Immutable X (IMX)

Immutable X is a platform built on top of the Ethereum blockchain that is specifically designed for trading NFTs (non-fungible tokens).

It aims to solve some of the problems that have plagued NFT trading on Ethereum, such as high gas fees, slow transaction speeds, and scalability issues.

In this beginner’s guide, let’s explore what Immutable X is, how it works, its advantages and disadvantages, and its potential future.

What is Immutable X?

Immutable X is specifically designed for NFTs, which are unique digital assets that represent ownership of something, like a piece of art, a collectible, or an in-game item.

Immutable X makes it easier and cheaper to create, buy, sell, and trade NFTs.

It is what’s known as a “layer-2” scaling solution. This means it sits on top of the main Ethereum blockchain to help it handle more transactions.

Think of it like an express lane on a highway that helps to reduce congestion and speed up traffic flow.

Immutable X does this by bundling many transactions together and processing them off-chain, then sending the results back to the main Ethereum blockchain.

This allows for much faster and cheaper transactions, as well as increased scalability.

The project has built its platform, token, and marketplace so that there will be lower entry barriers for NFT creators, developers, and traders.

NFT-related projects get Ethereum’s security features, the speed and cost benefits of scaling through ZK-rollups, and SDKs and APIs that would allow developers to build projects in hours.

Meanwhile, those who mint and trade NFTs pay zero gas fees, keep the private keys of their assets and enjoy the liquidity of a shared global order book.

How does Immutable X work?

Immutable X uses a scaling solution called Zero-Knowledge Rollups (ZK-rollups), which bundles thousands of off-chain transactions, creates a “cryptographic proof” that all trades are valid, then sends the batch as a smart contract on Ethereum’s blockchain for confirmation.

Immutable X’s use of rollups, ZK-STARKs as cryptographic proof, and REST APIs enable the network to process 9,000 NFT transfers, trades, and mints per second.

The protocol has also built its own marketplace as well as an intermediate layer called LINK to allow Immutable X to support third-party NFT marketplaces and share a global order book.

Not only will NFT owners and traders have access to increased liquidity, but they can also manage their assets using their existing Ethereum wallets.

What is the IMX token?

Immutable X uses a technology called zk-rollups (zero-knowledge rollups) in combination with “Validium” to achieve its scalability and low fees.

Imagine a train carrying a large number of passengers to a destination. Instead of checking each passenger’s ticket individually, the conductor can simply verify that the train itself is authorized to travel on that route.

This is similar to how zk-rollups work. They bundle hundreds or even thousands of transactions together off-chain and generate a “validity proof” for those transactions.

This proof is then submitted to the main Ethereum blockchain, which can verify the transactions without having to process them individually.

This process significantly reduces the amount of data that needs to be stored on the Ethereum blockchain, which in turn reduces gas fees and increases transaction speeds.

Validium further enhances scalability by storing some transaction data off-chain, like having some passengers take a separate, faster train that still arrives at the same destination.

Immutable X has implemented a unique fee structure to streamline transactions within its ecosystem. Developers utilizing the platform are subject to a 2% fee in IMX tokens.

The IMX Token

IMX is the native utility token of the Immutable X platform.

Immutable X’s IMX token supports ERC-20 and ERC-721 standards and has three core functions:

IMX is used to pay fees. Immutable X doesn’t charge ETH gas fees, but it does have platform fees. The company takes a 2% fee on all primary asset sales and a 2% fee on every NFT trade.

Additionally, 20% of Immutable’s protocol fee must be paid in IMX tokens. This fee can either be paid directly in IMX tokens, or Immutable will automatically swap the purchase currency (e.g. ETH) for IMX on the open market.

IMX is also used for staking activities. A portion of the protocol fees goes to a “staking rewards pool” that’s distributed among IMX stakers.

You’re considered to be actively staking if you’re (a) holding IMX on L1 or L2 wallets, (b) holding an NFT or have executed a trade on Immutable X in the last 30 days, or (c) voted on a governance proposal in the last 30 days.

Lastly, IMX token holders can vote on token-related proposals. Immutable isn’t a DAO, though, so final decisions will still be made by company head honchos.

IMX is available on major crypto exchanges and is compatible with Metamask and Trust Wallet for self-custody.

Here’s a summary of how IMX is used:

  • Fees: IMX can be used to pay transaction fees on the Immutable X platform.
  • Staking: Users can stake IMX tokens to earn rewards and contribute to the security of the network.
  • Governance: IMX holders can vote on proposals that affect the future of the Immutable X protocol.
  • Earning IMX: Users can earn IMX by completing actions which benefit the protocol such as trading. Every rewarded action will earn a certain amount of points and then you receive your IMX rewards.

Token Metrics:

  • Holder Addresses: Approximately 93,486 unique addresses.
  • Circulating Supply: Approximately 1.72 billion IMX tokens.
  • Maximum Supply: 2 billion IMX tokens.

Advantages of Immutable X

Immutable X offers several advantages over trading NFTs directly on the Ethereum blockchain:

  • Zero gas fees: Immutable X allows users to mint and trade NFTs without paying any gas fees. This is a major advantage, as gas fees on Ethereum can be very high, especially during times of network congestion. Think of it like being able to drive on a toll-free highway instead of having to pay every time you use the road.
  • Fast transaction speeds: Transactions on Immutable X are confirmed almost instantly, thanks to its layer-2 architecture. This is a significant improvement over Ethereum, where transactions can sometimes take minutes or even hours to confirm. It’s like sending an email instead of a traditional letter – you get confirmation that your message has been delivered much faster.
  • High scalability: Immutable X can handle thousands of transactions per second, which is far more than the Ethereum blockchain can handle on its own. This makes it well-suited for applications that require high throughput, such as blockchain games and NFT marketplaces. Imagine a stadium that can accommodate a massive number of people without getting overcrowded – that’s what scalability means for Immutable X.
  • Security: Immutable X inherits the security of the Ethereum blockchain, which is one of the most secure blockchains in the world. This means that users’ assets are protected by the same robust security measures that protect Ethereum. It’s like keeping your valuables in a highly secure vault that has a proven track record of protecting its contents.
  • User-friendly: Immutable X is designed to be user-friendly, even for people who are new to NFTs. It offers a simple and intuitive interface for creating, buying, selling, and trading NFTs. Think of it like using a well-designed app that guides you through the process step-by-step.
  • Carbon-neutral: Immutable X is committed to being carbon-neutral. It achieves this by offsetting its carbon emissions through various carbon credit programs. This means that using Immutable X has a minimal environmental impact, which is becoming increasingly important in the world of technology.
  • Immutable X Link: Immutable X Link allows users to use their existing Ethereum wallets on the Immutable X platform. This means you don’t have to create a new wallet to use Immutable X, which enhances user experience and security. It’s like being able to use your existing credit card at a new store instead of having to apply for a new one.
  • Ethical and Sustainable: Immutable X offers a more ethical and sustainable approach to NFTs compared to other blockchains. This is because it is carbon-neutral and focuses on reducing its environmental impact. It’s like choosing to buy products from a company that is committed to sustainability and ethical practices.

Disadvantages of Immutable X

While Immutable X offers many advantages, there are also some potential disadvantages to consider:

  • Limited support: Immutable X is still a relatively new platform, and it doesn’t have the same level of support as some other blockchain platforms. This means that there may be fewer resources available if you need help with using the platform. It’s like being one of the first customers of a new company – you might have to be more patient while they build up their support infrastructure.
  • Competition: Immutable X faces competition from other blockchain platforms that are also focused on NFTs, such as Polygon. This competition can be beneficial for users as it drives innovation and improvement, but it also means that Immutable X needs to constantly evolve to stay ahead.
  • Volatility: The price of the IMX token, which is the native token of Immutable X, can be volatile. This is a common issue with cryptocurrencies in general, and it’s something to be aware of if you’re considering investing in IMX. It’s like investing in the stock market – the value of your investment can go up or down, and there’s always a risk involved.
  • Centralization: While Immutable X utilizes Ethereum’s security, it relies on a centralized party for some of its operations. This can be a concern for users who prefer fully decentralized solutions.

It’s important to weigh these disadvantages against the advantages when considering whether Immutable X is the right platform for you.

Use Cases of Immutable X

Immutable X is designed to support a wide range of NFT use cases, including:

  • Blockchain games: Immutable X is ideal for blockchain games that use NFTs to represent in-game items. Its fast transaction speeds and zero gas fees allow for seamless and cost-effective trading of in-game assets. For example, games like Gods Unchained and Guild of Guardians, which were developed by Immutable X, have successfully utilized the platform to create engaging and rewarding gaming experiences.
  • NFT marketplaces: Immutable X can be used to build NFT marketplaces that are more scalable and user-friendly than traditional marketplaces. Its layer-2 architecture allows for high transaction throughput and low fees, making it ideal for high-volume trading. Imagine a bustling online marketplace where you can buy and sell unique digital items without having to worry about high transaction fees or slow processing times.
  • Digital art and collectibles: Immutable X can be used to create and trade digital art and collectibles as NFTs. Its zero gas fees make it affordable for artists and collectors to mint and trade NFTs, even for low-value items. This opens up new possibilities for artists to monetize their work and for collectors to acquire unique digital assets.
  • Immutable X Marketplace: Immutable X also has its own marketplace, which serves as a default platform for trading NFTs on the protocol. This ensures that users and developers always have at least one place to trade their NFTs. The Immutable X Marketplace also lowers the entry barrier for content creators and small developers who lack the capacity to build their own marketplace platform.

These are just a few examples of the many ways that Immutable X can be used to support the growing NFT ecosystem.

Team background

Sydney-based Immutable (previously known as Fuel Games) was founded by blockchain enthusiasts James and Robbie Ferguson and Alex Connolly in 2018.

They initially focused on Immutable’s NFT trading games Gods Unchained and Guild Of Guardians but have since worked on being the back-end for NFT trading beyond the gaming industry.

Immutable now has more than 100 members who have worked with FAANG, fintech, and management consulting. James, Robbie, and Alex are still with Immutable serving as CEO, President, and CTO respectively.

Immutable has partnered with several leading companies in the blockchain and gaming industries, including StarkWare, GameStop, and TikTok.