Immutable X (IMX) explained

immutable x

Web3 startups and enterprises have used the Ethereum blockchain to power their decentralized applications and metaverse projects. The rise of blockchain and the growth of users have caused congestion in recent years, resulting in slower transaction speeds and higher gas fees. 

Immutable X, the first Layer 2 for minting and trading NFTs on Ethereum, was created from this challenge. The platform provides a cheaper and more environmentally friendly infrastructure for NFTs while still having the scalability and security that Ethereum provides.

Australian brothers and Forbes 30 under 30 entrepreneurs James and Robie Ferguson launched the project in 2018, along with Alex Connoly. World-renowned companies such as Marvel and Disney use it to power their crypto projects. Several next-generation games such as Gods Unchained and Illuvium are also built on Immutable X.

Its native token, IMX, boasts a $178.7 million market cap and a $75.3 million 24-hour trading volume as of writing. The main use cases for the token include network fees, governance, and staking.

Tokenomics

IMX is the native utility token of the Immutable X protocol. There are 2 million IMX tokens in total, which are distributed by its partner Digital Worlds NFTs in the following areas:

  • 51.74% ecosystem development
  • 25% project development
  • 14.26% private token sale
  • 5% public token sale
  • 4% foundation reserve

To make sure token owners are committed for the long term, tokens will be locked in some of these distribution areas. The tokens will be progressively locked for certain user groups. It also follows a circulating supply schedule to incentivize long-term growth and sustainability.

Use cases

The IMX token currently has three core uses:

  • Fees – users need to pay a 20% protocol fee that must be paid in IMX tokens. Users get the option to pay this fee directly in IMX or have Immutable automatically swap the actual purchase currency for IMX on the open market. That said, you don’t need to hold IMX tokens to be able to transact on the protocol.
  • Staking – you can also commit a certain amount of IMX tokens to the network. Staking rewards will be distributed proportionally to all users who stake IMX. Certain conditions apply for your IMX token to be considered staked.
  • Governance – IMX token holders also earn voting rights via decentralized governance. They can vote on how the token will be allocated, as well as on developer grants and changes in token supply. The more tokens you hold, the greater your voting power.  

Ecosystem 

Immutable X positions itself as a layer-two scaling solution for NFTs on Ethereum. It’s the first-ever protocol to utilize zk-rollups which, coupled with an API abstraction layer, could transform the NFT space. The platform allows the large-scale creation and distribution of ERC-20 and ERC-721 assets while retaining the underlying security of Ethereum. 

This layer-two solution seeks to address Ethereum’s low scalability, illiquidity, slow developer experience, and poor user experience. Users have the added benefit of not having to switch networks when connecting their wallets. That said, the barriers of entry for content creators and smaller developers are lower.

With Immutable X, marketplaces can add their fees, and asset originators can apply a royalty to every NFT they mint. This way, they can receive a fee for every subsequent sale of that asset. This opens up new revenue streams for individual creators and businesses like gaming, encouraging them to continue making those assets more valuable to those who own them.

Where to buy/sell IMX 

If you’re looking to buy IMX tokens to use the Immutable X ecosystem or trade them on secondary marketplaces, you can buy them in most major crypto exchanges. These include AAX, a trusted crypto exchange powered by LSEG Technology’s world-renowned matching engine, as well as Binance, Gate.io, Coinbase Exchange, Huobi Global, and KuCoin.

Future roadmap

Immutable X has recently launched a $500 million fund to enable Web3 gaming adoption at scale. This developer and venture investment fund will be used for building Web3 NFT games and NFT-focused companies that will build on the Immutable X protocol. Ferguson hopes that the next couple of years will see a huge influx of Web3 games, given that established brands and Web2 gaming household names are racing to enter the Web3 market. 

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