Injective Protocol— How to Fully Decentralized Trading in an Easy Way
Cryptocurrency trading has become a popular activity in recent years. Moreover, bitcoin is getting more popular after reaching fantastic prices in 2017. In addition, cryptocurrency trading has become an effective alternative to dealing with economic difficulties in this pandemic. So we must make good use of this opportunity, learn about trading well and use it as a potential source of income.
For many people, this is their first experience in trading assets to try to make a profit. So it’s normal if beginners need help with technical matters and basic knowledge to help them figure out where to start cryptocurrency trading. Choosing a trading platform must be well considered in order to avoid losses, such as hacking and theft.
Centralized vs Decentralized Exchange, Which one do you choose?
In general, there are two types of exchange, namely centralization and decentralized exchange. A centralized exchange is a cryptocurrency exchange/trading platform regulated by a central company. Whereas decentralized exchange does not depend on companies or services for trading, so peer to peer trading or transactions are controlled by automated processes that are carried out by smart contracts.
After knowing the difference between the decentralized and centralized exchange, now you have to know which one you need the most and make you comfortable using the exchange. Here are important things you should consider to choose a crypto exchange.
- KYC/AML → Some exchanges require KYC and AML to withdraw funds and to increase certain withdrawal limits, users are required to provide a copy of their photo and identity.
- Reputation →The reputation of the exchange is very important because many exchanges are involved in crime, hacking and fraud. In addition, the exchange is often the target of hackers for theft.
- Security → Every exchange has various security to protect its users, such as 2FA, authentication email/phone number.
- Fees → The fees for withdrawals vary by platform and are usually based on the percentage of each trade. It is important to know how much is the fee charged for each transaction so that your budget stays appropriate.
The next question is where you can trade and which sites are trusted to be able to trade Bitcoin and another cryptocurrency? If you want your privacy, security guaranteed, and not tied to third parties, then the decentralized exchange is the most appropriate choice.
In the following, I will review one of the potential decentralization exchange projects, the Injective Protocol.
Why you should choose Injective Protocol?
Although it has several advantages compared to centralized exchange (CEX), a decentralized exchange (DEX) currently also has several problems:
❌ Limited usability
❌ Poor liquidity
❌ High latency
❌ Lack of compelling and diverse product offerings
❌ Censorship prone central points of failure
❌ Permissioned platforms (KYC, geo-blocking)
❌ Regulatory restrictions
The problem that often occurs in DEX today is that the original nature of decentralization is waning. There are boundaries that create bias. DEX usually tends to have slower trading executions and lower liquidity. Therefore, this is not ideal for active traders who want to enter and exit a fairly large position quickly.
That is why Injective Protocol offers very interesting innovations, technology and infrastructure, which will give you a truly decentralized, fast, and secure trading experience. One of the advantages of Injective Protocol is the layer-2 exchange protocol architecture that unlocks the full potential of borderless finance. You can also enjoy various services that support margin trading, derivatives, and futures. Are you ready with this innovation?
1. Injective Protocol Technology and Infrastructure
Injective Protocol consists of several important parts: the Injective Chain, the Injective Exchange, and the Injective Futures platform. This service and technology will provide an interesting trading experience for you.
- Injective Chain
Injective Chain is a layer-2 sidechain and Cosmos Zone connected to Ethereum that functions as a Decentralized Trade Execution Coordinator (TEC). This allows you to transfer and trade Ethereum-based assets in the Injective Chain. For further developments, it will be integrated with Cosmos IBC, so as to bring decentralized inter-chain financial capabilities.
- Injective Exchange
Injective Exchange is really decentralized and has no centralized component. Full control of trade is in your hands. Injective makes everything available openly and free, from the front-end exchange interface, back-end infrastructure, smart contracts, to liquidity reservations. You no longer need technical barriers to run very high-performing exchanges. This unique technology from the Injective network can expand access to DeFi for users throughout the world.
- Futures Platform
Injective Protocol allows users to trade on the derivatives market as desired only with a price feed. Injective futures protocols are arranged in a decentralized peer-to-peer arrangement that supports decentralized sustainable swaps, contracts for difference (CFD), and other derivatives.
All technologies and innovations built aim to take you on a journey to build a new system that is decentralized and without limits. Prepare yourself, mainnet is scheduled to be held in the third quarter of 2020. Don’t worry, Beta testnet and tutorials for developers to try will be released soon. Click here to sign up for the testnet waiting list. FYI, the beta for instant markets is available, check it out injective.exchange.
2. Interesting features of Injective Protocol
- New Decentralized Futures & Derivatives Markets
This feature allows users to enjoy new ways by exchanging futures and derivative products with full support from decentralization. Freedom and privacy are in your hands.
- Integration with more DeFi platforms
Decentralized Finance (DeFi) has become a hot topic these days, so many people want a lot of innovation in this regard. Injective offers a mixture of DeFi and derivatives markets for exceptional trading experience.
- Trading Cross-chain trading
This feature allows you to have many trading options, choose the most attractive and profitable according to your analysis. Injective Protocol supports Ethereum, TrueUSD, Injective, Dai, MKR, with much more to be announced.
3. INJ Token Economics
Injective Protocol is a fully decentralized dex. To maximize its functionality, support effective interaction and trading, the Injective Protocol will launch the INJ. Details about the token are not released yet, the dev team will immediately announce it if all the preparations are complete, please wait for announcements.
In short, INJ will be used for this purpose:
- Proof of stake reward
This offer allows miners to increase mining opportunities to the maximum with the number of coins they have from mining.
- Transaction fee discount
What else is fun besides getting a discount? this is a profitable deal for traders when getting fee discounts using INJ.
- Market maker incentive
Market Maker provides all the liquidity you need to create a profitable market. In the injective protocol exchange, if you place an order then you will get a discount as a liquidity incentive.
- Protocol voting and governance
There is no detailed information about this, so wait for the next complete information. What is clear, this offer provides better opportunities for users for a liquidity solution giving room for more competitive pricing
- Staking incentive
INJ staking is an excellent alternative for users to increase assets, users can increase their ownership in INJ tokens in their respective Injective Protocol exchange accounts. This can be an option for passive income
Injective protocol as a fully decentralized DEX provides many innovations and attractive features for those of you who want to trade quickly and safely. You need to know, Injective Protocol is a promising project. This project is supported by Binance Labs (a subsidiary of Binance). Therefore I am very confident that this project will become a potential DEX in the future.
Disclaimer: This article is not investment advice, just for knowledge and education. Do a thorough independent analysis before making any decision. DWYOR.