DeFi Researcher Raises Concerns About Injective Protocol’s Value: Is INJ Overpriced?
According to a recent report, Injective Protocol’s native cryptocurrency, INJ, has been performing remarkably well, even outperforming major cryptocurrencies like Bitcoin and Ethereum. However, a DeFi researcher has questioned whether the protocol is actually undervalued based on on-chain metrics.
The researcher, Hartvigsen, pointed out that Injective Protocol currently has a relatively low total value locked (TVL) of $11 million and only seven launched protocols on the platform. In comparison, other perpetual futures protocols like Perpetual Protocol have much higher valuations, around $200 to $300 million. This raises doubts about Injective Protocol’s $3.2 billion valuation and calls for further justification.
Hartvigsen compared Injective Protocol to other blockchains like Ethereum and Solana, which have higher trading volumes and on-chain activity. For example, Injective’s daily volume ranges from $5 to $7 million across seven dApps, while Solana processes between $500 and $700 million daily. Ethereum, on the other hand, processes over $1 billion in trading volume.
In response to Hartvigsen’s analysis, a user named yiggit defended Injective Protocol, highlighting the potential of upcoming apps and the project’s roots in the Cosmos ecosystem. The user also pointed out that TVL alone is not sufficient to gauge a project’s potential and that optimism is driven by factors like staking and airdrops.
While the researcher’s assessment raises valid concerns, the price of INJ has continued to rise, reaching new all-time highs. Since mid-October 2023, INJ has surged by 395%, reflecting investor optimism and contributing to a market cap of over $2.7 billion.
As the debate around Injective Protocol’s valuation continues, only time will tell if the project can sustain its current market performance and overcome the challenges raised by the DeFi researcher.