Injective Protocol is comprised of three principal components:
- Injective Chain
- Layer-2 Derivatives Platform
- Injective Exchange
The Injective Chain is a fully-decentralized sidechain relayer network which serves as a layer-2 derivatives platform, trade execution coordinator (TEC), and decentralized orderbook. The core consensus is Tendermint-based. Smart Contracts
The Injective Chain provides a two-way Ethereum peg-zone for Ether and ERC-20 tokens to be transferred to the Injective Chain as well as an EVM-compatible execution environment for DeFi applications. The peg-zone is based on Peggy and the EVM execution is based on Ethermint. Trade Execution Coordinator
The Injective Trade Execution Coordinator (TEC) is a decentralized coordinator implementation based on the 0x 3.0 Coordinator specification. The Injective TEC safeguards trades from front-running using Verifiable Delay Functions and enables lower-latency trading through soft-cancellations. EVM Execution Environment
The Injective Chain EVM is a geth based EVM implemented as a custom Cosmos-SDK module (akin to Ethermint).
The user and developer experience for deploying and interacting with contracts on the Injective EVM will be the same, and all of the Ethereum RPC methods will be supported on the Injective EVM. Decentralized Orderbook
Injective's Decentralized Orderbook is a fully decentralized 0x-based orderbook enabling sidechain order relay with on-chain settlement - a decentralized implementation of the traditionally centralized off-chain order relay used by nearly all central limit order book decentralized exchanges.
Nodes of the Injective Chain host a decentralized, censorship-resistant orderbook which stores and relays orders. Injective API
Injective API nodes have two purposes: 1) providing transaction relay services and 2) serving as a data layer for the protocol.
The Injective API supports the Injective Futures API, the 0x Standard Relayer API version 3 (SRAv3), and the 0x Standard Coordinator API. The specification for this API can be found at api.injective.dev.
The API also provides abstractions for protocol actions including staking, voting and governance. Layer-2 Derivatives Platform
The Injective Chain supports building generalized derivatives/DeFi applications through two avenues: the Injective Futures Protocol and general smart contracts. Injective Futures Protocol
The Injective Futures Protocol is deployed on the Injective Chain as a Cosmos-SDK based application. This protocol enables traders to create, enter into, and execute decentralized perpetual swap contracts and CFDs on any arbitrary market. Ethereum ⇆ Injective Peg Zone
Both ETH and ERC-20 tokens can be transferred between Ethereum and the Injective Chain through the Injective Peg Zone. The process to do so follows the standard flow as defined by Peggy. Ethereum → Injective Chain
The following is the underlying process involved in transferring ETH/ERC-20 tokens from Ethereum to the Injective Chain. Validators witness the locking of Ethereum/ERC20 assets and sign a data package containing information about the lock, which is then relayed to the Injective chain and witnessed by the EthBridge module. Once a quorum of validators have confirmed that the transaction's information is valid, the funds are released by the Oracle module and transferred to the intended recipient's address. In this way, Ethereum assets can be transferred to Cosmos-SDK based blockchains.
This process is abstracted away from the end user, who simply needs to transfer their ETH/ERC-20 to the Injective Peg Zone (IPZ) contract.