The reason why Injective is considered a successful example of a "purpose-specific Practical Blockchain" | Four Pillars

## Table of Contents

| | | --- | | * 1. Background – Focus on this year's achievements of Injective

• 1.1 Use Cases of RWA Module

• 1.1.2 BUIDL Index
• 1.1.3 Integration of USDY and USDM
• 1.1.4 Chain-specific Tokenized RWA Rank 3

• 1.2 Use Cases of the Exchange Module

• 1.2.1 2024 Election Futures Market

• 1.3 Other Integrations

• 1.3.1 Strategic partnership with Mercuryo for fiat payment integration
• 1.3.2 INJ ETP

• The Importance of Differentiation Strategies in the Era of Blockspace Oversupply |

In a recent article titled "Will the Era of Purpose-Specific Blockchains Arrive?", I discussed the necessity and importance of blockchain infrastructure optimized for specific use cases and industries.

As the blockchain market grows, it is believed that more specialized infrastructure will be required for complex applications, and an examination of the transition from general-purpose blockchains to purpose-specific ones has been conducted.

This paper focuses on the design methodology of purpose-specific blockchains, using Injective as a case study that has specialized in the financial industry for many years.

Injective has realized improvements in transaction processing speed and reduced fees through enhancements to the Cosmos SDK, under the vision of being a "blockchain built for finance." Additionally, it aims to differentiate itself as a finance-specific infrastructure through the development of the Exchange Module that provides integrated liquidity and the RWA (real-world asset) module.

However, infrastructure development alone is not sufficient for the realization of a truly purpose-specific blockchain. Real-world applications that utilize that infrastructure are essential.

This article provides a detailed analysis of Injective's finance-focused infrastructure and its specific implementation examples, considering how purpose-specific blockchains may impact the future development of the ecosystem.

1. Background – Achievements of Injective this year

1.1 RWA Module Use Cases

1.1.2 BUIDL Index

The tokenized index of the BlackRock BUIDL fund recently introduced by Injective is the first perpetual futures market that tracks the token supply of the fund rather than traditional price tracking. This method allows for a direct reflection of the actual scale fluctuations of the fund.

Users can invest in assets that track the BUIDL fund in real-time through the RWA-exclusive oracle jointly developed by Injective and Stork, allowing them to utilize long and short positions and leverage options according to market outlooks. This creates an investment environment with 24/7 access to tokenized assets such as U.S. Treasury securities.

In index operations, the average price of the fund (Mark Price) is used as a benchmark, and the one-hour weighted average price (TWAP) that responds to supply fluctuations helps to suppress short-term volatility. In this mechanism, Injective's RWA module plays a central role.

In particular, the RWA-specific oracle introduced in the Altaris mainnet upgrade provides accurate and tamper-proof data feeds for tokenized assets, supporting the overall reliability of the system.

The biggest change brought about by the introduction of the RWA module is the dramatic improvement in the barriers to entry for investing in the BUIDL fund. The traditional minimum investment amount of 5 million dollars has now been reduced, allowing investments in the BUIDL Index perpetual futures market starting from as little as 1 dollar, achieving the democratization of investment opportunities.

1.1.3 Integration of USDY and USDM

USDY is a tokenized bond backed by short-term U.S. Treasury securities and demand deposit accounts, combining the stability and yield of USD (U.S. Dollar) denominated assets. USDM, as the first permissionless yield-bearing stablecoin backed by U.S. Treasury securities, offers an annual interest rate of 5% at launch.

This integration is realized by Injective's RWA module, creating an environment where institutional investors and individual users can deploy new tokenized products using customized rules and parameters.

1.1.4 Chain-specific tokenized RWA

These RWA module use cases position Injective as the third chain in the tokenized RWA space, following Ethereum and Polygon. However, unlike the top two chains, Injective differentiates itself by providing financial-specific infrastructure, indicating further growth potential in this area.

1.2 Use Case of Exchange Module

1.2.1 2024 Election Futures Market

While Injective's RWA module is gaining attention, the most actively used is actually the Exchange module. Helix, the largest decentralized exchange in the Injective ecosystem, is a prime example of effectively utilizing this module.

Helix is notable for opening a perpetual options market related to the 2024 U.S. presidential election, using the Polymarket election betting market as the underlying asset instead of traditional cryptocurrencies.

Key features of the system:

• Perpetual contract with no expiration
• USDT-denominated settlement
• Supports long and short positions with up to 3x leverage
• Using the dedicated oracle feed provided by Stork, the price stability is ensured by the 6-hour weighted average price (TWAP) of Polymarket's mid price.

After the election, the market will be closed by the governance proposal, and open positions will be forcibly liquidated at the oracle final price. IN THE 2024 ELECTION PERP, TRUMPWIN IS THE UNDERLYING ASSET, AND PAYMENTS ARE SET AT $1 IN THE EVENT OF TRUMP'S VICTORY AND $0 IN THE EVENT OF A DEFEAT.

This initiative demonstrates the feasibility of DeFi implementations of various financial products based on real-world events, showcasing how Injective rapidly responds to trends and utilizes the Exchange module to create innovative financial products.

1.3 Other Integrations

1.3.1 Strategic partnership with Mercuryo for fiat payment integration

Injective is introducing various infrastructures that go beyond direct use cases of the module. One example is the on-ramp infrastructure from fiat to cryptocurrency made possible through collaboration with Mercuryo.

Mercuryo is known as a payment solution for Web3 applications, and this integration allows users to purchase INJ tokens directly using the Injective bridge.

Users can buy INJ using a variety of payment methods, including Visa, Mastercard, Apple Pay, Google Pay, and bank transfers. The system supports more than 25 fiat currencies, including USD, EUR, JPY, GBP, CAD, CHF, and KRW. This has greatly simplified the crypto onboarding process and is an important achievement in bridging the traditional finance and blockchain worlds.

As a result, access to the Injective ecosystem has been significantly improved, providing a smoother on-ramp experience for both new and existing users. This development has streamlined the entry process into the Injective ecosystem, making it more user-friendly and accessible for a larger number of users.

1.3.2 INJ ETP

First, I would like to talk about the INJ ETP product. As I briefly mentioned earlier, Injective added an RWA (Real World Asset) module through the Volan update in January this year, creating an environment where institutions can easily develop "permissioned products" on Injective. This initiative is the first of its kind for a public blockchain.

In fact, since then, Injective has been developing customized infrastructure solutions for traditional financial institutions, which allows them to easily adopt blockchain technology while maintaining the decentralized characteristics of public blockchains. These efforts seem to be reflected in the ETP products currently.

ETP stands for "Exchange Traded Product," and in South Korea, it is also referred to as "Listed Index Product." Simply put, an ETP is a product that is listed on an exchange and tracks the value fluctuations of the underlying assets.

Recently, Injective Network made a big splash with the launch of an ETP called AINJ, issued by management company 21Shares. The ETP uses Injective's token INJ as its underlying asset, and investors can also earn staking rewards through AINJ and enjoy Injective growth as it is. In addition, it is unique in that it can be traded on the stock market as an ETP.

2. Summary – The Importance of Differentiation Strategies in the Era of Excess Supply in the Blockchain Space

As mentioned earlier, Injective's slogan "Blockchain built for finance" is not just a catchphrase. It actively utilizes plug-and-play modules, providing liquidity for 1) DeFi protocol integrations and constructing RWA tokenization infrastructure on public blockchains by 2) institutional investors. Fast transaction processing and low fees are also important factors.

However, simply building infrastructure does not make it an excellent purpose-built blockchain. There needs to be use cases that actually utilize that infrastructure. Injective understands this point and is actively creating practical examples that leverage its own infrastructure.

This is why I consider Injective to be the most exemplary case of a purpose-built blockchain. Future purpose-built blockchains will require not only the construction of purpose-fit infrastructure but also the implementation of use cases that maximize the utilization of that infrastructure. I believe this is an essential factor for establishing the unique identity of the chain.

The blockchain industry has currently entered a "rich block space" state, with various infrastructure projects providing builders with extensive block space. As a result, players offering customized block space are attracting market attention. This is also the reason why I am interested in purpose-built blockchains and paying attention to Injective.