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0. What is Injective Protocol?
Introduction
Injective Protocol is a decentralized cross-chain derivatives trading platform that is also hosted on a decentralized peer-to-peer network (i.e. InterPlanetary File System) as opposed to most of the DeFi platforms out there which are hosted on centralized servers like AWS, Azure or GCP, hence, making it more censorship resistance. Injective Protocol is built with Ethermint and implemented as a Cosmos SDK module. All operations that are happening on Injective Protocol are recorded and validated via Cosmos Tendermint-based Proof-of-Stake protocol.
Problems with DEX that Injective Protocol Is Solving
Decentralized Exchanges (DEX) which were traditionally built on Ethereum main net are usually slow in confirmation and suffer high gas fees whenever the traffic is congested, making them not suitable for intraday trading, which resulted in many users still resorting to centralized exchanges like Coinbase, Binance, KUCOIN and FTX among others to conduct their trading activities. Injective Protocol is solving this problem by allowing digital assets from several other blockchains to be bridged to their layer-2 injective chain which offers lightning-fast execution speed and zero gas fees.
Front running is also a big problem in most DEX as Ethereum miners are able to arbitrage internally by re-ordering the transactions within the blocks that they produce, but Injective Protocol solves this issue by utilizing Verifiable Delay Function (VDF) to prevent front-running.
Product Offering and Unique Features that Can Be Found Only On Injective Protocol
Unlike other Automated Market Making protocols like UniSwap and SushiSwap which rely on liquidity pools supplied by different users and maintained via constant product formula , Injective Protocol offers an order book-based system and allows its users to trade on not just spot/ pairs that most DEX provides, but derivatives with leverage capability like perpetual futures, swaps and margin trading which are hardly available in most of the DEX that are currently available.
Injective Protocol Buyback and Burn Mechanisms
In order to ensure that INJ tokens are deflationary and encourage users to stake INJ, the protocol has a buyback and burn mechanism which targets to burn 60% of all exchange fees every week where users could bid for the fees collected (e.g. ETH, WBTC) at a discounted price, but all biddings can only be done using INJ tokens. Bidders who offer the most competitive price would be selected and the INJ tokens paid to acquire these fees would be immediately burnt.
Have You Tried CRYPTO.COM Exchange ?
Are you interested in grabbing some INJ with easy-to-use platform that offers not-so-expensive exchange fees, Crypto.com may be your choice.
If you are interested in signing up an account/ getting a Visa card with crypto cashback rewards from Crypto.com, you may sign up with quantdoge referral link as follow:
https://crypto.com/app/j2dc67xe82 with the referral code of j2dc67xe82 , where both of us would get USD 25 once you stake for a Ruby card or above.
1. How Injective Protocol Performs Relative to Other Cryptos ?
Performance of All Cryptos Under Quantdoge Watchlist in 2021 (Sorted by % Return)
INJ has undergone 131.48% return from USD 4.0432 to USD 9.3594 since 01 Jan 2021. INJ is the 22th best performing crypto assets among others here.
2. How Resilience Injective Protocol Is Towards Bitcoin Crash Relative to Other Cryptos ?
Historically, all altcoins are somewhat dependent on Bitcoin price movement and it’s often the case where if Bitcoin falls, most altcoins would follow.Top 3 Cryptos That Are Most Resilient To Bitcoin Crash During Each of BTC 4 Largest Crashes in 2021
INJ has proven resilience against BTC crash in 2 out of the 4 instances.
During the last 4 BTC market crashes,
When BTC dropped by -13.47 %, INJ returned -33.81 % at 20 May 2021,
When BTC dropped by -13.13 %, INJ returned -16.9 % at 22 January 2021,
When BTC dropped by -12.16 %, INJ returned 2.74 % at 13 May 2021,
When BTC dropped by -11.39 %, INJ returned -15.63 % at 22 June 2021
3. Technical Analysis on Injective Protocol
VWAP is a technical indicator used by a trader to gauge the overall trend of an asset price movement. VWAP line (orange line) represents the volume-weighted average price (average price here is defined as the average of high, low and close prices) while close price line (blue line) represents the price when INJ is closed at the end of every single day.
Whenever blue line (close price) is above orange line (VWAP), it indicates that the asset is gaining momentum and being traded higher than its average price level. This would represent a 'buy' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'sell' opportunity, anticipating that the price of INJ (blue line) to fall to its average level (orange line).
Whenever blue line (close price) is below orange line (VWAP), it indicates that the asset is losing momentum and being traded lower than its average price level. This would represent a 'sell' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'buy' opportunity, anticipating that the price of INJ (blue line) to rise to its average level (orange line).
As of 27 Dec 2021, VWAP is suggesting that INJ is gaining momentum.
MACD (12, 26) is computed by subtracting the 26-day exponential moving average (EMA) of INJ closing price from its 12-day EMA.
As MACD (12, 26) goes higher away from Signal (9), it signifies that INJ is gaining momentum and whenever it goes trends at a lower level than Signal (9),it signifies that INJ is losing momentum.
As of 27 Dec 2021, MACD is suggesting that INJ is gaining momentum.
- SMA (20) (blue line), which is the 20-day simple moving average price of INJ
- Upper Band (orange line), which is computed by adding 2 standard deviations of INJ on SMA (20)
- Lower Band (red line) , which is computed by subtracting 2 standard deviations of INJ from SMA (20)
- Close (green line), which is the daily closing price of INJ
Whenever close line (green) touches the lower band (red), it indicates that INJ is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever close line (green) touches the upper band (orange), it indicates that INJ is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity.
As of 27 Dec 2021, Bollinger Band is suggesting that INJ is being overbought.
Just like Bollinger Band, Relative Strength Index is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. There are 2 psychological levels, i.e. 30 and 70 in RSI. Whenever the RSI reaches 30, it indicates that INJ is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever RSI reaches 70, it indicates that INJ is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity.
As of 27 Dec 2021, RSI is suggesting that INJ is neither overbought nor oversold.
Based on the technical analysis presented above, quantdoge holds a neutral stance on the short-term price outlook of INJ but I could be wrong, hence please make your careful due diligence before making any financial decision.
4. Injective Protocol Risk Profile
Based on the 100-day 95% historical Value-at-Risk (VaR) profile of Injective Protocol defined above, INJ seems to trade at a lower risk level on 27 Dec 2021 as compared to 10 days before on 17 Dec 2021, with its biggest pullback being seen at -21.99% on a single day during the last 100 days. However, I could be wrong, hence please make your careful due diligence before making any financial decision.
5. Price Simulation for Injective Protocol
How did quantdoge simulation perform vs the actual INJ price movement over the last week ?
Over the last 7 days, INJ is trading beyond the upper 75th quantile of all quantdoge simulations, indicating that INJ is overbought and is greatly overvalued at this price level.
6. Google Trends Analytics
injective protocol reached its peak in Google Search on 2021-01-31 with a Google Score of 100
Over the last quarter, injective protocol Google Score has increased 1.14 % from 23.4 to 23.67
Over the last 6 months, injective protocol Google Score has increased 63.22 % from 14.5 to 23.67
Over the last month, injective protocol is most saught after in Turkey, followed by Romania and Austria.
