Immutable X (IMX): The Best Layer 2 Scaling Solution for NFTs
Since the first NFT was developed in 2014, these digital assets have proven to be highly popular among artists, developers, crypto investors, celebrities and other professionals, causing many to join the NFT market.
Despite the immense popularity of non-fungible tokens, there have been numerous challenges that the NFT sector has had to contend with, the primary of which are scaling issues and high gas fees following NFT expansion. Immutable X is a scaling solution designed with Layer 2 technology that's built on the Ethereum blockchain. Along with exceedingly low gas fees, this solution also provides instant trade confirmations.
What Is Immutable X?
Immutable X is a Layer 2 scaling solution that's used for NFT projects on Ethereum. The primary features available with the Immutable X platform include scalability, near-zero gas fees and the ability to launch projects quickly.
Immutable X is designed to solve many of the issues that the Ethereum blockchain has with scalability and gas fees. As a Layer 2 technology, this supplemental protocol is essentially positioned on top of the Ethereum blockchain to enhance throughput without needing to reduce security or decentralization. The Immutable X token, IMX, is an ERC-20 token. Its purpose is to improve the verification process for NFTs, which benefits developers and creators alike. Anyone who invests in the IMX token can use it to:
Pay any transaction charges that arise
Stake to obtain rewards
Vote for programs with the governance mechanism
How Does Immutable X Work?
The Immutable X ecosystem is composed of many different pieces of technology that make it what it is. However, the core technology behind this platform is the zero-knowledge rollup, which is a standard Layer 2 protocol that can be used for transaction validations on Ethereum. This technology obviates the need to add all transaction data directly to the blockchain.
Instead, it batches together hundreds of separate transactions into a single zero-knowledge proof that's referred to as a ZK-STARK. The ZK-STARK proof verification method proves that specific information is available without revealing what any of that information is, which means that transactions can be verified while maintaining enhanced security.
Once transactions have been batched together, the proof is submitted to the blockchain, which is then verified via a smart contract. This smart contract is able to keep track of all transaction details that are kept on the Layer 2 technology. The inclusion of this contract ensures that the proof can be verified in next to no time.
Because of how this technology is structured, validating an entire block of transactions requires less storage and computing resources. Immutable X can verify more than 9,000 transactions per second (TPS), which allows for much lower gas fees.
All NFTs that are traded or minted through Immutable X are known to be 100% carbon-neutral. Compressing the data that's needed for the minting process consumes much less energy. At the moment, Immutable X supports every desktop Ethereum wallet. NFT users can easily trade NFTs through various crypto wallets without needing to transfer their assets to an entirely different network.
Features of Immutable X
Immutable X is the very first Layer 2 scaling solution that’s been designed specifically for NFTs on the Ethereum NFT marketplace. This platform is meant to mitigate Ethereum’s poor and confusing user experience, illiquidity and insufficient scalability.
Users can also benefit from practically instant trades and near-zero gas fees. Because of the technology that powers Immutable X, NFTs can be developed and distributed on a large scale. The IMX token also consists of components that facilitate better project creation on Ethereum.
ZK-Rollup Scaling Engine
Immutable X is among the first platforms to use ZK-rollup technology while also focusing solely on NFT projects. This platform combines proof logic with NFT-specific exchanges. Rollups provide users with a positive experience as well as high amounts of scalability, while still enjoying ample security.
Hundreds or thousands of transactions can be batched together with this technology for quicker validation. By accommodating over 9,000 NFT trades each second, the platform’s workload is significantly reduced. Gas fees should also drop by a considerable amount.
API Abstraction Layer
Another feature of Immutable X is the API abstraction layer, which wraps around the scaling engine and allows developers to interact with smart contracts. This feature helps new entrants establish themselves quickly with fast launching for new projects.
Layer Two Scaling Solution
As a Layer 2 scaling solution, every developer who uses Immutable X benefits from quick speeds, near-zero gas fees and the security that Ethereum provides. Immutable X is solely additive to the Ethereum blockchain, without taking anything away from the base blockchain.
Immutable X supports every Ethereum wallet type, so it doesn’t require users to switch from one NFT marketplace to another. It also provides a type of intermediate layer known as IMX Link that allows users to benefit from a wallet experience which centers entirely around NFT projects. Third-party NFT marketplaces are also supported by Immutable X without security risks.
The inclusion of software development kits provides developers with the ability to integrate directly into Immutable X with ease. The future road map for this platform centers on supporting every programming language and development platform, from Android and iOS to Unity. Providing this support contributes to the efficient creation of NFT projects.
Shared Liquidity and Order Book
Immutable X offers shared liquidity via a shared order book that facilitates protocol liquidity. Orders can be filled through cross-market economies. In turn, price discovery and bootstrapping are bolstered. By implementing this technology, NFT marketplaces can be created without requiring a back end.
Zero Gas Fees
There are hardly any gas fees associated with performing transactions via Immutable X. Around 20% of the protocol fee is paid with IMX tokens. This fee can be delivered with the IMX token or with a different currency. However, users aren't required to have IMX tokens if they want to complete transactions with Immutable X.
When staking with IMX, the tokens obtained through a fee capture mechanism are sent over to a larger pool. Every month, the pool is distributed to active stakers. The number of tokens a staker receives depends on the amount of funds they’ve staked up to this point. If you want to effectively stake your IMX tokens, you must:
Hold this token on a Layer 1 or Layer 2 scaling solution
Either hold this token or finish a trade every 30 days
Vote on any governance protocol every 30 days
Your reward can vary, and will largely depend on what governance protocols have occurred. All rewards are distributed via Layer 2.
Immutable X uses a decentralized governance system wherein IMX holders can vote on governance proposals brought forth by other users. The best aspect of decentralized governance is that IMX holders have a say in the platform's road map and in determining what fees will be charged.
Immutable X has a total supply of 2 billion IMX, which have been developed and distributed via Digital Worlds NFTs. This token is distributed in four areas, which are broken down into:
Foundation reserve: 4%
Public and private token sales: 19.26%
Project development: 25%
Ecosystem development through developer grants and user rewards: 51.74%
All governance proposals developed on IMX are published directly on Snapshot and mainly relate to further expansion and development of the Immutable X protocol. All staking fees are placed within the staking reward pool. It's possible to earn IMX tokens by trading NFTs, earning points or receiving IMX rewards through the daily rewards pool. The current IMX price is just above $1. The token's market cap is approximately $269 million.
Immutable X Road Map
Immutable X has a strong road map that's centered on constantly enhancing and growing the brand. In February, the Immutable X marketplace accommodated the launch of the Chain Debrief Genesis NFT collection, Enlightened Rats, which sold out almost immediately. A couple of additional features were added to the Immutable X platform in April: Nexus Learn and Earn tool, and Pulse Analytics.
During May 2022, the entire Immutable X website was redesigned to make sure that users have a great UI experience. At the moment, the platform is working on developing a user dashboard alongside a wallet connect feature, and an NFT calendar will be implemented in the near future. The platform's focus in the months to come involves more NFT collaborations to effectively strengthen the platform.
In late July, Immutable X also launched its Trade to Earn program. Users can receive rewards for trading on the Immutable X platform. Each day, 40,000 IMX tokens are given away, and everyone is eligible to take part in this program.
NFTs are rapidly increasing in value, which is why Immutable X is so important for NFT marketplaces. Without this scaling solution in place, Ethereum would be unable to handle their high volume of trades while also providing reasonable gas fees. Ethereum’s current proof of work (PoW) mechanism can only process 10–15 transactions per second, which is why the Immutable X solution is necessary. The benefits of the Immutable X platform should make it easy for it to gain NFT collaboration in the future.
IMX Price Prediction
While IMX has some volatility to it, the token has been relatively stable over the long run. Currently, it’s trading around $1. It's estimated that prices could increase to around $1.33 by the end of 2022.
Where to Buy IMX
The IMX token is available on many crypto exchanges but cannot be bought with fiat currency. If you want to purchase IMX, first buy Bitcoin, BNB, USDT or ETH from one of the major exchanges before transferring your holdings to an exchange that facilitates IMX trades.
From a smartphone:
Register a new account, or log in to your existing one
Click on Buy Crypto → Express
Enter the amount of IMX you'd like to buy, and the token you're using for your trade
Proceed with your payment
Input all of your necessary information to finalize the transaction
From a desktop:
Make sure that you have a Bybit account, or create one
Choose Buy Crypto from the menu, then Express from the drop-down menu
Input the amount of IMX that you’d like to purchase with the token of choice
Verify the transaction to finalize your purchase
Is IMX A Good Investment?
If you're searching for a relatively stable token to invest in, IMX is a good option. Immutable X is a highly useful platform that adds much-needed scalability to the Ethereum blockchain. The token itself doesn't cost that much, which means that making a sizable investment shouldn't require you to dip significantly into your available assets. Immutable X is likely to grow as it attempts to gain more partnerships with NFT platforms.
The Bottom Line
Immutable X is a Layer 2 scaling solution that has already proven to be invaluable when paired with Ethereum. IMX is its utility token, providing inherent value to anyone who holds it by accommodating staking as well as governance voting on Immutable X. If you're considering investing in IMX, make sure that you first purchase another cryptocurrency such as Bitcoin or Ethereum which you can use to buy IMX.