Why Is Injective Protocol (INJ) Pumping? 

YEREVAN (CoinChapter.com) — The price of Layer 1 network Injective Protocol (INJ) has risen considerably. Over the last week, the price has jumped over 40%, reaching an all-time high above the $34 mark on Dec. 15. In the past month alone, INJ price rally accounts for over 120%, having risen from the under $16 it traded on Nov. 17.

At the time of writing, INJ exchanges hands at $30 per token, according to CoinStats charts. 

Early investors in the token are reaping the benefits of their faith in the Injective Protocol. Looking back over the year, the INJ price has increased by about 2,000%. 

Reasons behind the Injective Protocol Rally

Besides institutional backing from industry players such as Binance, Pantera, Jump, and billionaire Mark Cuba, several other factors may be behind the recent surge in Injective Protocol (INJ) price. 

1 Fast and cheap transactions

As the modern Decentralized Finance (DeFi) solution to the world of finance, Injective Protocol offers a fast and affordable option to crypto enthusiasts. 

According to the project’s website, the average time to create a block on the chain is 0.8 seconds. On Ethereum (ETH), creating a block currently takes between 12 and 15 seconds. Meanwhile, on the Bitcoin (BTC) network, the time is above 10 minutes. 

Moreover, the transaction cost of Injective is less than $0.01 even though it processes over 10,000 transactions per second (TPS). 

In comparison, Bitcoin (BTC) network transactions cost nearly $40, with an average TPS of just 7. 

2 Trading Volume and Network Activity 

The recent growth in the INJ price also comes at the heels of strong trading volume and rising network activity. The high trading volume, currently over $300 million, indicates increased liquidity, and investor engagement sustains the price pump. 

Injective Protocol’s fully diluted market cap (FDV) has crossed the $2.9 billion mark. Over 84% of the INJ token’s total 100,000,000 is already in circulation. The project has already burnt around 5.8 million tokens, contributing to its diminishing supply. 

However, the Total Value Locked (TVL) in Injective is about $12 million, according to DeFiLlama. This low figure, compared to its fully diluted market cap (FDV), has raised questions about the organic nature of the INJ price rise. 

According to data from Into The Block, none of the current holders of the INJ token have suffered losses. While 87% are in profits, about 13% are breaking even. Moreover, trader sentiments around the token are mostly bullish.

However, about 95% of the tokens are held by whale wallets (defined as those owing more than 1% of the circulating supply). This is risky as a few huge whales could dump their tokens to cash out profits, sending the INJ price plummeting.

3. AI-Backed Blockchain and Global Adoption 

Over the past few months, there has been a spike in Artificial Intelligence platforms and AI-backed products across industries. Injective’s status as a leading AI-based digital currency in cryptocurrency has contributed to its growing popularity. 

Moreover, Injective has become a platform for advanced defi applications, making it a popular player in the finance sector. The growing adoption among developers and users has made the INJ token an attractive investment. 

4 New Integrations pump INJ price

News of recent integrations has also influenced the INJ price. 

Injective’s partnership with Kujira, a layer one blockchain built on the Cosmos network, has excited the community. Users can now access KUJI, the native token of Kujira, on the various dApps on the Injective Hub. 

In October, Injective announced that it had partnered with Google Cloud’s data exchange platform, CloudHub. That development also cemented the Web3 platform’s place in the future of DeFi. 

“This integration is a major step forward for the Injective ecosystem in continuing to expand its footprint into institutions and traditional finance,” 

Eric Chen, co-founder and CEO of Injective Labs, said at the time. 

The favorable crypto market sentiment, coupled with the growing popularity of AI in the crypto space, has pushed up the INJ price. However, strong trading volumes hiked network activity, and recent developments in the Injective’s ecosystem have also added to the recent pump in the token’s price. 

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