What is Injective (INJ)? A 2024 Guide

What is Injective (INJ)?

Injective is a layer-one blockchain specifically designed for finance. Within the Injective ecosystem, individuals have the freedom to develop innovative DeFi and Web3 applications by leveraging its distinct plug-and-play financial infrastructure components. These components include a high performance on-chain decentralized exchange (DEX) infrastructure, oracles, decentralized bridges, and a composable smart contract layer with CosmWasm.

Constructed using the Cosmos SDK, Injective places a significant focus on interoperability, facilitating effortless interaction with other IBC chains. Additionally, through the use of Wormhole, it broadens its interoperability reach to include networks outside of the Cosmos ecosystem, such as Ethereum, Solana, Klaytn, and others.  

INJ stands as the native utility token of Injective, fulfilling multiple functions within its ecosystem. These roles encompass governance, token burn auctions, and staking on the Proof-of-Stake (PoS) network.

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Who founded Injective (INJ)?

Injective Protocol was established by Eric Chen and Albert Chin in 2018.  

Chen graduated with a Finance degree from New York University's Stern School and later served as a Venture Partner at Innovating Capital, an initial investor in Injective Protocol.

Chin, who holds a master's degree in computer science from Stanford University, previously worked as a Software Development Engineer at Amazon.

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What is Injective (INJ)’s objective?

Injective (INJ) is the native token of the Injective Protocol, a platform that aims to change how finance works using blockchain technology. The main goals of INJ are to let people have a say in how the platform is run (governance), help keep the platform safe by encouraging users to lock up their tokens (security), reward those who help the platform work smoothly (incentivization), and make sure there are enough features for users (utility). Essentially, INJ makes it possible for users to participate in decisions, earn rewards, pay for services on the platform, and ensure the platform runs efficiently and securely.  

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How are Injective (INJ) staking rewards distributed?  

The distribution of staking rewards in the Injective network is influenced by various factors, including the following:

1. Staking Amount: Participants who stake a larger amount of INJ tokens typically receive a higher proportion of the staking rewards.

2. Staking Duration: Some staking networks may offer higher rewards for participants who lock their tokens for longer periods, incentivizing long-term commitment to the network.

3. Network Participation: Staking rewards may also depend on the overall level of participation in the staking network. Higher participation rates could lead to lower rewards due to increased token supply and dilution.

4. Validator Performance: Validators play a crucial role in securing the network and validating transactions. Validators that maintain high uptime and performance may receive additional rewards as an incentive for their contribution to the network's security and reliability.

5. Network Fees: In some cases, staking rewards may also include a portion of the transaction fees generated on the network. This provides an additional source of income for those who stake beyond the inflationary rewards.

6. Token Inflation: Staking rewards are often generated through token inflation, where new tokens are created and distributed to stakers as a reward for securing the network. However, high levels of inflation could potentially lead to a decrease in the value of the token over time if not balanced properly.  

Participants should carefully consider these factors when deciding to stake their INJ tokens.

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Is Injective (INJ) Proof-of-Work or Proof-of-Stake?

Injective (INJ) operates on a Proof-of-Stake (PoS) mechanism. This allows for more energy-efficient and cost-effective transactions compared to the traditional Proof-of-Work (PoW) model. Through staking, INJ holders can participate in network governance and secure the network, while earning staking rewards.

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How does Injective (INJ) get burned?

Injective stands out with its unique token burn mechanism. This pioneering approach allocates 60% of the fees collected from all dApps to fund a weekly on-chain buy-back-and-burn auction. With the rollout of INJ 2.0, this system has been enhanced to include all dApps in these weekly auctions, thus broadening the scope for rewards and enabling the burning of larger quantities of INJ tokens.

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Is Injective (INJ) inflationary or deflationary?

The initial INJ inflation target is set at 7% during genesis, which will gradually decrease to 2% over time. As a result of the deflationary mechanism, the total supply of INJ may ultimately be less than the initial supply.

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When you own Injective (INJ) what exactly do you own?

When you own Injective (INJ) tokens, you essentially own a portion of the Injective Protocol ecosystem. INJ tokens serve various functions within the Injective ecosystem:

• Governance: INJ holders have the right to participate in protocol governance, allowing them to vote on proposals, changes, and upgrades to the platform.
• Staking: INJ tokens can be staked to secure the network and earn rewards. Staking INJ helps maintain the security and integrity of the Injective Protocol.
• Fee Payment: INJ tokens can be used to pay for transaction fees, trading fees, and other costs associated with using the Injective platform.
• Rewards and Incentives: INJ holders may receive rewards and incentives for participating in various activities within the ecosystem, such as providing liquidity, participating in governance, or contributing to the development of the platform.

Overall, owning INJ tokens gives you a stake in the governance, security, and operation of the Injective Protocol, as well as potential opportunities for earning rewards and incentives within the ecosystem.

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What is on the Injective (INJ) roadmap?

Injective's future is closely connected to its roadmap, which shows how it wants to grow and improve. By always coming up with new ideas and features, Injective aims to stay at the top in the world of DeFi. Key milestones in Injective’s roadmap include the integration of more cross-chain assets including an NFT standard and NFT marketplace, the addition of new derivative products, and the development of advanced trading tools and features.

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What risks does Injective (INJ) have?

Like other crypto assets, there are some general risks associated with investing in INJ.  

We describe many of these general risks in INJ's Crypto Asset Statement, including risks relating to: volatility; access, loss or theft; control of processing power; settlement of transactions on crypto asset networks; momentum pricing; private keys; internet disruptions; faulty code; network development and support; regulatory risk; network forks; air drops; voting rights; cybersecurity incidents and other systems and technology problems; unforeseeable risks.

While we tried to describe the key risks associated with INJ here and in our risk statement, these aren’t all the risks associated with trading in INJ. You should also always do your own research on INJ to make sure you are comfortable investing in it.

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How to buy Injective (INJ) in Canada

Get live INJ price data and learn how to buy INJ in Canada through Coinsquare's Comprehensive Guide.