Injective In 2023: Stake Growth Dynamics, On-chain Data Analysis And Main Network Metrics

Key Insights & Takeaways

• December 2023 marked Injective's most productive month in total stake growth, witnessing a 6.5% increase over the month (equivalent to +2,9 million INJ stake). The overall staked amount on Injective surged from 30,3 million INJ in December 2022 to 47,8 million INJ in December 2023.
• In 2023, there was an enhancement in the balance of total INJ stake distribution among validators. Over the year, the stake percentage held by the top 10 validators decreased by 10%, dropping from 60.2% to 50.8%.
• Injective has achieved a more equitable stake distribution, not only among validators but also between whales and retail users. Over the year, the stake percentage held by delegators that stake more than 100,000 INJ decreased by 5.43%, dropping from 66.1% to 60.68%. At the same time, there was a 0.11% increase in the number of delegators in the 10-100K group, a 1.19% rise in the 2-10K group, a 1% increase in the 0.5-2K group, and a 3.14% growth in the <0.5K group.
• The conclusion of Q4 2023 showcased remarkable growth in Injective's number of delegators, surpassing 100,000 by December 20, 2023. Overall, the total number of INJ delegators surged from 6,584 (January 2023) to 149,440 (December 2023).
• During 2023, a total of 12,880 unique Injective delegators engaged in the process of redelegating between validators, leading to a total redelegation amount of 16,8 million INJ. Notably, most of these redelegations, accounting for 76.35%, were directed towards validators offering a lower fee. In 2023, there was also a substantial increase in active wallet addresses on Injective, rising from 14,000 to over 290,000.
• The overall proposal pass rate on Injective stands at 96.91%. Throughout 2023, the proposal pass rate reached 100%, with 86 proposals being approved and none rejected.
• Regarding developer engagement, the most dynamic periods on Injective during 2023 were between February and May and between November and December, with notable peaks observed in February and May. This heightened activity can be attributed, in part, to the Injective Global Hackathon and the Injective x Google Cloud Illuminate Hackathon , which coincided with the surges in activity.
• In August 2023, Injective unveiled its most considerable tokenomics upgrade, INJ 2.0, with the potential to substantially boost the amount of burned INJ tokens, fostering a more robust on-chain economy powered by INJ.
• In 2023, Injective blockchain got even faster and is now processing blocks in less than a second. This further strengthens its positioning as the fastest L1 blockchain in the industry, specifically tailored for building financial applications.

Methodology

This report examines the Injective blockchain using specific data practices and sources as outlined below:

• On-chain Data: We collected extensive data from the Injective blockchain, including raw transaction data and metrics like staking, transactions, and inflation.
• Data Preparation: We used tools such as Python and PowerBI to thoroughly clean and format the data. Also, we carefully merged inputs from diverse sources to facilitate comprehensive analysis.
• Data Analysis: We conducted a thorough analysis using graphs, charts, statistical measures, and hypothesis testing to discern patterns in staking, transactions, and other metrics.
• Interpretation: Using our expertise, we interpreted the findings, discussed their implications, compared them, and offered suggestions for further investigation and potential actions.

Essential definitions

The key terms in this report are the following:

• Total stake – the number of staked INJ tokens.
• Validators – node operators within Injective responsible for securing the blockchain by validating transactions and generating new blocks.
• Delegators – INJ holders who have delegated their tokens to validators for staking, aiming to receive staking rewards.
• APR – the annual percentage rate, denoting the blockchain's annualized percentage revenue for staking.

Injective total stake growth dynamic in 2023

December was the most productive month of 2023 for Injective regarding the total stake growth, with a 6.5% stake increase over the month (or +2,9 million INJ staked in December).

Another period marked by a rapid increase in the total stake was in spring 2023, demonstrating a consistent upward trend compared to February and culminating in a +2,3 million INJ stake increase in May 2023. This growth can be attributed, in particular, to the launch of the Injective Ambassador program, which likely positively impacted the ecosystem's visibility and user inflow, with over 200,000 ambassadors joining the program.

The total staked amount on Injective increased from 30,3 million INJ in December 2022 to 47,8 million INJ in December 2023.

Stake distribution among top validators

Notably, the total INJ stake distribution among validators became more balanced in 2023. Throughout the year, the stake percentage held by the top 10 validators (a portion of the total stake) decreased by 10%, declining from 60.2% to 50.8%. 

A potential contributing factor might be the introduction of a minimum commission rate of 5%, which led to the exclusion of 0% commission offerings amongst validators and subsequently slowed down a significantly larger influx of users to such validators (when compared to validators with higher fee) within the top 10.

A more evenly distributed stake is pivotal for fostering fair governance, enhancing the decentralization of the chain, and creating a more equal competitive environment.

For comparison:

• Stats at the beginning of Q1 2023:
• Total stake: 30,62M INJ
• Top-10 validators' stake: 18,46M INJ (60.2% of the total stake)

• Stats at the end of Q4 2023:
• Total stake: 47,82M INJ
• Top-10 validators’ stake: 24,38M INJ  (50.88% of the total stake)

Delegators distribution by stake

Injective has also become more balanced regarding stake distribution between whales and smaller stake holders.

Throughout the year, the stake percentage held by the holders from the >100K group (delegators that stake more than 100,000 INJ) decreased by 5.43%, declining from 66.1% to 60.68%, while the stake amount delegated by this group increased from 20,9M to 28,2M. 

At the same time, the number of holders from the groups 10-100K, 2-10K, 0.5-2K, and <0.5K increased by 0.11%, 1.19%, 1% and 3.14% respectively.

This confirms the overall increase in whales' stake against a backdrop of a decrease in its percentage relative to smaller stakers, signalling the inflow of new retail users in the ecosystem and leading to better decentralization within the network.

INJ delegators change over the year (comparing the change from January 2023 to December 2023)

•  >100K: -5.43% 
• 10-100K: +0.11% 
• 2-10K: +1.19% 
• 0.5-2K: +1%
• <0.5K: +3.14% 

Delegators distribution by stake in INJ in January 2023:

• >100K: 66.11% (sum of total delegation – 20 955 732 INJ)
• 10-100K: 18.75% (sum of total delegation – 5 941 876 INJ)
• 2-10K: 6.69% (sum of total delegation – 2 120 930 INJ)
• 0.5-2K: 4.27% (sum of total delegation – 1 354 389 INJ)
• <0.5K: 4.17% (sum of total delegation – 1 323 307 INJ)

Delegators distribution by stake in INJ in December 2023:

• >100K: 60.68% (sum of total delegation – 28 225 306 INJ)
• 10-100K: 18.86% (sum of total delegation – 8 773 002 INJ)
• 2-10K: 7.88% (sum of total delegation – 3 665 638 INJ)
• 0.5-2K: 5.27% (sum of total delegation – 2 453 506 INJ)
• <0.5K: 7.31% (sum of total delegation – 3 400 444 INJ)

Delegators distribution among top validators

The end of Q4 2023 was impressive for Injective regarding the delegators' growth: the number of INJ delegators skyrocketed, surpassing 100,000 as of December 20.

In total, the number of INJ delegators increased from 6,584 in January 2023 to 149,440 in December 2023.

Total stake vs. unique delegators' growth dynamic

At the end of November, the INJ's total staked amount soared by more than 1 million in a matter of days, even as the daily inflow of new wallets and delegators remained average. 

This signaled the entrance of new influential players.

A substantial increase in delegators on Injective was observed during the first weeks of December: between December 7 and 16, the number of INJ delegators more than doubled, rising from 33,182 to 84,374. This further underscores the effectiveness of staking for generating passive income while enhancing the network's security.

Redelegations overview

In 2023, 12,880 unique Injective delegators participated in redelegations between validators, resulting in a total redelegation amount of 16,8M INJ. 

Most redelegations, specifically 76.35%, were directed towards validators offering a lower fee.

Injective governance overview

The overall proposal pass rate on Injective is 96.91%. In 2023, the proposal pass rate was 100%, with 86 proposals passed and none rejected.

Top 3 type-specific trends observed among all governance proposals on Injective:

1. Spot Market Launch

2. Trading Reward Pending Points (Trade & Earn rewards points adjustment)

3. Batch Community Pool Spend

Governance stats:

• Proposals count
• total: 275
• in 2023: 86 
• Proposal pass rate
• total: 96.91%
• in 2023: 100%
• Passed proposals 
• total: 244
• in 2023: 86
• Frequency (average number of proposals submitted to the network in a month excluding ones in a deposit period): 8.15
• Diversity (the degree of diversity in opinions): 13.67%

Source: Mintscan

Injective dev activity

Regarding developer activity, the most active periods on Injective in 2023 were from February to May and November to December, with peaks in activity observed in February and May.

This can be partly attributed to the Injective Global Hackathon and the Injective x Google Cloud Illuminate Hackathon, which coincided with the activity spikes.

Source: Mintscan

Trading volume on Injective

The INJ 2.0 announcement in August coincided with a notable surge in Injective's daily trading volume. INJ 2.0 is the most significant Injective tokenomics upgrade that unlocked a new realm of utility for INJ tokens and enabled the burning of more substantial amounts of INJ, fostering a more robust on-chain economy driven by INJ.

Source: Injective Trading Analytics

Another surge in trading volume on Injective was fueled by the launch of the pre-launch futures of Helix DEX, initiated with the release of the Celestia TIA token markets. This is evident when observing the spike in daily trading volume following the announcement of the pre-launch futures on October 18, 2023.

Source: Injective Trading Analytics

The cumulative trading volume on Injective amounted to $15.8 billion in 2023.

Liquid staking on Injective

On April 3, 2023, Injective launched liquid staking with Stride for its native token INJ.

Through stINJ, a liquid-staked representation of INJ, users gained access to more benefits with the Injective ecosystem. Consequently, liquid staking extends the range of use cases and utility for the native INJ token as well.

The Total Value Locked (TVL) has steadily increased from the launch day until the end of the year, and as of December 31, 2023, the TVL (INJ) on Stride reached $2,892,465.

Source: Stride Analytics

New wallets inflow

New wallets flowing into Injective showed a consistent upward trend in the last weeks of December.

December 17-18 stood out, marked by a notable surge and culminating in a new all-time high of 21,436 daily new INJ wallets on December 18. 

Throughout 2023, the number of active wallet addresses on Injective experienced a significant surge, escalating from 14,000 to over 290,000.

Source: Smart Stake Analytics

2023 in numbers, integrations, and main implementations

2023 was a year of crucial internal development and implementations:

• In August 2023, Injective released INJ 2.0, its most considerable tokenomics upgrade. INJ 2.0 enabled all Injective dApps to participate in the burn auction without any limitations on the amount of fees to be burned. This leads to a potentially significant increase in the number of burned INJ tokens and, consequently, to a more robust on-chain economy driven by INJ thanks to a captured value from all Injective dApps.

  Background for understanding the Injective burn mechanism and INJ 2.0, in particular: Injective collects 60% of the trading fees paid by users.

  An auction takes place every week, enabling the community to utilize INJ for bidding on the accumulated basket of trading fees collected by Injective during that week.

  Upon conclusion of the auction, the winning bid (in INJ) is burned, and the winning bidder obtains the entire basket of assets. This mechanism introduces deflationary pressure on the INJ token supply.

  With INJ 2.0, a diverse array of dApps, including lending platforms, NFT marketplaces, prediction applications, and more, now have the option to contribute to the Injective auction burn. 

  Moreover, it allows protocols to decide the specific amount they wish to allocate to the auction, with the flexibility to designate up to 100% of their collected fees to the auction basket. The increased involvement of various dApps not only enhances potential rewards in the auction but also facilitates the burning of larger amounts of INJ tokens.

• In 2023, Injective blockchain got even faster and is now processing blocks in under a second, strengthening its positioning as the fastest L1 blockchain in the industry, optimized for building financial applications.


• 2023 was also a remarkable year of extending the interoperability of Injective with the release of inEVM and inSVM rollup environments, expanding the opportunities for developers and increasing Injective's compatibility across Ethereum, Cosmos, and Solana. 

• In 2023, Injective integrated with Babylon, Pyth, Stride, Celer, Astar Network, Polkadot, Polygon, Side Protocol, Klaytn, and Kava, to further expand interoperability.


• To further support builders on Injective and expand their opportunities, Injective has extended its ecosystem by integrating with Google Cloud, Tencent Cloud, 1RPC, Espresso Systems, etc., and has held two hackathons: the Injective Global Virtual Hackathon with up to 1,000,000 in prizes and seed funding and the Injective x Google Cloud Illuminate Hackathon supported by Google Cloud and co-hosted with DoraHacks.


• In 2023, 30+ dApps have been built on Injective already, with a number of major dApp deployments coming up. Notable DeFi applications include but not limited to Helix, Mito, DojoSwap, Astroport, White Whale, Black Panther, and Levana Protocol. In addition, Injective welcomed its first and now leading NFT marketplace, Talis Protocol, launched on Mainnet in June 2023. The platform observed the creation of over 265,000 NFTs, resulting in a volume of more than 400,000 INJ.


• In 2023, the total transaction count on Injective soared from 140 million (at the end of 2022) to over 390 million.

Injective Prospects for 2024

In 2023, Injective laid a robust groundwork for its ecosystem's continued expansion and development. Through technological implementations aimed at enhancing interoperability, the upcoming year, 2024, is poised to witness the launch of innovative financial applications on Injective, drawing in a diverse community of developers and users.

Thriving ecosystem dApps like Helix , Talis Protocol, and Mito suggest emerging high-demand markets, promising projects, and increased trading volumes. Additionally, the anticipated ecosystem growth in 2024 is expected to broaden Injective's capabilities further, facilitating the growth of a diverse range of financial applications.

These developments will likely bolster institutional and enterprise adoption, attract new developers and users, and solidify Injective's position as a pioneering force in blockchain space tailored for building financial applications.