Injective Protocol, a DeFi-focused platform using Cosmos technology, is gaining popularity looking at gas fee revenues to be distributed to validators in the third quarter of 2024.
While the INJ, the protocol’s native currency, is under pressure and cooling after rallying to $52 early this year, the recent development is a huge confidence booster. Looking at trends, this could indicate more users switching to Injective, a net positive for INJ in the coming sessions.
Injective generates more revenue than the BNB chain, Avalanche
According to CryptoRank factsInjective Protocol generated $4 million in gas fee revenue. Any transfer or smart contract implementation incurs a gas fee, just like any other ledger such as Bitcoin or Solana. This fee is distributed to the winning validator or miner as an incentive to operate a node.
With $4 million in revenue, Injective created more than the BNB Chain, one of the largest blockchains by market cap, and Avalanche, a top 20 network, according to CoinMarketCap. These platforms generated $3.4 million and $2.1 million, respectively.
At this level, Injective also exceeded what some of the top Ethereum Layer-2 solutions such as Arbitrum, Optimism and Blast generated during this period. By comparison, Arbitrum, despite being the largest and managing over $13.2 billion, is according to L2Beat.
Ethereum, Tron, Solana and Base generated more revenue than Injective. Ethereum moved $159 million to its validators from July through September, while Tron and Solana moved more than $200 million combined.
The increase in revenue, mainly from Tron, a scalable platform, is due to the meme coin activity on its network following the launch of SunPump in August. At the same time, Solana also benefited from meme coins and an increase in decentralized exchange (DEX) volume during this period.
Will INJ Rise to $50?
It remains to be seen whether the recovery of DeFi activity will simultaneously boost Injective and its total value (TVL). As of October 8, the Protocol manages more than $40 million DeFiLlama data. At the same time, the platform has processed more than 1 billion onchain transactions.
At the beginning of October, Injective announced the launch of Injective 3.0. This upgrade allows the protocol to change its tokenomics and make INJ deflationary. This activation removes some INJ from circulation, making it scarcer.
Currently, INJ is in a descending channel and finds support at $15. While Q1 2024 buyers are still in the picture, the token is down 60% from March highs. A break above this descending channel could take the coin to a high of around $52 in 2024.
Feature image from iStock, chart from TradingView