a dashboard that gives users the outline about the functionality of Injective Protocol. Users can use Injective hubs to stake their INJ tokens. This way they become validators tasked with upholding the security of Proof of Stake blockchain.
INJ tokens can choose to assign their tokens to network validators and earn rewards in the form of percentage. The community members use it as a place to propose and vote on proposals made that will help to build the future of Injective. The proposals made here were about functionality and governance procedures etc. Injective solves the third party problem involved in trade by generating the right order by which orders can be generated securely with no collision barriers.
The technology also permits the user to select the order without knowing the details of the orders belonging to other traders. This will avoid front running and confirms that a large number of orders can be fulfilled without difficulty.
Injective Price Prediction
At time of writing it was trading at $6.99. The market cap of Injective protocol is down by 1.99 % and it stands at $558 Million, with its 24-hour volume at $48 Million. It has a circulating supply of 80,005,555.33 INJ.
As per price prediction of coincodex the value of Injective is predicted to rise by 17.12% and reach $8.28 by June 29,2023. The general Injective price prediction sentiment is neutral with 19 technical analysis indicators signaling bullish signals and 7 signaling bearish signals.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
