Injective to launch Layer 3 chain on Arbitrum, INJ falls 4%
- Injective is launching a Layer 3 network powered by Arbitrum’s Layer 2 scaling solution technology.
- The DeFi protocol’s plan could attract capital from investors and improve the state of the INJ token in 2024.
- INJ market capitalization shrunk to half of its $4.5 billion peak in 2023.
Injective (INJ) had a market capitalization of close to $4.5 billion at its peak in March 2023. At nearly half its market cap, the DeFi protocol has proposed a solution, likely to reinstate INJ to its former glory through higher relevance and fresh capital injection.
Injective plans to launch a Layer 3 chain on Arbitrum, using its Orbit toolkit that allows developers to build customizable chains.
Injective to launch Layer 3 chain powered by Arbitrum
Injective’s inEVM is compatible with the Ethereum Virtual Machine and connects Ethereum, Solana and Cosmos networks. The solution planned by Injective will use Arbitrum’s Orbit toolkit to customize a Layer 3 chain. The move could likely boost Injective’s importance among market participants, likely driving demand and fresh capital injection to the project.
According to a Cointelegraph report, the integration would offer developers the opportunity to build within the Ethereum Layer 2 ecosystem, with the benefit of Injective’s high speed and relatively low fees, compared to other Layer 2 chains.
The inEVM network (Injective’s proposed Layer 3 chain) will reduce the circulating supply of the INJ token by aggregating and systematically burning a percentage of all protocol fees on a weekly basis.
A reduction in circulating supply is typically considered bullish for an asset, and it could drive gains in INJ price.
At the time of writing, INJ is down 4% on the day. The DeFi token is exchanging hands at $23.68 on Binance.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
