Signs of Recovery in the Injective Ecosystem: Increased Capital Inflow, but Sustainability in Doubt

Recently, the Injective public chain has attracted market attention again. Data shows that the net inflow of funds into this chain in the past 30 days is about $142 million, ranking second among all public chains, second only to Ethereum. This phenomenon is accompanied by a significant increase in on-chain fees, active users, and token trading volume.

However, in-depth analysis reveals that this net inflow primarily stems from large capital inflows, rather than overall active capital movement. In fact, Injective's pure capital inflow ranks only around tenth in horizontal comparisons among public chains, with its outstanding performance mainly attributed to extremely low capital outflows during the same period.

It is noteworthy that 98.5% of the capital inflow was completed through the Peggy cross-chain bridge. Market analysis firm Keyrock pointed out that this large-scale capital inflow was mainly triggered by the launch of the institutional-grade yield platform Upshift on Injective. The annualized yield of Upshift's treasury on Injective is as high as 30%, which may be the main reason for attracting funds.

However, Upshift has a vault cap of $5 million on Injective, which cannot fully accommodate this inflow of funds. Therefore, the funds that could not participate in the vault investment may flow out again in the short term.

In addition to capital inflow, the Injective ecosystem has also undergone some significant changes recently. On April 22, the Lyora mainnet was officially launched, introducing dynamic fee structures and intelligent memory pool technology optimizations aimed at improving network performance. Furthermore, Injective launched the oracle framework iAssets for RWA, and based on this framework, it launched on-chain foreign exchange markets for the Euro and Pound Sterling.

As an established public chain, Injective originally centered around the narrative of a decentralized derivatives exchange. However, the current trading volume of Injective's derivatives still has a significant gap compared to emerging platforms. This may be one of the reasons why Injective is shifting towards the direction of combining with RWA.

From an ecological development perspective, this transformation seems to have had a certain effect. On May 22, the derivatives trading volume of Injective reached a peak of 1.97 billion USD, showing a recent overall upward trend. The daily active users surged from 6,300 addresses in February to 47,900, an increase of about 7.6 times.

However, despite the significant growth in daily active users, the TVL of Injective has not seen a noticeable change, continuously declining since March 2024, and currently stands at only $26.33 million. This indicates that DeFi projects on Injective still lack sufficient appeal for funds.

In terms of economics, Injective's governance token INJ has a market capitalization of approximately $1.26 billion, ranking 82nd. Although it has rebounded 144% from the low in April, it is still 76% away from its all-time high market capitalization.

Injective has recently attracted well-known institutions such as Republic, Google Cloud, and Deutsche Telekom MMS to join the ranks of validators and has launched AI-related products. Overall, Injective is actively seizing new narratives such as AI and RWA for transformation and has indeed achieved certain growth in the past few months. However, in terms of scale, there is still a significant gap compared to mainstream public chains.

The ecological transformation and revival of Injective is still in its early stages. The influx of funds triggered by Upshift resembles a significant market sentiment test and a demonstration of ecological potential, rather than a fundamental shift in the landscape. Whether its strategic tilt towards RWA can truly open up differentiated competitive advantages and transform into sustained ecological prosperity and value capture still requires overcoming numerous challenges and undergoing long-term market tests.

The short-term data rebound is either a fleeting moment or a positive signal in a long recovery journey; time will provide the final answer. For Injective, the real test is just beginning.