Injective Protocol- Trading as a Public Utility.

Blockchain technology is rapidly developing beyond the framework of bitcoin. While many people see this technology as a means of payment or investment instead of gold, I believe block chain technology will open up a new world we’ve never seen before.

In the world of block chain technology, thousands of things that can be bought and built are based on that, the entire industry is automated by software, investment funds and the stock market are reversed, entrepreneurship is rising and new networks or startups are able to control themselves based on their virtual currencies. This is the next stage of development of the global internet.

But more importantly, business entrepreneurs now have another way to raise money for their projects. We are witnessing startups launching e-fund certificates based on block chain technology for the purpose of raising capital, bypassing traditional and proprietary financial forms. Not that I matter, but our new world won’t have companies, only protocols.

By using this new model, entrepreneurs start creating digital certificates based on blockchain technology, representing their ownership of the network, and also the fuel for their network operates. As for investors, there will be no shares of that company, only the electronic certificates that the company offers. And as the block chain space expands, the profits will go to real certificate holders, not traditional venture capitalists, who bet money on the company’s stock.

But recently we are seeing the attraction from this market and more specifically the appearance of DeFi. It is clear that it is becoming the leading trend for the Blockchain market.

Decentralized finance focuses on building financial services separate from the traditional financial and political system. This will allow for a more open financial system and the ability to prevent censorship and discrimination worldwide. This is an intriguing idea but there is still room for improvement. Finding out the use cases that best suit the characteristics of the blockchain is crucial to building useful open financial products. If successful, DeFi will take power from centralized organizations and place it in the hands of the open source community and individual users. Whether that will create a more efficient financial system will be determined when DeFi is ready to go mainstream.

And with the Injective Protocol, this will be a typical and promising project in the near future.

Injective chain is based on the Cosmos zone and is a decentralized protocol built on Layer-2, providing a high-speed Ethereum decentralized trading experience. It will use the Cosmos IBC protocol to achieve cross-chain transactions, VDF (Verifiable Delay Function) to simulate real time through Proof of Elapsed Time, and standardize order sequencing to eliminate early tradings. In addition, the Injective chain supports token staking and provides technical support for creating more services such as staking in the future. A derivatives protocol is an important “weapon” of Injective. It is an open protocol that supports the development of open derivatives markets. It is also the world’s first fully decentralized P2P futures and perpetual swap contracts exchange, which supports simple access to various markets. According to the team, compared with other products of the same type, Injective is the fastest, fully decentralized derivatives trading platform without gas fees in the DeFi market.

Based on the Injective chain, Injective’s trading platform has also achieved a fully open source design, which allows it to be a completely decentralized network. It also provides a market-maker friendly API interface, which is close to the current mainstream exchange interface, allowing the user experience to be similar to that of a centralized exchange. Additionally, in the management system, the Injective trading platform has borrowed the design from the auditing systems of centralized exchanges, modularized design, and the audited listing system, but it is based on community management, not just one people. In addition, Injective has introduced liquidity support for DEX from a considerable number of top global market makers, including QCP, CMS, Bitlink, Altonomy, etc. Together with a powerful incentive mechanism, Injective can ensure the liquidity of the trading platform. The future is coming, and the exchange, as the infrastructure of the digital age, is undergoing rapid and unprecedented development. In 2020, we will witness this change.

Internet finance and the digital age

Into the 21st century, human civilizations have made significant progress in digitizations. In just two decades, the internet has gone through three ages: the age of portal (Web 1.0), the age of search/social (Web 2.0), and the age of internet (Web 3.0). The continuous development of the internet has alterned and revolutionized the ways that humans think, behave, and interact.

It started about 300 years ago during the industrial age, people were working endless to increase productivity and efficiency on machines to manufacture from stream engines to automobiles; the key words were mass production, automation with machines, and efficiency optimization for maximized profitability. Now everything has changed, and the passing of time seems to be even faster as we witnessed the iteration of technologies. Humans shift their attentions away from basic productions and machiens back to humans themselves; the internet connects integrates humans, information, and machines/devices.

Now as “data” continues to evolve as it gets produced, stored, organized, and utilized on higher levels, we start to see a new system with new rules slowly penetrating and seizing our world, that more justice, fairness, value accruals and distributions have been demanded by all. Given the above, that is why we are witnessing the “decentralizations” of matters taking place and being facilitated more passionately than ever by the general populace.

Now as things and people get connected and integrated into an “unseen network,” the characterists of blockchain decentralization or however you call it, have become extremely incentivizing for people to act and innovate upon. Specifically, works have been done on all layers of the internet from, again, data productions, storage, to applications (dApps), and of couse along with all the innovations come with innovative business models and even “token economies.”

Among the diverse applications of blockcahin technoloies, DeFi, or decentralized finance has been one of the most hyped recently given the room of imagination and schemes like liquidity mining. Traditionally eventhough we did see the boom of internet finance in the past years ranging from payments, crowdfunding, neo-banks, P2P lending and more, however, non has provided the current anticipation of “evolution” but instead just “iteration,” as they did not really change the rules and systems.

Position of exchanges

Now either in traditional finance or internet finance, “exchange” plays a fundamentally crucial role. The essence of the commodity economy is exchange economy, and in the commodity economy, productions and consumptions are matched through market exchanges. When the a proper equilibrium is achieved for supply and deman, the marginal substitutional rate between any two commodities will be the same for any consumer, and the exchange of values is optimized.

Needless to say, the exchange medium and platform have been of top importance throughout the financial history. The medium has went from shells, stones, and metals to paper and now digital numbers to our eyes. The platform has evolved from the physical markets to the electronic stock trading systems and exchanges and more. Digitalization and “internetization” are the new focuses. In the past decade, since Satoshi Nakamoto invented Bitcoin, the exchange medium and platform have again shifted from centralization to decentralization. After the ICO hypes in 2017, the tokenization of assets has grew popular and now towards better maturity. At the same time, various digital asset trading and exchange platforms also utilize blockchain technology to achieve decentralization, hinting a promising future for internet finance and exchange as a function itself.

The development and current status of traditional exchanges

An exchange is a trading platform with diverse products, which provides price discovery and liquidity for traded products. Technological advancements have facilitated and effected also the business model and infrastructure of the exchanges. Not many people stands in offline market places and shout out the prices of their goods to attract buyers nowadays, but try to get their goods sold through electronic trading systems. In terms of the business model, most exchanges in Europe and the United States have went from membership based to form for-profit companies.

As the hub of the financial activities, the development of exchanges is heavily affected by regulatory policies. However as technology develops, regulations loosen, and business competitions carry on, Alternative Trading System (ATS) has emerged since 1990 in the US (Multilateral Trading Facility (MTF) in Europe), adding flexibility and diversity to the financial world.

The development of exchanges based on blockchain technology

With the application of blockchain technology in asset tokenization and the trading of it, many digital asset exchanges have emerged, such as Binance, Coinbase, Bitmex etc. These well-known exchanges are also classified as centralized exchanges in the blockchain and digital asset industry.

Centralized exchanges, as the name suggests, means that the assets deposited by the users are stored in the hands of the exchange owners, and matching of trades and even prices of products are subject to centralized controls operated on centralized servers. In other words, we, as users, do everything on the platform based on our trust in the team and institution running it.

In comparison, the essence of decentralized exchanges (DEXes) is to allow users’ assets to be under decentralized custody (assets are stored on the blockchain), with every transaction record stored on the blockchain giving transparency and traceability. Simply put, this whole decentralization is meant to prevent malicious human behaviors and to facilitate users to trust in codes and technology instead of other human beings. Let’s probe further in details:

On Centralized Exchange

When using a centralized trading platform for the first time, you need to complete the registration required by the centralized exchange and KYC (real name authentication and etc.). Upon different levels of tasks completion, you will have the permission to deposit, withdraw, trade, and more.

Deposit: deposit a certain amount of assets from other exchanges or your own wallet to the newly registered centralized exchange. It should be noted that the address to receive the deposit is assigned to you by the centralized exchange, and thus you do not have the private key to this address.

Withdraw: to withdraw assets away from the exchange, you are subject to centralized risk control conducted by the exchange persons as you do not have control of the address. It is usually the case that you will need to complete the highest level of KYC (e.g. video chat, picture with yourself holding your ID and written waiver of rights). Further the release of your assets is completely subjected to the permission and execution of the exchange staff.

Trading: this is where it gets interesting as well, when you make a trade, all transaction related data and record are stored on the exchange’s server, on some of the exchanges, the settlement of a transaction does not even take place (you only see the transaction completed on the front-end), and for most you do not have access to their back-end and therefore if there is any dispute on a transaction/order, you probably would not have any edge arguing with a centralized exchang.

On Decentralized Exchange

With the advancement of blockchain technology and the emergence of more public blockchains, there are now a variety of decentralized exchanges. DEXes are different because of the diverse public blockchains they are based on and their respective concepts and technologies. Here we only discuss the decentralized exchanges pertaining the general traits.

One of the key aspects of decentralized exchanges is that the exchange accounts equate to smart contract accounts. In brief, storing assets on DEX is to store them in smart contracts which is to store them in codes, and in codes you trust.

Generally most DEXes will only ask for registration (some even require KYC, and it has been criticized for a platform to call itself a DEX whilst asking for KYC), and to deposit, withdraw, and trade:

Deposit: you deposit by transferring your assets into the smart contract address assigned to you by the platform.

Withdraw: directly withdraw to anywhere directly from the smart contract address.

Tradin: your asset is transferred from the smart contract address directly to that of your counterparty. This transfer can be checked on the blockchain through blockchain browser, and the entire transfer process relies on smart contract’s automatic execution by codes.

DEXes can be further divided into two focuses: spot and derivative markets. Most of the DEXes in existence focuses on the spot markets, and are not many derivatives DEXes given the complexity of financial designs development workloads. However it has become palpably clear that derivatives markets have grown exponentially in digital asset domain, and we are already seeing the next boom coming from derivatives trading. Few strong contenders that have emerged in 2020 include Injective Protocol, DerivaDEX and Serum. Here let’s explore Injective Protocol, which will be launched in August.

To resolve common issues faced by DEXes such as user friendliness, speed, and more, Injective Protocol proposes a global solution: Injective chain, Injective derivatives protocol, and Injective DEX.

It can be said that some of the most important DeFi applications are decentralized exchanges (DEXes). These platforms allow users to trade digital assets without the need for a trusted middleman (exchange) to hold their money. Transactions are conducted directly between user wallets with the help of smart contracts.

But what we are seeing is a future product that is really very effective, from having many reliable partners to support the latest product updates to deliver. For everyone to understand the value that the project brings.

More impressively, they have recently raised $ 2.6 million in seed funding and the specific content will be quoted as follows:

  • Led by Pantera Capital, the round also saw Asia-based QCP Soteria, Axia8 Ventures and Boxone Ventures, Bitlink Capital and others participate, Injective announced Wednesday.
  • Injective Protocol sets out to resolve scalability issues and bottlenecks that can mar the user experience on decentralized exchanges (DEXs).
  • The project was one of eight inducted into the Binance Labs Incubation Program in 2018, with the mission to resolve some of the shortcomings DEXs face, such as high latency and poor liquidity.
  • Aside from the seed investment, the group of investors will also provide liquidity solutions for Injective and support its business developments and global brand recognition, according to the press release.
  • Pantera Capital partner Paul Veradittakit said the investment firm led the round because of its belief that Injective is a “strong contender” for expanding decentralized finance (DeFi) beyond Ethereum’s platform.
  • The funding comes as the protocol prepares for a mainnet launch and a new token to be issued in the latter half of 2020.

And I would like to end the content of the article here, the above are completely new content related to this project. Let’s wait for the product to be released, I look forward to this product because of what it is building. All relevant and up-to-date information will be available at the project’s social channels.

Official Website:

Whitepaper Link:


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