The crypto market is in the red today, following the downturn seen throughout last week. Bitcoin is trading under $27,500, and Ether is exchanging hands at around $1,850. Meanwhile, the total crypto market cap has dropped to $1.2 trillion.
Amidst the red market, Arbitrum (ARB) and Zilliqa (ZIL) are seeing some deep negative price action, entering the new week with 12% losses.
Injective Protocol’s native token INJ, however, was the biggest loser, losing nearly 15% of its value over the weekend, according to CoinGecko.
Down over 10% on Monday, INJ has been trading at $6.69 at the time of writing, with a 24-hour volume of $109 mln. The token has actually been down since early last week after hitting nearly $10 on April 17. Since then, it has recorded about a 30% loss in value.
These losses are to be expected after the strong rally INJ had in the first quarter of 2023. The $533 .7mln market cap coin started the year at $1.25 and is still up 415.60% YTD.
Interestingly, just last week, the platform announced a partnership with Tencent Cloud, the cloud business arm of China’s largest firm by market cap. The collaboration is aimed at supporting the growth of Injective’s ecosystem, starting with the Injective Global Virtual Hackathon developers who will benefit from Tencent’s cloud infrastructure. This partnership also highlights the increasing interest in DeFi and the Web 3 ecosystem.
According to Eric Chen, co-founder, and CEO of Injective Labs, the collaboration with Tencent Cloud will provide Injective builders with access to a wide range of resources and support, allowing them to speed up their development.
This will help Injective become a leader in the Web3 sector while promoting innovation. Additionally, the use of Tencent Cloud’s infrastructure is expected to attract more developers to Injective’s hackathon event.
Expanding the Ecosystem
Besides this positive news, in another recent announcement, Injective launched the first-ever Solana rollup for Cosmos with Eclipse. By integrating with the customizable rollup provider Eclipse, the Solana development environment is now extended to the wider Cosmos ecosystem, which is expected to spur growth and drive user adoption within both ecosystems.
The new Solana Sealevel Virtual Machine (SVM) rollup allows Solana smart contracts to be seamlessly deployed within the Cosmos universe, paving the way for Solana applications to interact directly with IBC.
The integration with Eclipse is expected to attract a new audience to the Solana ecosystem and enable Cosmos users to utilize popular Solana dApps, resulting in increased Web3 adoption across the two ecosystems.
According to Injective’s co-founder and CEO Eric Chen, the new SVM rollup for the Cosmos IBC world will not only enable Solana developers to deploy their dApps on Injective, but it will also generate more opportunities for users to access the best Web3 dApps in one comprehensive network.
As development progresses, the new SVM rollup is expected to evolve further, aiming to achieve even greater levels of security and scalability in the future. The current plan is to integrate Cosmos’s upcoming interchain shared security model over time to ensure greater levels of sustainability within Cosmos.
Moreover, the rollup’s data availability layer is expected to migrate onto the Celestia mainnet, further enhancing its scalability properties.
Building the Financial Infrastructure Primitives
Injective is a blockchain platform designed specifically for the finance industry, focusing on providing decentralized infrastructure primitives for DeFi applications. It is an open, interoperable layer-one blockchain that uses a Tendermint-based Proof-of-Stake (PoS) consensus mechanism and a highly interoperable smart contract platform based on CosmWasm.
It was incubated by Binance Labs in 2018 and debuted on Binance Launchpad in 2020. The platform launched its mainnet in November 2021 and raised $40 million in a funding round led by Jump Crypto and BH Digital in August 2022.
The Injective Protocol is made up of several components, including the Injective Chain, which is a DEX protocol built on Cosmos that allows the transferring and trading of Ethereum tokens. Traders can access modules within the Injective Chain DEX such as Auction, Exchange, Insurance, Oracle, and Peggy.
All types of financial markets, including spot, perpetual, futures, and options, are fully on-chain, providing increased user transparency and security.
Injective Protocol distinguishes itself from other popular DEXs by not relying on automated market makers. Instead, it follows the order book model used in traditional finance and aims to match its efficiency with the transparency of decentralized exchanges.
The order book model exchange is based on the popular 0x protocol and is resistant to MEV. It has implemented a Trade Execution Coordinator (TEC) to eliminate trade front running. To foster transparency and accessibility, the Injective team has open-sourced all exchange components, ensuring anyone can build and audit the platform.
Meanwhile, Injective’s decentralized cross-chain bridging infrastructure is compatible with Ethereum, IBC-enabled blockchains, and non-EVM chains such as Solana. Then there is the Injective Hub, which serves as a centralized location for community members to propose and vote on ideas and proposals that can potentially shape the protocol’s future.
INJ token powers Injective’s ecosystem and have several functionalities, including PoS security, governance, relayer incentives, exchange fee value accrual, and collateral backing for derivatives.
With the support of prominent investors like Binance, Pantera Capital, Jump Crypto, and Mark Cuban, the platform has gained over 150,000 community members worldwide and is home to over 100 projects.
A Thriving Ecosystem
With its focus on providing decentralized infrastructure primitives for dApps, Injective aims to power next-generation decentralized finance applications such as decentralized spot and derivatives exchanges, prediction markets, and lending protocols.
Injective boasts an incredibly low average transaction cost of less than $0.01, making it an extremely affordable blockchain network for users. This means that users can transact with Injective without worrying about high fees, which can often be a barrier to entry for many users.
The low transaction cost is made possible by Injective’s fast and efficient consensus mechanism, Tendermint PoS, which provides instant transaction finality and enables over 10,000 transactions per second (TPS). So far, Injective has processed more than 200 million transactions.
Moreover, the protocol continues to gain traction in the Web3 space, with major players such as Binance, KuCoin, CopperHQ, Ceffu Global, and Kraken integrating with the blockchain. These companies recognize the potential of Injective’s open, interoperable layer-one blockchain for DeFi applications.
With these major players integrating with Injective’s mainnet, the ecosystem is expanding, offering more opportunities for community members and developers to participate in governance, validation, burn auctions, and other activities using the INJ token.
And while the INJ token is currently in the red, it was something that analysts and traders were expecting. After all, during the recent price rally, INJ’s relative strength index (RSI) became overbought, reaching a value of 76.66 on daily charts. This typically signals an impending trend reversal in an asset’s prices, making it a bearish cue and a sell signal for traders.
The token had 20-day EMA support located near the $6.7 mark. However, after the continued sell-off over the weekend, the price has fallen just below this crucial support zone for the token.
After the initial drop on Monday, INJ’s price is already seeing some green, up 2.2% in the past hour. Now, it’s to be seen if it will rise further or go back to falling mode.