The use cases intended for INJ include but are not limited to: protocol governance, exchange fee value capture, derivative collateralization, liquidity mining, and staking. Further details regarding each of these use cases can be found below.
- Protocol Governance: The INJ token can be used to govern various components of Injective's sidechain including the futures protocol, exchange parameters and protocol upgrades via a DAO structure.
- Exchange Fee Value Capture: After the relayer reward distribution, the exchange fee will undergo an on-chain buy-back-and-burn event to accrue value for INJ.
- Collateral Backing for Derivatives: INJ will be utilized as an alternative to stablecoins as margin and collateral for Injective's derivatives markets. In some futures markets, INJ can also be used for collateral backing or insurance pool staking where stakers can earn interest on their locked tokens.
- Exchange Participation Incentives: The foundation plans to incorporate a liquidity mining scheme and distribute a fixed number of INJ tokens daily weighted by the liquidity each network participant provides.
- Tendermint-based Proof-of-Stake (PoS) Security: To ensure the security of Injective's sidechain, Injective will incentivize nodes to stake INJ and participate in the sidechain's network consensus with block rewards.