Is the L1 track in 2023 a standout? The future journey of INJ still has uncertainties

As 2023 comes to a close, investors may reflect: is missing out on Injective (INJ) a huge regret? On November 30, the well-known cryptocurrency exchange OKX announced the listing of Injective, joining other mainstream centralized exchanges (CEX) like Binance, HTX, and Bitget in supporting the project. Throughout the year, the price of Injective surged from an initial $1.25 to a recent high of $26.67, achieving an astonishing increase of 2033.6%. Compared to other Layer 1 projects, Injective's performance stands out significantly.
In the context of a bear market, the ability of Injective to achieve over 14 times growth is undoubtedly a phenomenon worth noting. Such achievements are rare in the cryptocurrency market, especially among public chain projects. However, whether this growth is sustainable and whether Injective has reached its market cap limit remains a hot topic in the market. Investors and analysts hold differing views on this, but regardless, Injective's performance in 2023 has left a profound mark in the cryptocurrency space.

Introduction to the Injective Project: Built on Cosmos-SDK, with total funding exceeding $50 million

In 2023, despite the overall cryptocurrency market struggling in a bear market, Injective has significantly stood out. According to CoinMarketCap data, the price of Injective rose from $1.25 at the beginning of the year to $19.20 in November, achieving an impressive increase of 1436%. This performance brought its market cap to $1.516 billion, ranking it 41st in the cryptocurrency leaderboard, surpassing well-known projects like OP, AAVE, and MKR.

Price trend of INJ assets
Data from Dune Analytics further reveals the growth trend of Injective. Since January 2021, the number of Injective holders has steadily increased, especially at the beginning of 2023, when the number grew from about 12K to 24K, indicating its popularity among investors. Among these holders, large holders account for half, demonstrating strong support in the market, while the proportion of retail investors also indicates its appeal to ordinary investors.
Injective is built on Cosmos-SDK and uses the Ignite (formerly Tendermint) consensus mechanism, ensuring instant and secure transactions. Its plug-and-play modules, such as order book and derivatives trading modules, allow developers to quickly launch and build financial applications, promoting the diversification and expansion of the Injective ecosystem.
Investment and technology are key factors for Injective's rise against the trend in the bear market. It has received support from major investment institutions like Binance Labs and Pantera Capital, completing multiple rounds of financing in 2020 and 2021. The total funding for Injective has reached $52.6 million. Additionally, Injective's technological layout in 2022, including cross-chain bridges, CosmWasm smart contract layers, binary options modules, and the launch of cross-chain accounts, laid the foundation for its breakout in 2023.
Furthermore, Injective has continued to develop rapidly this year, including expanding access to stablecoin assets through integration with Kava, collaborating with Google Cloud to integrate Web3 financial data into Google Cloud BigQuery, and launching a $150 million ecosystem fund to accelerate interoperability infrastructure and DeFi adoption. Injective has also incentivized developers to build projects in various fields through hackathons in collaboration with Google Cloud.
Injective's positioning in DeFi and derivatives, combined with its technological innovations and strong investment background, makes it one of the highlights of the cryptocurrency market in 2023. Its ability to achieve such significant results in a bear market demonstrates its strong market adaptability and potential for future growth.

Analysis of the INJ Economic Model: 16% annual return under POS mechanism, over 5.8 million INJ burned

The INJ token is the native token of the Injective protocol, serving multiple functions such as governance, staking, and trading. Token holders can participate in important decisions of the protocol, such as promoting the listing of new derivatives, setting trading parameters, and upgrading the protocol itself. In terms of nodes, establishing a node not only provides liquidity for Injective but also allows users to earn a share of transaction fees, with users hosting nodes able to receive up to 40% of the fee share. Additionally, trading nodes can earn extra rewards by providing improved interfaces or dedicated APIs.
For INJ holders, by staking to existing validators or setting up their own nodes to become validators, they can earn network security rewards and participate in Injective's governance. Furthermore, Injective offers a decentralized derivatives trading platform that allows users to trade freely and create new derivative markets, with early users having the opportunity to earn INJ rewards.
Transaction fee auctions are another feature of Injective, where the monthly buyback and auction mechanism reduces token supply. Holders can bid for transaction fees using INJ tokens, and the INJ obtained from the auction is burned. According to statistics, the distribution of Injective's transaction fees is 0.1% for market makers and 0.2% for traders, with last week's fee revenue around $55,000, of which 40% is used for developer incentives, and the remaining 60% is auctioned through buyback and burn mechanisms.

Injective: Over $70 million INJ has been burned to date
Injective has achieved a global DAO, with a minimum voting requirement of 500 INJ, and each voting period lasts for 4 days. In terms of token economics, INJ is a deflationary asset that provides a 16% annual return through the POS mechanism and has burned over 5.8 million INJ. Currently, Injective's total supply is 100 million, with a circulating supply of 83.76 million, a market cap of $1.3 billion, ranking 21st in total value storage (TVS), with a staking ratio of 58%, a reward rate of 21.72%, and an inflation rate of 13.3%.
As of now, 96.33% of the total supply of INJ has been unlocked, with the remaining 3.67% still locked. The distribution is as follows:

Overall, as the native asset of the Injective protocol, INJ is designed with an economic model aimed at promoting the sustainable development of the protocol while providing value to its users and participants.

The future of Injective is unpredictable, but its security has received a high score from Certik

Injective is facing two main categories of competitors in the rapidly evolving decentralized finance (DeFi) market: established EVM-based perpetual contract platforms such as GMX, Gains, and Synthetix; and emerging custom application chain projects like dYdX, Kujira, and Sei. Although these projects are all vying for a leading position, Injective is gradually solidifying its market position through its innovative technological solutions and ongoing market expansion.
Injective's security has been audited by CertiK, receiving a score of 73.66, particularly excelling in areas such as code security, basic health, operational resilience, and governance strength, indicating its outstanding performance in these key areas. However, it received a lower score in market stability, suggesting that the project needs to continuously prove its robustness amid market volatility.
Compared to mainstream projects like Ethereum, Solana, and various Layer 2 solutions, Injective may not yet have received the same level of discussion and exposure, but its steady growth in market cap and the appearance of the founder of Injective Labs on Forbes' "Under 30 Finance 2024" list indicate that its reputation and influence in the industry are on the rise.
Leaders in the cryptocurrency market often emerge in unexpected ways, and with its solid technological foundation and gradually expanding market recognition, Injective may be in a stage of preparing to make a significant move. Therefore, maintaining continuous attention on Injective's development may be a wise choice for investors who do not want to miss the next market opportunity.