Bittime -How to stake Injective (INJ) ? Injective (INJ) is a blockchain designed specifically for decentralized finance (DeFi). The platform offers a variety of innovative features, including a state-of-the-art decentralized exchange (DEX), a crypto derivatives market, and a robust smart contract ecosystem. One way to participate in the Injective ecosystem and earn profits is through staking native INJ tokens.
What is Injective (INJ)?
INJ is the native token of Injective which is used to perform various important functions on the platform, such as:
Staking
Users can temporarily lock INJs to contribute to network security. In return for this service, validators and stakers are both rewarded in the form of epoch rewards and trading fees.
Gas Tokens
INJ is used to pay network fees. Every transaction processed by the network requires a small fee to be paid. However, trading on Injective Pro does not require gas fees because the fees are paid by the other party. Other transactions on Injective such as claims, delegation, auctions, underwriting and unbonding require a minimum fee of 0.0002 INJ.
Governance
INJ is used to vote on governance proposals on the network. Only staked tokens are eligible for use in governance voting. The amount of voting power is measured based on the number of stakes. Unlike many other networks, as a delegator, you can also participate directly in governance, instead of handing over your vote to validators.
Collateral for Derivatives
INJ tokens can also be used as a stablecoin alternative to provide collateral for margin trading and Injective derivatives market use. Additionally, in certain futures markets, INJ can be used for collateral and staking insurance pools, allowing stakers to earn interest on their locked liquidity provider (LP) tokens.
Developer Incentives
40% of fees generated by users on dApps built on Injective are allocated directly to incentivize new developers building on Injective, thereby attracting more developers to the Injective ecosystem.
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What Consensus Algorithm Does Injective Network (INJ) Use ?
Injective is powered by Tendermint BFT. Tendermint BFT is a Byzantine Fault Tolerant (BFT) consensus engine developed by Tendermint. It offers instant finality, is horizontally scalable, and is secure against bad actors. Tendermint BFT is also open-source, meaning anyone can check out and use the code. Additionally, Tendermint BFT is easy to set up and use, allowing developers to build distributed applications quickly and easily.
The active validator set consists of the 50 highest ranked validators based on staked tokens, where 1 validator is randomly selected to propose a block with 66% of the other active validators required to prove the block to become final. The higher the stake a validator has, the more likely they are to be selected.
What is Injective Tokenomics (INJ)?
The initial supply of INJ is 100,000,000 tokens and will increase over time through block rewards. INJ's inflation target is 7% in the initial stage and will decrease to 2% over time. Gradually, the total supply of INJ may become lower than the initial supply due to the deflation mechanism.
60% of exchange fees will undergo an on-chain buy-back-and-burn process where the entire exchange fee pool will be auctioned off to the highest bidder in exchange for INJ. The INJ proceeds from this auction are then burned, thereby reducing the total INJ supply. Total supply is expected to be completed in January 2024.
Here is INJ's initial token distribution:
- 9% allocated to Binance Launchpad Sale
- 6% is allocated to Seed investors
- 16.67% is allocated to Private Sale investors
- 20% is allocated to the team
- 2% is allocated to Advisors
- 36.33% is allocated for Ecosystem development
- 10% is allocated for Community growth
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What are the Risks of Staking Injective (INJ)?
While we strive to make staking as safe and transparent as possible, it is important to consider the factors that may influence whether a particular staking option is suitable for you. Some risks to be aware of include:
- Slashing Risk: When delegating to a validator, there is a risk of partial slashing if the validator misbehaves. This can occur if a validator double signs, which can result in a cut of up to 5% of staked tokens
- Unbonding Risk: When staking INJ tokens, there is a lockup period of 21 days. This means investors will not be able to sell their tokens immediately, but will have to wait 21 days after initiating unbonding before they can be traded again. This is something to keep in mind when deciding to stake, as the crypto asset market is very volatile. Consider keeping funds liquid if you do not intend to hold INJ long term.
- Exiting the Active Set: The risk of validators being slashed or falling out of the top 50 may result in loss of rewards. It is important to check validator status frequently to ensure they are active, not in jail, and not increasing commission fees.
- Protocol Security Risk: There is an inherent risk that the protocol may contain unknown bugs, this risk applies not only to staking but also investing in INJ.
How to Stake Injective (INJ)
To earn yield from your INJ, you can lend it to a custodian provider or via a Defi lending protocol, run your own validator, or delegate your tokens to a validator of your choice.
For the best security and control over your funds, we recommend using Ledger Hardware Wallet. To delegate your tokens, you must ensure the tokens are stored in your Ledger or Metamask, and then follow these steps:
- Go to Injective Staking Hub and connect your wallet.
- Bridge your ERC-20 INJ tokens to receive native INJ. To do this, open the Bridge page in the left pane of the Hub. Please note that it may take up to 4 minutes for your balance to reflect on Injective Chain after a transaction is confirmed on Ethereum.
- Go to the 'Staking' Page by selecting the tab in the left panel of the Hub.
- Select a validator from the list on the page. Check out our FAQ on how to choose a validator if you're not sure who to delegate to. Note that you can delegate to more than one validator.
- Once you have selected a validator, click 'Delegate Now' and sign the transaction.
Conclusion
Staking Injective (INJ) is a great way to earn passive income and support the Injective network. By following the guide above, you can start staking INJ and profit from your participation in the fast-growing Injective DeFi ecosystem.
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DISCLAIMER: This article is informational in nature and is not an offer or solicitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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