UniLend Finance AMA Recap with Injective Protocol
On the 26th of February, 2021, Eric Chen, Co-Founder & CEO of Injective Protocol, was live at the UniLend Finance Crypto Community telegram group, to provide the community with insights on Injective Protocol, and also answer every of their questions and queries. The session was moderated by Vishal Kothari, the Community Lead at UniLend Finance and Anmol Gaur, UniLend Finance Community Moderator.
In order to ensure clarity to my readers, this article has been divided into two segments; the first segment, gives full account of the questions asked by the moderator(s) of this AMA session , while the second segment gives account of the of the questions asked by UniLend Telegram community members.
Vishal — Please welcome Eric Chen, Co-Founder & CEO Injective Protocol to our Community.
Eric Chen — Hey everyone! Glad to be here.
Vishal — We are also excited. Before we start can you tell more about the Injective protocol project and idea? About your background?
Eric Chen — Injective Protocol is the first layer-2 decentralized exchange protocol that unlocks the full potential of decentralized derivatives and borderless DeFi. Injective Protocol enables fully decentralized trading without any restrictions, allowing individuals to trade on any derivative market of their choosing.
Injective started off as a research project in which we were finding ways to build a fully decentralized orderbook exchange without the common security issues. We faced issues like front running, trade collision, gas auction, and miner extractable value. Right now due to the constraints of Ethereum, the on-chain settlement has proven to be slow, probabilistic, and overall trader unfriendly. We aim to build the most trader-friendly platform with uncompromising decentralization via layer-2 scalability!
Anmol Gaur — That sounds really good.
Vishal — Wow Derivatives on DeFi!
Eric Chen — Prior to Injective, I was a researcher at a fund working on trading strategies and protocol research. Before that, I was also part of the NYU Blockchain Labs
Vishal — Great. How is Injective Protocol different from the other DeFi projects?
Eric Chen — Injective allows any individual to create and trade arbitrary DeFi instruments with just a price feed. Users are empowered to create their own markets within Injective Protocol. Our DEX is based on the Cosmos-SDK and Ethereum network that integrates a frequent batch auction model to prevent transaction fraud and front-running. We use a Tendermint-based Proof-of-Stake (PoS) to facilitate cross chain DeFi trading across Cosmos, Ethereum, and many other layer-1 protocols.
Our protocol features zero gas fees when trading, the ability to earn cross-chain yield generation for a multitude of assets, and the opportunity to create and trade on any market using only a price feed. In addition, we are the first DEX to introduce on-chain referral via which any user can earn 40% of exchange trading fees as a reward for referring their friends.
Injective is fully open and permissionless, allowing you to freely trade, and even create new markets on the Injective Protocol exchange. Injective Protocol is the first universal DeFi protocol for cross-chain DeFi trading across a plethora of financial products.
Vishal — Zero gas fees. Wow! What made you start the Injective project and what are the global problems that you think Injective can solve?
Eric Chen — Injective started as a research project looking to tackle potential issues that became widespread today! Some of which includes front running, miner extractable value, gas auction, and many more.
Fast forward to now, we’re glad to say that we have a solution for all of them and we aim to build the most trader friendly platform with uncompromising decentralization via Layer-2 scalability!
Vishal — In your view, is the market share of Decentralized Exchanges (DEXs) limited by Centralized Exchanges (CEXs)? What are your strategies for expanding Injective’s market share?
Eric Chen — I don’t believe that the market share of DEXs is limited by CEXs, especially given the recent explosion in DEX volume. I think there are a lot of potential markets that are left untapped by CEXs due to execution risk, regulation, and trust. We aim to leverage our advantage and discover these markets before CEXs can and build up our ecosystem that way.
Vishal — What interested me the most is Verifiable Delay Functions (VDFs) and selective delay? Please explain more about these Robust Security Features and how they ensure safety on your Layer 2 exchange protocol.
Eric Chen — VDF is a powerful cryptographic algorithm that enables unparallelizable computation, thereby simulating wall clock time. It can help us combat front running in many ways. Selective delay is a further mechanism that helps prevent order sniping and front running order cancellation
Vishal — That’s awesome. How does Injective’s token (INJ) work and what are some use cases?
Eric Chen — The use cases intended for INJ include but are not limited to: protocol governance, exchange fee value capture, DeFi collateralization, liquidity mining, and staking.
- Protocol Governance: The INJ token can be used to govern various components of Injective’s sidechain including the DeFi protocol, exchange parameters and protocol upgrades via a DAO structure.
- Exchange Fee Value Capture: After the relayer reward distribution, the exchange fee will undergo an on-chain buy-back-and-burn event to accrue value for INJ.
- Collateral Backing for DeFi: INJ will be utilized as an alternative to stablecoins as collateral for Injective’s DeFi markets. In some DeFi markets, INJ can also be used for collateral backing or insurance pool staking where stakers can earn interest on their locked tokens.
- Exchange Participation Incentives: The foundation plans to incorporate a liquidity mining scheme and distribute a fixed number of INJ tokens daily weighted by the liquidity each network participant provides.
- Tendermint-based Proof-of-Stake (PoS) Security: To ensure the security of Injective’s chain, Injective will incentivize nodes to stake INJ and participate in the sidechain’s network consensus with block rewards.
Vishal — So wholesome package through a single token. Great! How do you look the partnership of the UniLend and Injective can make a difference in this DeFi space together?
Eric Chen — I’m looking forward to see the partnership unlocking new possibilities between money markets and derivatives. Grounded with our cross chain ethos, this opens up a great degree of flexibility for the DeFi markets as a whole.
Soon, anyone will be able to utilize Injective’s derivatives on the UniLend ecosystem. In addition, INJ will be added to UniLend.
Anmol Gaur— Now lets take questions from our community. I’m sure they’re keen to interact with Eric.
Community Question 1 — Ambassadors play a very important role in every project, Do you have an ambassador program? If yes, how can I be one?
Eric Chen — Yes, stay tuned!! We will be rolling out an ambassadors program very soon.
Community Question 2— Are you planning to burn or buy back any tokens from the market in the future? Do you have such programs? Marketing is a central element for every project, so that everyone know the potential that a project can bring is vital to achieve the goals set. What is your strategy to attract new users and investors to your project and keep them long term?
Eric Chen — It’s well embedded in our token economics that I discussed before.
Community Question 3— Do the token holders have right to participate in the governance of the project? On what kind of decisions can they vote on about the project?
Eric Chen — Yes, and simply put, everything! Because the token is used for proof of stake consensus, that means that your token is used to govern every single aspect of Injective!
Community Question 4— Which markets your project focusing now ? And do you have plan bring your project to other markets?
Eric Chen — So far we have over 20+ markets on Solstice, but our focus for equinox will be to expose the creation of these new markets to the general user rather than continue listing new markets from our end.
Community Question 5— Can you indicate a feature or feature that you like best about the platform so that it can compete with other competitors? What are you most confident about for your platform? Do you have plans to get users to choose your platform?
Eric Chen — Can’t talk too much about things that are still in research stage, but two words: decentralized hedge fund.
Vishal — Thanks again for joining us today, have a great day ahead! So here we conclude the AMA with Eric Chen, CEO of Injective, do check out their community for more info.
Eric Chen — Thanks so much guys!! Really enjoyed chatting with you all
Vishal — Also would like to thank our community to be more sporting.
Anmol Gaur — It was a pleasure having you in our community Eric Chen.