DeFi Researcher Questions Injective Protocol’s Appeal: Is INJ Overvalued?

Dalmas Ngetich

1 year ago

3 mins read

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Thor Hartvigsen, a data-driven decentralized finance (DeFi) researcher, is questioning the appeal of Injective Protocol, a layer-1 platform whose creators say is designed to expressly power finance.

As of December 2023, INJ, the native currency of Injective Protocol, is one of the top-performing coins, surpassing Bitcoin (BTC) and Ethereum (ETH).

Is Injective Protocol Undervalued Based On On-Chain Metrics?

Taking to X on December 14, Hartvigsen highlighted the platform’s relatively low total value locked (TVL) of $11 million and the limited number of protocols launched on the platform, currently standing at seven.

Based on the researcher’s analysis, the largest dapp on the layer-1, Helix Protocol, a decentralized exchange (DEX), only manages a daily trading volume of about $7.4 million.

Injective Protocol TVL | Source: DeFiLlama

Hartvigsen states this is significantly lower than other perpetual futures protocols, including the Perpetual Protocol. These competitors, the analyst notes, are valued at around $200 and $300 million based on fully diluted valuation (FDV).

So far, looking at data, there are only seven active protocols on Injective, with Helix managing over 60% of the ecosystem’s TVL, reinforcing its dominance.

If on-chain activity and the number of active protocol leads, Hartvigsen wants answers to irrefutably justify Injective Protocol’s $3.2 billion valuation.

The researcher compares Injective with other blockchains, including Ethereum and Solana. These platforms command relatively higher trading volume and on-chain activity.

Injective Protocol dapps | Source: DeFiLlama

To illustrate, Hartvigsen cites DefiLlama data, which shows that Injective’s volume ranges from $5 to $7 million daily from seven dapps.

On the other hand, Solana, a competing layer-1, presently processes between $500 and $700 million. Meanwhile, Injective Protocol cannot match Ethereum, which processes over $1 billion in trading volume.

INJ Up 395%, Will Prices Continue Rising On Investor Optimism?

In response to Hartvigsen’s analysis, yiggit, a user claiming to be a legal counsel, defended Injective Protocol. The user emphasized that TVL, as the researcher cited, cannot be the sole determinant to gauge a project’s potential.

Yiggit added that Injective Protocol’s potential is rooted in the expected number of upcoming apps. Notably, the legal counsel notes that optimism also stems from the Injective Protocol’s origins in Cosmos. In the Cosmos ecosystem, staking tends to catalyze participation as users seek to receive airdrops.

Still, whether or not the researcher’s assessment is valid depends on time. So far, looking at the INJ price action in the daily chart, the coin has been charting higher, registering new all-time highs.

To illustrate, INJ is up 395% from mid-October 2023, rallying as the broader crypto market recovers. At this valuation, CoinMarketCap data shows that the project has a market cap of over $2.7 billion.

Feature image from Canva, chart from TradingView

Dalmas Ngetich

Dalmas, a seasoned crypto reporter, brings a unique perspective to the industry. His specialization in NFTs, blockchain, DeFi, and blockchain news for NewsBTC, combined with a background in mechanical engineering and over a decade of experience in journalism, has allowed him to craft over 10,000 news and feature articles over the past eight years. His diverse range of topics, including technology, Forex, and finance, reflects his comprehensive understanding of the crypto landscape.

His technical expertise and analytical skills have been recognized and featured by leading news outlets such as Investing.com, CoinTelegraph, Entrepreneur, Forbes, and other authority sites. Notably, he broke key news, including the Ripple and MoneyGram partnership, cementing his position as a thought leader in crypto.
The news exploded. Over 100,000 people devoured this meticulously crafted report, from seasoned investors to curious newcomers. His analysis wasn't just dry facts and figures; it crackled with insight, dissecting the implications of the partnership and its potential impact on the future of finance.

His deep understanding of the financial markets, technological advancements, and blockchain developments has made him a respected voice in the industry.

Dalmas is also the founder of BTC-Pulse, a crypto news site, further demonstrating his commitment to the field. He firmly believes that DeFi and NFTs are here to stay and will continue to drive financial inclusion.

Coming from Nairobi, Kenya, it is easy to see the source of his inspiration: Across Africa, millions lack access to traditional banks. Remote villages, limited documentation, and high minimum balances create insurmountable barriers.

DeFi, not just Maker or Aave, for example, but think of Bitcoin and USDT, cuts out the middleman. Forget banks with their limitations.
Even so, DeFi isn't a magic solution. The continent still struggles with reliable internet access, and educational campaigns highlighting the benefits of this wonderful solution are insufficient. Moreover, even for those interested, understanding DeFi can look like learning a new language.

Dalmas is here to help make the tech easy to understand and digestible, even for beginners.
The story of DeFi in Africa is still being written. Challenges abound, but the promise of a more inclusive financial future is a powerful motivator. With innovation and collaboration, Dalmas firmly believes that DeFi could become the key to unlocking Africa's full economic potential.
This possibility and its immense value motivate Dalmas to continue breaking key DeFi innovations and more across the globe. His engineering background further enhances his ability to deliver well-thought-out pieces that blend technical insight with clear, impactful reporting.

Beyond his professional achievements, Dalmas is deeply passionate about technology and politics. Policies drive adoption, and being at the forefront and keeping up with how they evolve is crucial for the sphere to mature.

When Dalmas is not closely monitoring the latest crypto events, he can be found in nature, exploring the picturesque countryside, and traveling with his family and friends. His love for adventure and discovery perfectly complements his investigative and reporting skills.
You can connect with Dalmas on X: @Dalmas_Ngetich, or contact him on Telegram @Dalmas_Ngetich.

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