Binance Backed Layer-2 DEX, Injective Protocol, Launches Solstice Testnet
Injective Protocol, the Binance backed cross-chain DeFi derivatives trading platform, is launching its testnet according to a publication on TechCrunch yesterday. This milestone comes as a significant step in the DeFi derivative market where action has been picking up in recent months; Injective Protocol plans to bridge the existing gap between chains so that derivative traders can operate freely across multiple decentralized exchanges.
This initiative allows DeFi derivative traders to operate on Ethereum and Cosmos blockchain networks' likes without being limited to a particular chain. Injective Protocol leverages the Tendermint-based Proof-of-Stake (PoS) consensus to power an ecosystem where traders can engage in cross-chain derivatives trading. The project enjoys a $3 million funding from Binance and other prominent crypto investors, who include Pantera Capital & Hashed.
Pantera Capital has successfully existed in crypto, having invested in heavyweights like Bitstamp, Kik, and Blockfolio. A partner at the firm, Paul Veradittakit, praised the Injective Protocol cross-chain DEX derivatives exchange model;
“Injective’s Solstice testnet trades and feels like a state of the art derivatives exchange, but it’s actually entirely supported by a fully decentralized infrastructure.”
Notably, this project has been under the wraps for around two years as the team validated it with sizeable institutional traders, market makers, and funds. The co-founder and CEO, Eric Chen, previously worked in a blockchain-oriented fund where his role spun around cryptographic research. So far, Injective Protocol has already established partnerships with leading blockchain firms like Frontier, Ramp DeFi, and Elrond.
Meanwhile, DeFi operations continue to experience the increased activity as more participants join the nascent crypto niche. DEX volumes went up by almost 70% during the summer DeFi craze, a trend that is unlikely to reverse in favor of centralized crypto exchanges. DeFi innovations like Injective Protocol tout solutions to the underlying CeFi challenges include exchange hacks, exit scams, and front running.