Thor Hartvigsen, a data-driven decentralized finance (DeFi) researcher, is questioning the appeal of Injective Protocol, a layer-1 platform whose creators say is designed to expressly power finance.
As of December 2023, INJ, the native currency of Injective Protocol, is one of the top-performing coins, surpassing Bitcoin (BTC) and Ethereum (ETH).
Is Injective Protocol Undervalued Based On On-Chain Metrics?
Taking to X on December 14, Hartvigsen highlighted the platform’s relatively low total value locked (TVL) of $11 million and the limited number of protocols launched on the platform, currently standing at seven.
Based on the researcher’s analysis, the largest dapp on the layer-1, Helix Protocol, a decentralized exchange (DEX), only manages a daily trading volume of about $7.4 million.
Hartvigsen states this is significantly lower than other perpetual futures protocols, including the Perpetual Protocol. These competitors, the analyst notes, are valued at around $200 and $300 million based on fully diluted valuation (FDV).
So far, looking at data, there are only seven active protocols on Injective, with Helix managing over 60% of the ecosystem’s TVL, reinforcing its dominance.
If on-chain activity and the number of active protocol leads, Hartvigsen wants answers to irrefutably justify Injective Protocol’s $3.2 billion valuation.
The researcher compares Injective with other blockchains, including Ethereum and Solana. These platforms command relatively higher trading volume and on-chain activity.
To illustrate, Hartvigsen cites DefiLlama data, which shows that Injective’s volume ranges from $5 to $7 million daily from seven dapps.
On the other hand, Solana, a competing layer-1, presently processes between $500 and $700 million. Meanwhile, Injective Protocol cannot match Ethereum, which processes over $1 billion in trading volume.
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In response to Hartvigsen’s analysis, yiggit, a user claiming to be a legal counsel, defended Injective Protocol. The user emphasized that TVL, as the researcher cited, cannot be the sole determinant to gauge a project’s potential.
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Yiggit added that Injective Protocol’s potential is rooted in the expected number of upcoming apps. Notably,…
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