Injera Overview
Overview
Injera is a synthetic dollar protocol built on Injective that provides a crypto-native solution for money not reliant on traditional banking system infrastructure, alongside a globally accessible dollar denominated instrument. Injera's synthetic dollar, USDi, provides the crypto-native, scalable solution for money achieved in a 2-pronged approach:
Delta-neutral hedging of large cap crypto assets such as Ethereum, Bitcoin, Injective
Issuance through Collateralized Debt Positions (CDP) enabled through the Injera money market
USDi is fully-backed by both on-chain and off-chain approaches and is free to compose throughout CeFi & DeFi.
USDi peg stability is supported through the use of delta hedging derivatives positions against protocol-held collateral. The peg is also maintained through ensuring positions on the CDP are overcollateralized.
Yields are derived from various sources which include: staked assets (e.g., staked INJ), to the extent used as backing assets. This includes funding & basis spread from perpetual and futures markets. And lastly, borrowing spreads from the CDP money market, to create the first omni-yield onchain crypto-native solution for money.
Features of Injera
Launch Features
Users are currently able to:
Permissionlessly Acquire USDi on approved DEXes such as DojoSwap, OR to borrow USDi from the Injera money market
Direct Mint USDi. Deposit accepted backing assets and receive USDi
Direct Redeem USDi. Burn USDi & receive backing assets
Stake & Unstake USDi. Receive a share of protocol yield.
Understanding Delta
It is important to understand Delta as we are using Delta hedging strategy on Injera. This strategy reduces the directional risk associated with the price movements of an underlying asset. The hedge is achieved through the use of options. Ultimately, the objective is to reach a delta neutral state, offsetting the risk on the portfolio or option.
How Delta Hedging Works
Generally, the most common method of delta hedging is when an investor purchases or sells options and offsets the risk by respectively buying or selling an equal amount of stock or ETFs. Other strategies would include trading volatility through delta neutral trading.
Considering that delta hedging is meant to reduce the volatility of the option’s price relative to the movement in the underlying asset’s price, it constantly requires rebalancing to ensure the risk is hedged. Delta hedging is known to be a complex strategy used by institutional investors or large investment companies.
Last updated