Immutable X (IMX) is an "accelerator" for NFT in blockchain games

The Ethereum blockchain, despite its immense popularity among developers of blockchain games and NFT collections, still has many drawbacks. The main one is costly and difficult scaling. The transition to Proof-of-Stake (PoS) has somewhat reduced the severity of the problem but could not solve it completely.

This is where the cryptocurrency community came to the aid of third-party solutions to improve the scalability of the popular blockchain. One of the most successful among them is the Immutable X project.

General information

Immutable X is a Layer-2 (second layer solution) to fix NFT scalability issues on Ethereum. It is not a standalone network with its own blockchain but a protocol created on top of an existing network.

Thanks to Immutable X, users can transfer ERC-20 and ERC-721 tokens to each other on the Ethereum network faster than with a "traditional" token transfer mechanism, and virtually free of charge. More precisely, the minimal costs still required for the system to work are paid by applications (their developers), not by end users.

Of course, this solution in itself is extremely attractive to NFT token holders (especially those who actively trade them), as well as blockchain game developers and players. Transactions involving gaming NFTs are more frequent than with "regular" non-interchangeable tokens, so speeding up their processing and lowering costs is even more sensitive.

But on top of that, Immutable X also makes it easier for dApps users to work with Ethereum and reduces the blockchain's environmental footprint, which positively impacts the project's reputation and relationship with the press and regulators.

How Immutable X works

The solution is based on ZK-rollup technology, which allows proving the validity of data without disclosing it. In simplest terms, the protocol does not add each transaction individually to the Ethereum blockchain. Instead, it forms a block of several hundred transactions and creates a single proof of evidence for them, the so-called zk-Stark. This proof does not disclose information about individual transactions but only confirms the validity of all transactions in the block. And already this proof is stored in the smart contract Immutable X, on the Ethereum blockchain.

When the blockchain processes a single transaction instead of several hundred, the cost (in both gas and electricity) and processing time are drastically reduced.

Immutable X is currently capable of processing over 9,000 transactions every second. Gas costs are minimal for developers of decentralized applications, NFTs and games and zero for application users.

Immutable X also reduces the environmental impact of blockchain operations. For example, issuing eight million ERC-721 tokens in the "normal way" requires 430 MWh, while using this Layer-2 solution requires just over 1 MWh. While this number of non-interchangeable tokens may seem prohibitive, it's not uncommon for blockchain gaming projects. Moreover, the platform regularly purchases carbon credits to offset the residual carbon footprint after its operation.

Finally, Immutable X offers dApps developers an API for easy user interaction with the blockchain. More specifically, thanks to this API, users don't have to work with the blockchain directly and can send tokens to each other in a couple of clicks right in the game. This speeds up and simplifies all the processes and increases the immersion in the gameplay.

IMX cryptocurrency

IMX is the native token of the Immutable X project. It is used to pay commissions within the network, but its functionality is not limited to this.

IMX is also a platform management token — token holders can participate in voting on the project's further development, with the holders of the largest number of tokens having the strongest votes. But this is standard practice for such systems.

In addition, IMX serves for profitable farming — an asset can be tokenized in the liquidity pool created by the platform and receive remuneration for it.

The IMX rate at the time of writing is about $0.64 per token. Despite a sharp drop in the rate in spring 2023, the last year has been quite successful for IMX as a whole - the token rate is about 20% higher than a year ago.

However, a small insider trading scandal occurs every few months around the token, so it is necessary to be careful when investing in IMX.

Outlook for Immutable X

The improvement in the overall Ethereum scaling situation has not weakened Immutable X's position in the market. On the contrary, the platform has recently signed several partnership agreements with major NFT platforms and blockchain networks, including GameStop and Polygon. So, we can expect to see continued steady growth in demand for the platform for the foreseeable future.