We are delighted to announce that we have entered into a strategic partnership with Injective in order to further our foray into DeFi with a leading derivatives DEX.
Trading systems are the soul of DeFi
In a world with multiple assets, enabling an exchange of assets between owners is a crucial requirement for the existence of a market. Smart contract blockchains enable protocols and businesses to digitize their representation of ownership in the form of tokens. Since blockchains are immutable, unlike stocks or shares, tokens can not be easily seized from its owners providing users with a higher sense of security and sovereignty. However, trading of tokens has traditionally been limited to centralized exchanges making users lose custody of their assets, vulnerable to the exchange’s security policies and any hacks thereof, order book manipulation, downtimes, KYC restrictions etc.
The idea of decentralized exchanges to mitigate the aforementioned issues has existed since the birth of Ethereum. Trading on DEX is censorship-resistant, doesn’t require users to give up custody of their assets and has a high uptime with an open order book. However, order book based DEXes till date have failed to gain traction due to high gas prices and Ethereum’s low throughput limiting trade volumes. This has led to a rise of Automated Market Making (AMM) based DEXes which in turn suffer from slippage and impermanent losses to liquidity providers. Moreover, while an open order book solves the issue of CEXes manipulating orderbooks or selling information of user orders to HFTs (Robinhood), it introduces new problems related to frontrunning and arbitrage.
Injective is a game changer
AMM-based DEXes have gained significant traction but their limitations haunt users each day. The desire to use a DEX that is as good as CEXes in user experience is far from lost. Developing such a system has evidently been a hard problem. Injective, a project founded by Stanford grads and backed by leading VCs such as Pantera and Binance Labs, is at the forefront of such solutions featuring:
- L2 DEX: A Tendermint-based chain that acts like a layer-2 solution for Ethereum circumventing ETH’s scaling limitations.
- VDF: Cutting-edge research in the area of Virtual Delay Functions to prevent frontrunning.
- Order-book based: Makers and takers can place orders like in a CEX augmented by traditional market makers.
And that’s not all! Injective’s smooth but trustless UX features trading of derivatives and synthetic assets (including those of traditional stocks) making it not only a solution to non-custodial trading of crypto assets but stocks as well.
Unparalleled Trading Speeds
The Injective Chain as any other Tendermint chain uses short block intervals. Consequently, it is susceptible to the limitations of the scalability trilemma where increasing block sizes in face of high exchange throughput requirements would place limitations on the size of the validator network thus hindering DEX security and decentralization. Injective’ unique design far surpasses the capabilities of competing DEXes but has further room to grow when compared to the capabilities of CEXes, our common nemesis.
Furthermore, as part of its order matching process, Injective currently routes transactions to the closest Injective node to a trader. Routing transactions to a randomly selected Injective node would increase security against a malicious node intending on carrying out targeted attacks or even a benign node with unintentional downtimes. However, network latencies due to geographical distances place a design restriction here once again.
Marlin’s SDK provides a plug-and-play networking alternative to reduce global communication latencies and increase the throughput of all blockchains with minimal protocol changes. This is especially compelling given that Marlin can seamlessly integrate with the Injective Chain to enable speeds that are not possible in any other DEX today. Moreover, it also provides traders with a low-latency channel to communicate with exchange nodes providing high-frequency trading (HFT) trading like experience in DeFi allowing them to place or revise orders in a matter of milliseconds.
“The team at Marlin and Injective have been close since our incubation days in Binance labs. It is amazing to see just how far we have come over the past year. I am certain that Marlin’s layer 0 tech coupled with Injective’s unparalleled decentralized derivatives exchange will lead to limitless new opportunities for us both moving forward,” said Injective CEO Eric Chen.
Injective can also aid Marlin in expanding its network to a plethora of new users. Users will now have access to new derivative products that interact with the POND token as an underlying, thereby helping to increase the overall utility of POND itself.
"Injective is by far the most innovative DEX being developed bringing bleeding-edge research into practice with layer 2 designs and front-running resistance. With the enormous volumes it is expected to generate from trading stock derivatives, as evidenced in its Solstice testnet, we couldn't have thought of a better project to work with for our foray in DeFi.", Siddhartha, CEO at Marlin
The road forward
2021 has begun to a great start and the DeFi momentum shows no signs of subsiding. We’re optimistic of an increasing number of users being onboarded on to different DeFi products in the year ahead. Injective with its stellar team and technological breakthroughs is well positioned to capture a significant share in this rapidly expanding market.
We’re excited to work with Injective to display Marlin’s capabilities in practice in a way users can relate to the most. Such native Marlin integrations are expected to eliminate the difference between interacting with a DeFi product as opposed to a CeFi venue for users, traders and market makers alike. Our collaboration with Injective is the beginning of a long journey to make DeFi scalable and ready for mass adoption.
About Injective Protocol
Injective Protocol is the first layer-2 decentralized exchange protocol that unlocks the full potential of decentralized derivatives and borderless DeFi. Injective Protocol enables fully decentralized trading without any restrictions, allowing individuals to trade on any derivative market of their choosing. Injective Protocol is backed by a prominent group of stakeholders including Pantera Capital, one of the most renowned venture capital firms in the world, and the leading cryptocurrency exchange, Binance.
To learn more about Injective, check out their social channels below!
Website | Telegram | Discord| Blog | Twitter | Learn | Youtube | Facebook | LinkedIn | Reddit | Instagram | TikTok | Weibo
About Marlin Protocol
Marlin is an open protocol that provides a high-performance programmable network infrastructure for DeFi and Web 3.0. Marlin aims to deliver on the promise of a decentralized web where applications secured via the blockchain are indistinguishable in terms of performance to users accustomed to Web 2.0. Marlin is backed by a prominent group of stakeholders including Electric Capital, Michael Arrington, DHVC, Fenbushi and the leading cryptocurrency exchange, Binance.
Twitter | Telegram Announcements | Telegram Chat | Discord | Website