What is Injective Protocol?
Injective Protocol (INJ) is a fully decentralized and highly parameterized layer-2 protocol providing users a diverse array of derivatives and staking for platform native ERC-20 INJ utility token. Injective Protocol is comprised of five main components: Injective Chain, Injective Exchange Client, Injective API Provider, Injective Ethereum Virtual Machine (EVM) RPC provider, and Injective Bridge Contracts on Ethereum. Injective Chain is the backbone of Injective's layer-2 derivatives platform used to host fully decentralized orderbooks, trade execution coordinator, EVM execution environment, and a bi-directional token bridge for Ethereum ERC-20 assets. Injective Chain supports the implementation and execution of smart contracts using a modular implementation of the Ethereum Virtual Machine built on Cosmos SDK with Ethermint (Tendermint) framework, thus provides users a highly scalable and interoperable implementation of Ethereum using Proof-of-Stake consensus algorithm with 1-block finality. Decentralized Application (DApp) developers can utilize Injective EVM and enjoy native support for transaction fee delegation and increased contract bytecode size limit. Injective DEX Protocol supports peer-to-peer spot and derivatives trading through the implementation of Solidity smart contracts deployed in the Injective Layer-2 EVM execution environment. Injective Derivatives Protocol allows users to create, enter into, and execute decentralized perpetual swap contracts and CFDs (Contract for Differences) on any decentralized exchange. The Injective Coordinator Contract serves as a liquidity solution allowing for more competitive pricing by preserving front-running for lower latency trading. Unlike similar implementations which only require one signature from a centralized coordinator, Injective requires transactions to have a minimum threshold of coordinator signatures for a transaction to be approved, as provided by application logic encoded in the Injective Chain consensus algorithm. Coordinators are bonded through INJ stake and can be eliminated for improperly approving transactions. Injective Bridge Contracts maintain a two-way peg between Ethereum and the Injective Chain. Injective Decentralized Orderbook enables sidechain order relay with on-chain settlement - a decentralized implementation of the standard off-chain order relay method used by many central limit order book DEX.
