Joining the Injective Network as a validator presents several novel and compelling opportunities for staking providers.
Built on top of the Cosmos-SDK, the Injective Chain offers the traditional staking model where validators earn commissions from staking rewards from delegated tokens.
Beyond this tried and tested model, validators can additionally optionally act as exchange service providers and earn 40% of trading fees generated from orders that they source.
While staking rewards are inflationary by nature, Injective’s exchange protocol applies a strong deflationary force where 60% of exchange fees are used to burn the Injective Token through open market buy-back-and-burn operations every 2 weeks. This persistent programmatic deflation results in a magnification of staking rewards, as stakers enjoy a disproportionate growth in both the absolute and relative value of their network stake.
Given the magnitude of this deflationary force grows with the exchange volume on Injective Protocol, stakers directly benefit from the value accrual from the exchange. Stakers who also participate in the network by attracting liquidity through exchange service provision will gain even greater outsized rewards by receiving 40% of trading fees generated. As such, being an exchange provider can be a highly lucrative business opportunity, as crypto derivatives have exploded in popularity amongst retail and institutional traders alike. For existing staking as a service provider in particular, expanding to exchange service provision is a highly synergistic business line, as it enables validators to better serve users through a unified staking/trading experience.