Introduction
The purpose of this article is to provide an overview of Immutable X, a layer-2 scaling solution for non-fungible tokens (NFTs) on Ethereum. The article will cover the project’s background, tokenomics, features, functionality, roadmap, risks, and challenges. The article will also explain why Immutable X is a unique and innovative project that aims to solve the problems of scalability, cost, and security for NFTs on Ethereum.
Overview
Immutable X is a layer-2 scaling solution for NFTs on Ethereum that uses zk-rollups and STARK proofs. It aims to offer instant trading, massive scalability, and zero gas fees for minting and trading NFTs without compromising user or asset security. Immutable X is built with STARK zk-rollups, a technology that Vitalik Buterin considers Ethereum to be “all-in on.Thanks to this technology, users will be able to create and distribute assets like ERC-20 and ERC-721 tokens on a massive scale. Immutable X also supports custom smart contracts, enabling advanced gameplay mechanics and tokenomic functionalities for NFT projects. Immutable X is designed for games, applications, and marketplaces that prioritize high performance and low cost over advanced web3 game mechanics, while still maintaining the underlying security of Ethereum.
Background
Immutable X was founded by James Ferguson and Robbie Ferguson, two brothers who are Forbes 30 Under 30 entrepreneurs. They previously led a software development team at a billion-dollar eCommerce company and created Gods Unchained, one of the most popular blockchain games. The team consists of more than 100 members from different backgrounds like blockchain, FAANG, finance, fintech, and management consulting. Immutable X raised a seed round in 2018 and a $15 million Series A in September 2019. Investors included some of the “who is who” in blockchain investing, such as Coinbase, Naspers, Nirvana Capital, Apex Capital Partners, Continue Capital and Galaxy Digital
Immutable X was launched on the Ethereum mainnet in April 2021, after a successful alpha test in March 2021. The project partnered with several NFT projects, such as Gods Unchained, Illuvium, Guild of Guardians, Superfarm, and Mintable, to enable them to scale and grow on Immutable X. In September 2021, Immutable X announced its EVM compatibility, allowing developers to deploy any Ethereum smart contract on Immutable X with minimal changes. In October 2021, Immutable X launched its native utility token, IMX, which can be used for fees, staking, and governance. In November 2021, Immutable X became the first carbon-neutral NFT platform, offsetting 100% of its carbon emissions through certified carbon credits.
Tokenomics
IMX is the native utility token of Immutable X. It has a total supply of 20 billion tokens, of which 10% were allocated to the public sale, 20% to the team and advisors, 20% to the ecosystem fund, 20% to the treasury, 10% to the foundation, and 20% to the staking rewards pool. The token distribution is designed to ensure long-term alignment of interests and incentives among the stakeholders of Immutable X.4
IMX has several use cases within the Immutable X ecosystem, such as:
-Paying transaction fees: Users can pay transaction fees on Immutable X with IMX, which are then burned to reduce the token supply and increase its scarcity.
-Staking: Users can stake IMX to secure the network and earn rewards from the staking pool. Stakers also have the power to vote on protocol upgrades and governance proposals.
-Governance: Users can participate in the governance of Immutable X by proposing and voting on changes to the protocol parameters, such as fee rates, staking requirements, and carbon offset policies.
IMX can be bought, stored, and traded on various platforms, such as Immutable X, Coinbase, Binance, Uniswap, and Metamask. IMX is compatible with any ERC-20 wallet and can be transferred between Ethereum and Immutable X seamlessly.
Features and Functionality
Immutable X has several core features and use cases that make it a unique and innovative layer-2 scaling solution for NFTs on Ethereum, such as:
-Zero gas fees: Immutable X eliminates the need for users to pay gas fees for minting and trading NFTs on Ethereum, which can be prohibitively expensive and unpredictable. Instead, users only pay a small transaction fee in IMX, which is burned to reduce the token supply.
-Massive scalability: Immutable X can process over 9,000 transactions per second (TPS), which is over 600 times more efficient than the Ethereum mainnet, which can only handle roughly 15 TPS. This enables users to create and distribute millions of NFTs for free and unlock truly scalable web3 games.
-Instant trading: Immutable X allows users to trade NFTs instantly and securely, without waiting for block confirmations or risking front-running attacks. Users can also enjoy high liquidity and low slippage, as Immutable X supports batch auctions and limit orders.
-Ethereum security: Immutable X relies on STARK proofs, which are cryptographic proofs that verify the validity of transactions on Immutable X without requiring the full computation of the transactions. These proofs are submitted to the Ethereum mainnet, which acts as the ultimate source of truth and security for Immutable X. This means that users can trust that their NFTs are safe and secure on Immutable X, as they are backed by the security and decentralization of Ethereum.
-EVM compatibility: Immutable X supports custom smart contracts, which enable developers to deploy any Ethereum smart contract on Immutable X with minimal changes. This allows developers to leverage the full potential of Ethereum’s programmability and create advanced gameplay mechanics and tokenomic functionalities for their NFT projects.
Risks and Challenges
Immutable X is not without its risks and challenges, which include the following:
-Regulatory uncertainty: Immutable X operates in a highly dynamic and uncertain regulatory environment, as the legal status and treatment of NFTs and crypto assets vary across different jurisdictions and are subject to change. Immutable X may face regulatory scrutiny, compliance issues, or legal actions that could affect its operations, reputation, or viability.
-Technical complexity: Immutable X relies on complex and novel technologies, such as zk-rollups and STARK proofs, which are still in their early stages of development and adoption. Immutable X may encounter technical difficulties, bugs, errors, or vulnerabilities that could compromise its functionality, security, or performance.
-Competitive pressure: Immutable X faces competition from other layer-2 scaling solutions, such as Polygon, Arbitrum, Optimism, and ZKSync, which also offer scalability, low cost, and security for NFTs and other crypto assets on Ethereum. Immutable X may lose its market share, user base, or network effect if it fails to maintain its competitive edge or differentiate itself from its rivals.
Conclusion
Immutable X is a layer-2 scaling solution for NFTs on Ethereum that uses zk-rollups and STARK proofs. It aims to offer zero gas fees, massive scalability, and Ethereum security for NFT projects, without compromising user or asset security. Immutable X also supports custom smart contracts, enabling advanced gameplay mechanics and tokenomic functionalities for NFT projects. Immutable X has a strong team, a clear roadmap, and a growing ecosystem of partners and users. However, Immutable X also faces risks and challenges, such as regulatory uncertainty, technical complexity, and competitive pressure. Immutable X is a unique and innovative project that aims to solve the problems of scalability, cost, and security for NFTs on Ethereum.
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