Why Injective Is Doubling Down on Web3’s Financial Ecosystem

Injective's Eric Chen explains the progress on building out Web3's financial plumbing

By: Zack Guzman

June 24, 2024

As more Web3 projects lean toward abstracting away more crypto-native components, Injective is doubling down on providing the cross-chain trading infrastructure it always set out to pioneer. 

Injective Labs co-founder Eric Chen joined Coinage to explain the progress Injective has made in that effort after recently voting to cut its token’s inflation rate by more than half.

“Injective’s mission at the end of the day [is to] create a free and inclusive financial ecosystem through decentralization,” he said. “It's really about building rails, all the plumbing and… yielding to what the user wants and then making it happen for the users.”

Injective has found its stride as a sector-specific layer-1 blockchain built on the Cosmos SDK designed to empower the next generation of DeFi applications. At its heart, Injective aims to foster open, interoperable financial ecosystems that facilitate decentralized spot and derivatives exchanges, prediction markets, lending protocols, and more. Injective has continued to add to its arsenal of applications, recently integrating Bitoro perpetual futures and Ethena’s synthetic dollar. However, Chen shared he doesn’t necessarily track progress by the same metrics as others, like total value locked.

“For our case, I think volume is the most accurate metric to keep track of all the financial activities going on within the injective ecosystem,” he said. “Interestingly, one of those KPIs is actually the volume-to-TVL metric which means to support the organic volume within the ecosystem.” 

Injective's TVL and volume have trailed a bit since the beginning of the year. (Source: Defi Llama)
Injective's TVL and volume have trailed a bit since the beginning of the year. (Source: Defi Llama)

Both metrics have retreated a bit since earlier in the year, according to Defi Llama, but remain far elevated over last year when Injective was finding its footing. Injective’s token INJ is up 183% since one year ago.

Now, coupled with a recent uptick in volumes, Injective’s token is set to become far less inflationary due to a new “INJ 3.0” community proposal. If injective can keep up the trend, that should continue to bode well, Chen said.

“This is one of the most exciting alignments of stakeholders and all the ecosystem participants because they all came together and came up with this initiative for ‘INJ 3.0,’" he explained. “One of the most exciting things is that it's going to be a gradual decrease in inflation and eventually, I think, even reaching up to like 2% to 3% if all the metrics stay constant.” 

In general, projects boasting tokenomics that reflect a positive growth in fees while dropping supply inflation have enjoyed the largest gains in this cycle, according to data from VC Sonia Kim.

Coinage members can watch our full interview with Injective Labs co-founder Eric Chen above. To support our community-owned outlet, own it with us, and unlock other exclusive benefits, mint one of our Membership Passes today! Chat with Coinage in our Discord.


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