The Injective Canonical Chain Mainnet is live!
The mainnet upgrade marks the beginning of a new chapter for the entire Injective community as the Canonical Chain ushers in a new era of decentralized finance.
The Canonical Chain brings unrestricted transfers and trading on the mainnet alongside robust token economics, seamless interoperability, novel products and the most powerful exchange in the world of DeFi.
The article here will be divided into a few core sub-sections with a focus on each new update. It will also explain upcoming governance proposals for the liquidity incentive program, new listings and on-chain VIP fee tiers.
Injective Governance Proposal #65 passed today which carries out the fully on-chain canonical software upgrade.
On a technical level, the passing of Proposal #65 halts the Canary Chain at block 435200 on Nov 8th and starts the application binary for the canonical instance of the Injective Chain. Injective validators updated their nodes to the latest binary and restarted the chain in order fulfill these chain upgrade parameters.
During the Canary Chain process, Injective released a number of pioneering products for the entire crypto industry. The Injective community released the Injective Bridge which is the first production deployment of the Cosmos Gravity Bridge. The Injective Bridge now secures over $100 Million and was recently IBC enabled as well which can allow for new forms of composability across distinct sovereign chains across DeFi. The Injective Hub was also created which serves as a DeFi gateway for staking, governance, insurance funds, and much more!
The community worked tirelessly to build the most exceptionally performant exchange in the market today. The exchange itself was revamped on a protocol level with new sophisticated backend tooling. A fully fledged Injective Pro relayer was launched alongside three other relayers such as Picasso Exchange and MarsX.
A fleet of new products were released alongside the new relayers to help provide unprecedented access for traders globally. An institutional grade API was released to help onboard more market makers and sophisticated funds onto Injective. In addition, the Injective Explorer launch allowed for anyone to view detailed breakdowns of all on-chain transactions and trades.
To put all of these product releases in context, most projects take years to deploy even one functioning product. The Injective community was able to release a number of novel products that fundamentally reshaped the crypto industry in just the past few months alone and this is only the beginning!
Unrestricted Transfers and Trading
One of the primary updates for the Canonical Chain is the ability to enable unlimited transfers and trading on the Injective Chain. Prior to the update, the Injective ecosystem restricted bridge transfers to the Injective Chain to ensure the safety and security of the network during the final stages of the Canary Chain. This community-driven update is instrumental in ensuring that new users and institutions that onboard can bridge over any amount of assets using the native cross-chain Injective Bridge.
Injective users played an essential role to the canonical upgrade, helping to test and provide feedback throughout the Canary Chain process. Over $100 million was bridged over to the Injective Chain during the Canary phase, even with the restriction that only a maximum of a few thousand dollars could be transferred at a time. Now, with the Canonical Chain upgrade, individuals can begin to freely use all features of the Injective Chain; thereby enabling more liquidity and access to Injective Protocol itself.
An upcoming proposal for the liquidity incentive program has the potential to further accelerate the liquidity on Injective. More details on these proposals can be found in the Liquidity Incentive Program section of this article.
Improved INJ Token Economics: Buy Back and Burn
A core tenant of the Canonical Chain upgrade will be the addition of new features that will lead to much more robust token economics for INJ itself. The community has been vocal on the tokenomics they believe are integral to the growth of the network, and have worked to incorporate these tokenomics to upgrade proposals. This will allow Injective to have the highest token burning ratio in the entire exchange industry.
Every week, 60% of fees collected on the protocol will undergo a buy back and burn process. It works in the following manner:
- Fees collected on Injective are put into an auction (For example: let’s say that there is a basket of $100. $50 are in ETH and $50 are in WBTC)
- Users can bid on this basket using INJ (let’s say User A bids $90 and User B bids $95)
- User B will will win the bid with $95 and will be able to immediately realize a profit of $5 through arbitrage
- The $95 paid in INJ will be immediately burned
Users are incentivized to participate in the auctions due to the potential arbitrage opportunities as shown in the example above. Keep in mind that the fees collected on Injective are not restricted to the exchange itself. The protocol can earn fees from all relayers and new DApps built on Injective. So there are a multitude of avenues via which the protocol can collect fees which help in the INJ token burning process. The auction UI is expected to go live in the next two weeks for the first ever INJ burn auction!
In addition, relayers built on Injective can earn 40% of all fees on the exchange which can help builders on Injective to monetize their products. The fee structure of Injective can also aid in the creation of new referral programs. For instance, a relayer can potentially create an affiliate program via which influencers and traders can refer their friends to the Injective exchange. The relayers can incentivize these affiliates with a portion of the trading fees that they help generate. This in turn can create a viral loop via which a surge of new users and trading liquidity is brought onto Injective.
First Ever Fully On-Chain VIP Fee Discount Program
The upgrade proposal includes a modular architecture that can allow a VIP Fee Discount Program to be implemented on-chain. This will be the first fully decentralized VIP fee Discount Program in the entire crypto industry!
Essentially, users of Injective can pay lower fees on the exchange based on their staked INJ amounts and trading volumes generated. The VIP Fee Program will be proposed this month via the governance portal so that the community can help determine the different fee tiers. If passed, the program can also encourage users to hold INJ and promote volume on the exchange.
Liquidity Incentive Program
Another paramount feature of the upgrade allows for an on-chain liquidity incentive program to be implemented.
If passed, the program will allow users to earn fee rebates on each trade, thereby further encouraging others to trade on Injective. The community can also implement special rebates on specific markets in order to promote liquidity. For instance, a user proposing a Solana Perpetual market can choose to include a higher rebate tier that the entire Injective community can then vote on via the Injective Hub.
The proposal for the Liquidity Incentive Program is expected to go live next week.
Final Thoughts and Next Steps
The core mission driving the Injective community has always been to create a more free and inclusive financial system through decentralization.
The Canonical Chain launch marks the beginning of a new chapter in which community members and users can utilize every Injective mainnet product in an entirely unrestricted manner.
In the coming days and weeks, a number of governance proposals will be launched that will allow the community to implement new market listings, a fully on-chain VIP Fee Discount Program and a robust liquidity incentive program. In addition, the community can start participating in the largest buy back and burn program in the entire exchange industry. Lastly, expect to see an entirely updated roadmap that will inform everyone about major upcoming products and events. The roadmap will include new launches such as an upcoming stablecoin, new DApps and more utility for INJ itself.
The Canonical Chain is the start of an extraordinary journey that will take Injective and the entire crypto industry to new heights.
The future is here.
Injective is a custom interoperable layer one protocol for building powerful exchange, DeFi, derivatives & Web3 applications. Injective was created using the Cosmos SDK and is able to achieve instant transaction finality while sustaining lightning fast speeds. INJ is the native deflationary scarce asset that powers the Injective Protocol and its rapidly growing ecosystem. Injective is incubated by Binance and is backed by Pantera Capital.