Injective Labs announced on Monday, November 8, through its Twitter account, The Injective Canonical Chain is now available. According to the company, Canonical Chain offers unrestricted transfers and trading on the mainnet along with a strong token economy, seamless interoperability, novel products, and the most powerful exchange in the DeFi world.
“The Mainnet Injective Canonical Chain is live! The mainnet update marks the beginning of a new chapter for the entire Injective community, as Canonical Chain ushers in a new era of decentralized finance”, he said in an article posted on his website.
Transfers and trade without restrictions
The company explained that one of the main updates to Canonical Chain is the ability to allow unlimited transfers and exchanges in the Injection Chain. Prior to the upgrade, the Injective ecosystem restricted bridge transfers to the Injective Chain to ensure network security during the final stages of the Canary Chain. This community-driven update is critical to ensuring that new users and institutions on board can overcome any number of assets using the native cross-chain Injective Bridge.
In his view, Injective users played an essential role in the canonical update, helping to test and provide feedback throughout the Canary Chain process. Over $100 million was transferred to the Injection Chain during the Canary phase, even with the restriction that only a maximum of a few thousand dollars could be transferred at a time. Now with the Canonical Chain update, people can freely start using all the functions of Injective Chain; thus, allowing more liquidity and access to the Injective Protocol itself.
Improved INJ token economics: buyback and burn
Similarly, he highlighted that a main tenant of the Canonical Chain update will be the addition of new features that will lead to a much stronger token economy for the INJ itself. The community has expressed their opinion on tokenomics that they believe are an integral part of the growth of the network and have worked to incorporate these tokenomics to improve the proposals. This will allow Injective to have the highest token burn rate in the entire exchange industry.
Every two weeks, 60% of the fees charged in the protocol will undergo a buyback and burn process. It works in the following way:
• Fees charged in Injective are put up for auction (for example: let’s say there is a $100 basket. $50 is in ETH and $50 is in WBTC)
• Users can bid on this basket using INJ (let’s say User A bids $90 and User B bids $95)
• User B will win the offer with $95 and can immediately make a profit of $5 through arbitrage.
• The $95 paid in INJ will be burned immediately
The chain’s first fully integrated VIP rate discount program
In addition, he indicated that the upgrade proposal includes a modular architecture that can allow the chain implementation of a VIP Fare Discount Program. This will be the first fully decentralized VIP Fee Discount Program in the entire crypto industry!
“Essentially, Injective users can pay lower fees on the exchange based on INJ amounts wagered and trading volumes generated. The VIP Fee Schedule will be proposed this month through the Governance Portal so the community can help determine the different fee tiers. If approved, the program can also encourage users to maintain INJ and promote volume on the exchange”, he added.
Liquidity incentive program
In his opinion, another essential feature of the update allows the implementation of a liquidity incentive program in the chain.
If approved, the program will allow users to get fee refunds on every trade, thereby encouraging others to trade on Injective. The community can also implement special discounts in specific markets to promote liquidity. For example, a user proposing a Solana Perpetual marketplace may choose to include a higher rebate level than the entire Injective community can then vote on via the Injective Hub.