Injective: Transforming DeFi one innovation at a time

Wisdom Oguzie
6 min readFeb 25, 2024

As we delve deeper into the nuanced comparisons between traditional finance and DeFi, Traditional finance, akin to a lawyer who often uses ten words when one would suffice, is characterized by its convoluted processes and lack of accessibility. In contrast, DeFi has emerged as the affable and welcoming host of the financial world, setting the stage for inclusivity and accessibility in financial discourse. Don’t worry I will get to the point already!

In recent times, Defi has taken centre stage and challenged the status quo of traditional finance, and I dare say improving on it. DeFi fosters financial inclusion, transparency, and innovative solutions that resonate with the ever-changing demands of a dynamic and diverse global community.

What are the advantages DeFi has over traditional finance?

Accessibility for all and to all: With traditional finance, access is limited and often requires physical presence, which can be very very stressful for users, It relies on a centralized banking system with stringent requirements. Defi has broken these barriers down, offering financial services to anyone with an internet connection. Also, cross-border transactions in a traditional setting usually involve high fees and lengthy processing times, leaving you stressed even before the process starts. With DeFi, borders are old-fashioned, as it leverages the borderless nature of the blockchain and facilitates cost-effective global transactions. Decentralized transactions are fast, cheap, and easy, and it makes you wonder why this wasn’t always a thing; I sure could have used this a long time ago but it is better late than never.

Bureaucracy Reduction: Traditional finance is mired in bureaucracy and seemingly endless paperwork. Imagine needing mountains of documents just to make a simple transaction, get a loan, or even manage your account. Traditional finance is bogged down by manual verification, making everything slow and frustrating.

DeFi cuts through the red tape. Instead of endless paperwork, DeFi uses smart contracts. Think of them like automatic agreements stored on a secure, public ledger (blockchain). When certain conditions are met (like sending payment), the contract executes itself. No more waiting weeks for approvals, and no more middlemen taking a cut!

DeFi is all about innovation. Traditional finance can be regarded to as the past technology, relying on outdated systems. While DeFi, on the other hand, leverages the power of blockchain technology. This constant innovation leads to exciting new financial tools, apps, and solutions that bring to light the future of finance.

Security. Traditional finance, being centralized, can be vulnerable to hacks and manipulation. Plus, it’s often not very transparent. DeFi uses blockchain’s security features to make transactions secure and verifiable. Smart contracts, once deployed, run exactly as intended, eliminating the risk of tampering. This transparency and security are what DeFi brings to the table, offering a level of trust that traditional finance often struggles with. With Defi tracking your funds is even easier than tracking that Amazon package!

Passive Reward: With DeFi you get different offers and ways to earn passive income through staking, lending, and yield farming. These aren’t opportunities you can find with traditional finance, which often requires a lot of money upfront or saved in your account before you see any real rewards.

However, DeFi isn’t perfect. It’s still a young technology facing some challenges, like handling a high volume of users (scalability), making different DeFi platforms work together (interoperability), and keeping transaction fees and speeds low. Security is also an ongoing concern.

This is where Injective comes in. While not claiming to be the one-stop solution for DeFi, Injective is actively tackling many of these challenges that have been plaguing the industry.

Injective has continuously stood out with its innovative solutions that empower developers and the average DeFi user to build a more inclusive financial landscape. This is why, amongst many, it is often referred to as “the blockchain built for finance.”

Scalability: The scalability of a blockchain is just like having plan for a 100 users and you see 1000 users but they say, “Hey, no worries, I can handle a hundred individuals and even more.” Now most blockchain networks have faced issues of scalability due to high transaction volumes and limited processing capacity as more and more people adopt DeFI, and this has led to slow transaction confirmation times and high gas fees during periods of network congestion. Injective solves this issue through the incorporation of layer 2 scaling solutions. It leverages Optimistic Rollups, a layer 2 scaling solution that has been designed to enhance scalability. Optimistic rollups simply “bundle” or “roll up” numerous transactions off-chain and a cryptographic proof is generated. This proof is then posted on the primary Ethereum chain, enabling anyone to validate the rollup. The term “optimistic” is employed because the rollup is assumed to be valid initially. In the event of any potentially invalid transactions, users have the opportunity to challenge them within a specified dispute period. Once this dispute period concludes, the rollup’s state is considered final on the main chain. This strategic use of optimistic rollups enables Injective to achieve substantial scalability improvements compared to a purely on-chain solution.

Transaction speed and fees: Blockchain networks, particularly those using Proof-of-Work (PoW) consensus algorithms, had transaction throughput constraints, resulting in slower confirmation times during peak usage. Delays in transaction processing hurting user experience and restricting DeFi application scalability. Injective uses Tendermint-based PoS consensus and this has allowed injective to maintain an ultra-fast network. With a transaction speed of 25,000 TPS, Injective significantly outperforms other blockchains in terms of transaction speed, And users can interact with the network without having to worry about exorbitant transaction fees and also delays in transactions.

Interoperability: Injective places a strong emphasis on interoperability, facilitating seamless communication not only with other IBC chains but also, through Wormhole, extending its interoperability to chains beyond the Cosmos ecosystem, including Ethereum, Solana, Klaytn, and more. Injection also leverages CosmWasm-based smart contracts and Electro Chains to integrate Ethereum and Solana-based smart contracts. With inEVM and inSVM roll-up solutions, developers from Ethereum and Solana ecosystems can seamlessly deploy their dApps on Injective. This cross-chain interoperability enhances platform versatility and promotes a more interconnected and accessible DeFi ecosystem for a broader audience of users.

How can we truly boast of diversity in DeFi if interactions between blockchains are not smooth and efficient?

Security: In my opinion, a blockchain is nothing if it’s not secure. As a user, you wouldn’t want to interact with a blockchain that isn’t secured or prone to hacks. Security is a critical issue in DeFi, and there have been instances of smart contract vulnerabilities, hacks, and exploits. Injective places a significant emphasis on security, and measures have been taken to secure the network. What measures, you ask?

Injective utilizes the tender mint-based Proof-of-Stake (PoS) consensus to secure the blockchain network, and much like the typical PoS consensus, it utilizes validators who have to stake their $INJ (the native token of Injective). In turn, they are rewarded for securing the network. Tendermint-based PoS goes further by incorporating Byzantine Fault Tolerance (BFT), ensuring a higher level of security and reliability. Read more on Tendermint here

Regular security audits, decentralization, and proactive risk mitigation further enhance Injective’s commitment to a secure, decentralized platform.

With the way the defi landscape is going and Injective remains at the forefront. Injective is here to prove that Defi is the solution to your financial needs and with its innovative technology, it helps empower users to make better transactions also it proves that a blockchain can be fast, cheap and scalable. Since its mainnet Injecyive has never experienced a halt time, no matter the amount of transactions thrown at it, it has stood the test of time

About Injective

Injective is a lightning-fast interoperable layer one blockchain optimized for building the premier Web3 finance applications. Injective provides developers with powerful plug-and-play modules for creating unmatched dApps. INJ is the native asset that powers Injective and its rapidly growing ecosystem. Injective is incubated by Binance and is backed by prominent investors such as Jump Crypto, Pantera and Mark Cuban.

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Wisdom Oguzie