The INJ token, the native token of Injective Protocol, is more than just a cryptocurrency, it is a powerful tool designed to improve the efficiency and security of decentralized finance (DeFi) applications. This article will delve into the main uses of the INJ token and its unique advantages within the Injective ecosystem.
Main uses of INJ tokens
Proof-of-Stake Security: INJ token holders can earn rewards for securing the Injective protocol by staking their tokens. This mechanism not only enhances the security of the network, but also provides holders with an additional source of income.
Governance: INJ token holders have the right to vote on changes to the Injective Protocol, thereby affecting the future direction of the platform. This decentralized governance model ensures the transparency and fairness of the platform.
Relayer incentives
Relayers who originate orders can earn up to 40% in trading fees (paid in INJ) from the orders they originate. This incentive mechanism encourages more relayers to participate, thereby increasing the activity of the entire ecosystem.
Exchange fee value accrual: The remaining 60% of exchange fees are burned, thereby reducing the supply of INJ. This mechanism helps maintain the scarcity of the token, thus increasing its value.
Collateral support for derivatives: INJ can be used as margin and collateral in the derivatives market, which further enhances its application value in financial markets.
burn auction
The burn auction on Injective is particularly unique as 60% of all fees collected from dApps are auctioned weekly via a buyback and burn mechanism. This, in turn, has caused the supply of INJ to decrease dramatically over time. Currently, Injective has the highest token burn rate in the industry.
Advantages of Injective (INJ): A blockchain designed for DeFi applications
Injective is the only blockchain specifically targeted at DeFi applications. It is a blockchain built for finance and the first industry-specific blockchain.
Decentralized order book infrastructure: Injective has a native decentralized order book infrastructure that can support all financial primitives (spots, perpetual contracts, options, expiry futures, etc.). This gives Injective unparalleled flexibility and efficiency when processing financial transactions.
Highly interoperable
Injective is built using the Cosmos SDK, but through integration with Wormhole, it is compatible with multiple major layers, including Ethereum, Moonbeam, Solana, Polygon, Avalanche, and more, making it highly interoperable.
Smart Contract Enablement: Injective enables smart contracts through CosmWasm, whose unique implementation allows smart contracts to be executed automatically on every block. This greatly improves the efficiency and reliability of smart contracts.
Resistance to MEV: Injective is completely resistant to MEV (Miner Extractable Value) due to its frequent batch auction model for transaction processing. This mechanism ensures fairness and transparency in transactions.
Support for Ethereum native tools: Injective support for Ethereum native tools. For example, anyone can use MetaMask to access Injective without having to switch networks, allowing users to avoid any switching costs.
Extremely fast block times: Injective’s block times are 1.1 seconds, making it one of the fastest blockchains in the world. This feature gives Injective a significant advantage when dealing with high-frequency trading.
High speed and low cost: Injective’s speed is more than 1,000 times faster than Ethereum, and the cost is also more than 1,000 times lower. This makes Injective extremely efficient and cost-effective when processing large volumes of transactions.
in conclusion
As a core component of Injective Protocol, the INJ token has multiple uses and significant advantages. From proof-of-stake security to decentralized governance, from relayer incentives to exchange fee value accrual, the INJ token plays a vital role in the Injective ecosystem. Its unique burning auction mechanism and high degree of interoperability make Injective an ideal choice for DeFi applications. As time goes by, the value of INJ tokens will continue to increase, bringing more benefits and opportunities to holders.