Injective Protocol Exchange Full Review
BINANCE Labs Backed Project with a New Standard for Decentralized Exchange
Fast, Secure, and Fully Decentralized Trading
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Introduction:
The Importance of Digital Currency Marketing
Cryptocurrencies are an emerging market that have become important with the advent of digital currencies such as Bitcoin and Ethereum. Most cryptocurrencies, also called "crypto" for short, use blockchain technology. Cryptocurrencies are different from fiat currencies. These digital currencies are decentralized assets that, unlike Fiat currencies, are not controlled by the regulatory authority or the central bank. The potential of this area for changing financial outlook is undeniable. In fact, there are many business and investment opportunities behind it. Most digital currencies are based on blockchain technology. This technology has many advantages and applications for customer-centric models, food supply chains and advanced cyber security protocols. Digital currency trading is fundamentally different from trading in more traditional markets such as Forex. Because they are new assets that have the least impact on market stimuli.
Digital currency exchange:
To trade any particular commodity, you have to go to that particular place, that is, you have to go to the gold market to buy gold, and you have to go to the stock market to buy stocks so that you can buy that commodity. One of the safest ways to buy and sell digital currency is to do so through a digital currency exchange. In the rest of this article, we'll take a look at what digital currency exchanges are and what kind of that is available and then introduce Injective Protocol.
The way digital currency exchanges work is that people buy their currency and then store it in their account. The user can then purchase or sell goods and services through their account. Over the years, a number of Bitcoin and currency cryptocurrencies have sprung up in various countries, some of which are considered exchanges. In addition to the role of money changers, some of them work directly with business owners or shopping sites, in which case the services of the exchanges will not be available to the general public, and these facilities will only be available to certain countries. There are three different types of cryptocurrency exchanges:
• Centralised exchanges (CEX)
• Decentralised exchanges (DEX)
• Hybrids
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Centralized Exchange
Centralized exchanges are a type of online trading platform used to buy and sell digital currencies. Currently, most cryptocurrency traders and investors use centralized exchange services. Given that most digital currencies are decentralized, the use of the term centralized exchange may be misleading to some. So what exactly is the concept of centralized exchange, and why are these exchanges so important in the world of cryptocurrency?
Here, the central concept is that there must be a third party or person to help and monitor the transactions. Traders trust this third party to buy and sell as well as manage their assets. Like a bank that people trust to keep their capital. One of the reasons for the emergence of banks is to ensure the security and supervision of people's assets, because individuals alone cannot provide these conditions for their capital. Centralized exchanges have also been set up for currency-like operations in the cryptocurrency sector. Anyone can easily trade by trusting an exchange, in addition to being able to consider the exchange as their trading partner and borrow money from it to trade margin.
Given that every digital currency is kept in its own digital wallet or hardware, there is a great risk that hundreds of thousands of dollars will be lost from people's capital by forgetting their wallet password. This problem is solved in centralized exchanges, and all the capital in an account that supports a large number of digital currencies will be protected by one person.
Decentralized exchange
After digital currency prices rose sharply in 2017, many traders and investors shifted some of their capital from the forex market and stock exchanges to the cryptocurrency market. This increase in liquidity in the digital currency market has led hackers to take action and attack a number of centralized exchanges where millions of dollars were traded, and to steal investors' assets. As a result, a new generation of money changers has emerged, known as decentralized exchanges, with high security against cyberattacks and hackers.
The reason for the hacking of centralized exchanges is that the private key of the users 'wallet is kept in the central server of the exchange, but if a professional hacker can infiltrate this server, he will have access to all databases and users' wallet information. With hackers accessing users' private keys, they can easily transfer all of their wallet inventory to one of their secure accounts.
In decentralized exchanges, however, no currency or private key is stored on a central server. Therefore, it is very difficult for hackers to access people's passwords. However, one of the problems of decentralized exchange offices is the impossibility of tracking and determining tax laws for this type of exchange. In this regard, John McAfee has published an article stating that decentralized exchanges can be a serious problem for government agencies. He believes that we must choose between the anonymity of individuals and the protection of the space used against hacking. However, investors who are concerned about the theft of their digital assets have been more receptive to trading in decentralized exchanges.
Hybrid cryptocurrency exchange
A hybrid cryptocurrency exchange is a combination – as the name implies – of both centralized and decentralized exchanges.
The difference between centralized and decentralized exchanges
Centralized exchanges are used to conduct transactions in the digital currency market. These types of exchanges have the ability to convert Fiat currencies (common currencies) into digital currencies and vice versa, and they can be used to convert two digital currencies into each other. While centralized exchanges seem to cover all digital currency exchanges, another type of exchange has been created that provides many users with security and services.
Decentralized exchanges are a new generation of trading platforms. In this type of exchange, a completely secure and reliable environment is provided for users and there is no longer a need for a third party to perform transactions. In addition, the structure of decentralized platforms is designed in such a way that all transactions are done automatically using smart contracts, and assets are never blocked or transferred. There are fundamental differences between centralized and decentralized exchanges.
As mentioned, the first difference is in the presence or absence of a third party to conduct transactions. Currently, centralized exchanges have become more popular than non-centralized exchanges due to the provision of more services and analytical facilities. But experts are optimistic that in the near future, significant features will be added to decentralized exchanges and will be welcomed by traders. However, most large cryptocurrency exchanges have the potential to convert digital currencies into fiat currencies. This is possible due to the direct access of these exchanges to the digital currency market. Given that most digital currency investors are unfamiliar with the field, the most common use of centralized exchanges is to convert digital currencies into fiat currencies.
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The advantages of decentralized exchanges
Most of the strengths of decentralized exchanges stem from their distributed architecture and the lack of a single control center.
Security:
Decentralized exchanges do not store user assets. Therefore, neither hacker attacks nor the total collapse of the exchange can lead to a loss of funds. The absence of a single entry point, through which one could gain access to all assets and data, complicates work for hackers and makes an attack meaningless in itself, which radically distinguishes decentralized exchanges from centralized ones that are regularly hacked.
Low risk of manipulation:
Another advantage of this kind of service is the minimal risk of price manipulation or falsification of trade volumes, due to the absence of a central structure that is interested in manipulation inside the exchange.
There are no personal accounts on the decentralized exchange, no verification is required and there is no need to even specify an email address, so personal data of users cannot be stolen. This structure makes services based on a distributed registry more anonymous than exchanges that require personal authentication for the purposes of Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance.
Independence from regulators:
The distributed architecture protects the exchange from interference by local or international authorities. In the case of a centralized structures, following regulations means that the exchange service can be either completely blocked or partially, in which case the service becomes limited in terms of location or options.
Accessibility for different projects:
In contrast to its centralized brother, a decentralized exchange makes it possible not only to place orders for existing cryptocurrencies, but also to create new ones directly in the system. This allows startup projects to provide minimal liquidity, without having to pay high fees for placement on major platforms.
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Injective Protocol
“The Injective Protocol opens up the full potential of borderless financial support by supporting marginal transactions, derivatives and futures”
Injective Protocol, the name of the BINANCE Labs support project, is a new-generation DEX and the first 2-layer resistant exchange protocol platform that allows users to trade on Ethereum blockchain with Proof of Elapsed Time in addition to VDF (Verified Delay Function) to handle current issues of DEXs. VDF’s are functions that require a moderate amount of sequential computation to evaluate, but once a solution is found, it is easy for anyone to verify that it is correct. Think of VDF’s as a time delay imposed on the output of some pseudorandom generator. This delay prevents malicious actors from influencing the output of the pseudorandom generator, since all inputs will be finalized before anyone can finish computing the VDF.
In response to the current widespread problems of centralized exchanges and DEX, Injective Protocol has proposed a "three axes" global solution: Injective chain, Injective derivatives protocol and Injective trading platform.
The Injective chain is based on Cosmos zone and is a decentralized protocol released at Layer 2 layer to provide a high-speed Ethereum decentralized transaction experience. And will use the Cosmos IBC protocol, which not only realizes cross-chain transactions, but also eliminates advance transactions, and is extremely flexible and scalable. In addition, the Injective chain supports token staking, and also provides technical support for providing more services such as staking in the future.
Derivatives agreement is an important "weapon" of Injective. This is an open protocol that supports the development of open derivative markets. It is also the world's first fully decentralized peer-to-peer futures and perpetual swap agreement, supporting simple market access. According to the team, compared with other products of the same type, Injective is the fastest and completely decentralized derivatives trading platform in the DeFi market without gas fees.
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Based on the Injective chain, its trading platform has also achieved a fully open source design and is a completely decentralized network. But at the same time it also provides a market maker-friendly API interface, the interface is close to the current mainstream exchange interface, the user experience is no different from the centralized exchange. However, in terms of management system, the Injective trading platform draws on the centralized exchange's audit system, which is modeled. Listing is required for audit, but it is based on community management, not words. In addition, the Injective trading platform has introduced the world's top market makers and strong liquidity incentives to ensure the liquidity of the trading platform.
Injective's three-axe axe breaks the various disadvantages of DEX on the market. Some DEXs on the market are not real DEXs. They may not be fully open source, and some have high fees. They are not friendly to market makers and traders. Lack of good scalability, low throughput, low transaction turnover rate, etc.
In order to maintain the healthy operation of the Injective ecosystem, Injective will also issue platform tokens, but unlike most centralized platforms, the income of the Injective platform will return 100% to the holders, and the entire process will be carried out on the chain , Be transparent and accept the supervision of all users.
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Injective protocol Concept
The main concept of the injective protocol is that users should provide "proof of elapsed time" by solving verifiable delay functions (VDF’s). The injective protocol is designed for decentralized exchanges, in which order “takers” may have to deal with front-running frequently. To better understand the idea of Injective Protocol, below i will briefly introduce the two concepts of ”Proof of Elapsed Time (PoET)” & “Front-Running”:
Proof of Elapsed Time (PoET)
Proof of Elapsed Time (PoET) is an efficient alternative to proof of work (PoW). In the case of PoW, an expensive computation is required to create a candidate block and propagate the message to other nodes in the network. It is expensive because it incurs a cost for the electricity utilized by the special mining hardware (designed specifically to calculate the hash-value) in order to mine the next block in the blockchain. The node that is able to find the hash-value first becomes the new leader and gets a reward in the form of Bitcoins.
However, in PoET, a separate random timer that operates independently at every node determines whether or not that node creates the new block of the blockchain and gets the reward. This randomization also ensures that every node is equally likely to be the winner.
At a high level, proof-of-elapsed-time follows this strategy:
-Each participant in the blockchain network waits a random amount of time.
-The first participant to finish waiting gets to be leader for the new block.
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Front-Running
In the days when stocks were actually traded on paper, on the floor of the stock exchange, front-running referred to the practice of running to the front of the line when you knew some big trade was coming (clever name, right?). For instance, if you knew someone was about to buy a huge amount of some stock, you could buy it before them, then sell it at a higher market price after their large buy went through.
On Ethereum the concept isn’t much different. Front-runners wait for transactions in the mempool (the pool of unconfirmed transactions 8) that give them some useful information, like a big, juicy buy order on some decentralized exchange. They then broadcast their own transaction, which also goes to the mempool, but they try to make sure that it makes it into the blockchain before the other transaction in order to profit. However, the scope of Ethereum front-running is wider than just manipulating order books on exchanges.
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Key features and benefits for the ecosystem
* Unlike many other decentralized exchanges, the Injective Protocol is 100% decentralized. It takes back control of funds and trade through peer-to-peer client. The orders are posted and matched in real time, on the side-chain. The Injective Protocol is decentralized end-to-end, from order discovery to settlement.
* Cryptographically secure by using Verifiable Delay Functions (VDFs) and selective delay. The Injective Protocol blends edge cryptography and decentralized finance, to achieve trading experience with ultimate security, being the only DEX that secures all trades against any attack using both VDFs and selective delays. The clients are protected by the network from hacks, trade manipulations, exit scams, and front-running.
* Modern and mature platform. The world of margin trading or tokens and derivatives is fully opened to users through the modern interface. The full potential is unlocked by the decentralized lending platform, which allows Injective traders to access assets with leverage. The platform will support ETH, TrueUSD, Injective, DAI, MKR and many more.
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Team
With regards to the team project injective protocol, then there is a very strong core team.
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For more information, please visit the link below:
Website: https://injectiveprotocol.com/
Whitepaper: https://docsend.com/view/zdj4n2d
Reddit: https://www.reddit.com/r/injective/
Twitter: https://www.twitter.com/@InjectiveLabs
Telegram: https://t.me/joininjective
Linkedin: https://www.linkedin.com/company/injective-protocol/
Autor
Bitcointalk Username: rezaanahviII
Bitcointalk URL: No links to other forumsindex.php?action=profile;u=2661939
Main Resources
https://injectiveprotocol.com/
https://docsend.com/view/zdj4n2d
https://www.educative.io/edpresso/proof-of-elapsed-time-consensus-algorithm
https://forum.openzeppelin.com/t/protecting-against-front-running-and-transaction-reordering/1314
https://www.publish0x.com/hodl-the-universe/the-new-generation-dex-injective-protocol-xqomzgq
WOOTRADE Announces Strategic Partnership with Injective Protocol
WOOTRADE Announces Strategic Partnership with Injective Protocol. DeFi Futures Exchange Injective Protocol Works Together with WOOTRADE to Increase DeFi Adoption
Note: WOOTRADE is a digital asset liquidity pool that provides the best trading execution for institutional clients–– at zero fees!
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