Injective is set to pioneer a new age of finance with the upcoming launch of Project X.
First unveiled last week during Cosmoverse 2022, Project X will revolutionize the way in which both developers and users can access finance to bring true mass adoption. Project X is a combination of strategy vaults for passive yield generation, AMMs with impermanent loss (IL) protection and a one click launchpad. This would in turn enable projects to launch with a unified solution that is 100X cheaper and 10X more efficient. In short, Project X will be the de facto hub for all of DeFi.
What Is Project X?
Project X is a next generation DeFi protocol that is comprised of two primary components:
- Automated strategy vaults for marketing making and passive yield generation
- A one click Launchpad for fundraising and listings
The automated trading vaults will allow users to provide passive liquidity and access trading strategies previously inaccessible to everyday users. In essence, the trading vaults act as an Automated Market Maker (AMM) without any impermanent loss (IL) risk. All trading vaults and strategies will be executed on-chain, which can provide further liquidity across the on-chain orderbook primitive utilized by exchange dApps built on Injective.
The one-click launchpad will allow any developer to permissionlessly fundraise for a project and instantly list it on Injective exchange dApps in just a single click. The launchpad will enable anyone to create various forms of decentralized launches such as dutch auctions or direct listings.
The beauty of this new paradigm is that every single component of Project X works in tandem in order to engender robust positive feedback loops for the broader Injective ecosystem. For instance, a builder can do the following:
- Create a new token using the Launchpad
- Fundraise for the project with a wide array of decentralized auction formats
- Instantly list the new token across exchanges built on Injective
- Bootstrap the initial liquidity for the token using the automated trading vaults
- Reach a massive audience of users within Injective which is a direct gateway to the interchain, Ethereum, Solana and EVM ecosystems
By doing so, the builder can dramatically reduce the costs associated with new token launches (no listing fees as is the case with many exchanges and no cost in hiring external market makers). In fact, the developer can create a highly capital efficient environment for the new token using the strategy vaults.
Background: A Year of Nonstop Building
Project X has been the culmination of a year of nonstop building in stealth by the Injective Labs team.
The Injective Labs team is now made of 40 of the best and brightest in all of crypto. The team has decades of experience working at some of the best quantitative hedge funds (i.e. Tower Research, Two Sigma), tech companies (i.e. Tesla, Amazon) and the largest crypto exchanges (i.e. OKX, Kraken). In addition, the team comes with an unmatched pedigree in education having studied at institutions such as Stanford and Harvard.
Although the teammates come from different walks of life, everyone on the team is deeply driven by a passion to fundamentally democratize finance for all.
Traditional finance keeps everyday users out of smart strategies
Traditionally, institutions and hedge funds pour billions of dollars into developing the optimal models and trading strategies. The general public, however, rarely has exposure or access to these technologies and are kept out. Even if you’re knowledgeable enough to create advanced strategies, trading normally requires active management, significant execution and networking risk, and a quantitative background for optimal parameter setting.
Current DeFi solutions are costly and inefficient
Sophisticated on-chain strategies are difficult to implement in a generalized environment. In addition, nearly all solutions for liquify provisioning rely on the AMM model which brings a high degree of impermanent loss (essentially liquidity providers lose a significant portion of their funds to arbitrageurs). In addition, the cost for an AMM to achieve the same level of liquidity as a centralized exchange is typically 10–100X higher.
Project X was built to allow developers and users to access not only smart trading strategies but also passive liquidity provisioning strategies. The combination of these two pillars work to truly democratize finance for all.
This, of course, is all made possible by the best-in-class infrastructure available on the Injective blockchain. Injective provides the dominant on-chain orderbook primitive in the industry and is the only orderbook in production that can entirely eliminate frontrunning/MEV with the use of a Frequent Batch Auction (FBA) model. Injective also brings a powerful interchain CosmWasm smart contract layer that is uniquely able to support self-executing smart contracts. The on-chain DeFi primitives coupled with Injective’s innovative smart contract layer create the ideal and only sustainable environment where Project X can be launched.
Part 1: Automated Strategy Vaults
Project X will bring the most sophisticated technologies from Wall Street to an entirely decentralized and permissionless network.
There will be multiple strategy vaults that users can choose from, with an associated on-chain strategy. Each strategy will be executed automatically (through CosmWasm), creating new yield opportunities for users without needing to spend years learning quantitative finance.
A demo of one specific strategy vault was shown during the Cosmoverse keynote presentation. During this demo, you can view as a user inputs in USDT into a vault called “Nebula”. Users will be able to simply connect their wallet and deposit directly into the platform (utilizing any network or wallet that is integrated into Injective) .
Nebula is a vault that takes part in market making on the order book for the BTC perpetual market on Helix. So the user is able to earn yield while the USDT is used to carry out market making functions on a fully on-chain order book, leading to far more capital efficiency and liquidity for the exchange dApp ecosystem on Injective.
Part 2: One-Click Token Launchpad
Project X will also include a launchpad, allowing any developer to launch tokens permissionlessly with one click.
The Launchpad is vastly superior to any other solution in the market for a number of reasons. Anyone can easily fill in their token details (project name, ticker, etc.) to create a custom offering. In addition, you can choose from a number of launch formats such as a dutch auction or a direct listing. From the reverse perspective, an end user can easily explore and participate in the project sales available.
Why Project X is a Paradigm Shift for Crypto
The beauty here is that all components of Project X are interlinked with the broader Injective ecosystem. For example, a new token that conducts a public offering via the Launchpad can immediately have that asset listed on Injective exchange dApps such as Helix.
Previously launching a token was a cumbersome effort, requiring months of coordination with centralized entities such as market makers, a multitude of technical integrations and exorbitant fees. DeFi solutions are also largely expensive and prevent access due to the complicated steps needed and low liquidity.
However, with the help of Project X anyone can list a new token via the Launchpad model. In addition, you can create a strategy vault for your new token and directly input in some funds which would be utilized by Injective’s automated smart contracts to effectively market make on an order book.
Developers no longer have to deal with centralized parties or pay high fees to market makers. Furthermore, creators no longer have to rely on solutions such as AMMs which typically are highly capital inefficient and suffer from major impermanent loss risk. In fact the demo shown here illustrates that the strategy vault model created by Project X is 10X more capital efficient relative to an AMM, meaning that it would require developers 10X more in funds to achieve the same levels of liquidity that Project X automatically provides.
As a result Project X provides a gateway for unmatched capital efficiency and far lower costs that save millions for projects and participants alike. Overall, this enables DeFi to reach entirely new heights as accessibility to new assets becomes apparent from day one.
Project X will reshape the industry by enabling both developers and users to seamlessly access DeFi. By doing so, Project X is setting the stage to bring about true mass adoption of DeFi.
Moving forward, the Injective community will be able to test and use the groundbreaking innovations of Project X. Further details regarding the launch will be made available via the Injective social channels so subscribe and stay tuned!
Project X will democratize the way both users and projects will interact with DeFi. Users will now gain access to strategies previously inaccessible for a general audience while developers will find the leading platform for launching new tokens. Project X will also help accelerate the growth of the overall Injective ecosystem as a diverse array of dApps become further interconnected with the ability to leverage the primitives of Project X to build exciting new innovations in decentralized finance.
Welcome to a new world of decentralized finance. Welcome to Project X.
Injective is a specialized 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 prominent investors such as Jump Crypto, Pantera and Mark Cuban.