Immutable X | What Is Immutable X | Deep Dive

Immutable X | What is Immutable X | Deep Dive

Review Date: August 26, 2021

Immutable X developed by Gaming company Immutable, which is famous for its blockchain-based game “Gods unchained”, was created as a next-generation protocol that provides the world of NFTs with scalable layer 2 solutions. Giving its users instant trade confirmation, massive scalability, and zero gas fees, Immutable X’s layer 2 zero knowledge-rollup solution boasts speeds of up to 9000 trades per second without any gas fees in a non-custodial manner.

Project Description

Aiming to capitalize on the future of digital assets, which has grown from $13.7 million in the first half of 2020 to $2.5 billion in the first half of 2021 – Immutable is developing a layer 2 scaling solution that overcomes the limitations of Ethereum’s congested network. Different from other layer-2 solutions which claim to provide layer 1 scalability and security through side-chains and other alternative methods, Immutable is able to guarantee the same security and scalability of Ethereum by utilizing ZK Rollups – giving it the capability of scaling thousands of transactions off-chain. Alongside creating the most efficient layer 2 scaling solution for NFTs, Immutable is also the first 100% carbon neutral NFT marketplace built on Ethereum.

Unique Value Proposition

Unlike other scaling solutions built for NFTs’ which were created out of desire to extract the most capital from the new-found market, Immutable X was developed out of need to scale Immutable’s blockchain-based game: “Gods Unchained”. Now with more than 100 team members with backgrounds ranging from blockchain, FAANG, finance, to management consulting – the company is on track to become the largest layer 2 infrastructure for NFTs in the blockchain industry.

Tackling one of the biggest challenges of the NFT industry with many different projects currently working on their own respective solutions like Tron, Flow, and EOS, Immutable boasts its approach to scalability to be the optimal one. By choosing to develop their protocol on Ethereum, the team at Immutable hopes to harness the enormous network effects of ETH’s ecosystem to provide developers and users with a platform that boosts liquidity and scalability to guarantee any NFT trade. Believing that NFT users and developers should not have to choose between security and network effects of Ethereum, Immutable is developing a cutting edge protocol for NFT’s which enables projects to build on layer two solutions with great UX and developer experience.

Current Partnerships

Use Case

Foreseeing the trajectory of the NFT market and the exponential rate of growth it has experienced in the last few months, Immutable believes that if the NFT industry continues to expand at the rate that it has, many large companies hoping to integrate an NFT experience into their brand will ultimately hit a wall when it comes to the scalability of their project.

While many other projects are hoping to meet this demand through less secure layer 2 solutions like plasma chains(Matic), state channels(Raiden), and optimistic rollups(Optimism) – Immutable hopes to capture market demand by using Starkware’s ZK-rollup method. Aiming to provide best-in-class scalability to NFT trades and platform creators, Immutable partnered with StarkWare-one of the major projects working on ZK-Rollup implementations.

Working in-depth on blockchain games for years, Immutable hopes to utilize the power of ZK-rollups to bring NFT projects and games the following solutions:

Unlimited Scalability
Instant Confirmation and mainstream user interface
Ethereum’s layer 1 security and ecosystem effects

Leveraging these core features, Immutable X is able to facilitate 600x more transactions per second than other Ethereum – based NFT marketplaces. In addition, with the recent introduction of their native token IMX, the platform hopes to organically grow its user base by airdropping IMX to users in contribution to the platform.

Technology

With hopes of becoming the next-generation protocol built on Ethereum for NFTs, Immutable provides developers and users with an unforgettable experience by leveraging the following core components of the protocol:

ZK-Rollup Scaling Engine: Experiencing the steepest growth curve of any network in recent history, the influx of millions of users on Ethereum’s blockchain has led to billions of dollars in transaction volume every day. While DeFi historically made up the majority of this transaction volume, currently, millions of dollars are flowing into Ethereum exclusively for the purchase of NFT’s. Being the dominant NFT blockchain, numerous innovations are taking place every day within Ethereum’s ecosystem. With this exceptional growth, many developers are looking to Ethereum to capture a piece of what will be one of the biggest digital transformations in history.

Noticing the lack of a sustainable and secure layer 2 solution built on top of Ethereum to provide the necessary infrastructure for NFT’s, Immutable X jumped to action to create a solution envisioned by none other than Vitalik Buterin himself – “the Ethereum ecosystem is likely to be all-in-one roll-ups as a scaling strategy for the near and mid-term future”. Developed in collaboration with StarkWare, Immutable’s best-in-class ZK-roll ups will allow for world-class scalability and user experience while retaining the underlying security of Ethereum.

To better understand the impact of this technology we must first define what a ZK- Rollup is: Referenced as a “roll-up” this smart contract mechanism bundles hundreds of transactions or NFT transfers off-chain and generates a cryptographic proof, known as a SNARK (succinct non-interactive argument of knowledge).

To prove the validity of a transaction, a SNARK validity proof is referenced instead of all transaction data in traditional scaling solutions. Building their protocol in this manner, Immutable X is able to scale Ethereum’s NFT capabilities to provide a platform that is cheaper on transaction cost and quicker in block validation. In addition to ZK-rollups, the platform is able to boast no delays when moving funds from layer 2 back to layer 1 because the validity proof has already verified the origin of the contract once before.
Vault Merkle Tree & Volition Model: Represented as a huge Merkle tree, assets integrated into Immutable’s layer 2 solution will be represented by a leaf node, where users must present the Merkle path from their assets (a leaf) to the root of the tree. According to Immutable X, the logic of this governing tree is encoded in two places:
1. In an on-chain smart contract verifier which governs deposits, withdrawals, and status updates – Merkle trees ensure that the root of a batch of transactions can only be updated in the presence of valid proof. To create an immutable record this instance is also time-locked, ensuring there is no chance of the vault Merkle tree ever transitioning to an invalid state.
2. In the Layer 2 proof logic, a Merkle tree will help determine that the transfer of assets is actually being carried out by the party that controls it.
Stark Proofs: Utilizing STARK proofs instead of the more common SNARK proofs, Immutable is guaranteeing a higher level of security by publishing a larger amount of proofs on-chain. According to the developers of the protocol, STARK validity proofs solve the real challenges facing NFT’s without compromising users’ security: Immutable believes this technology will continue to be the standard in the future of NFT’s scalability indefinitely.
API Abstraction Layer: In order to make their platform easier to build on, Immutable X combined their ZK-Rollup-based scaling engine with a set of powerful REST APIs, which allow developers to execute every interaction, from minting to trading, to transferring NFT’s in one simple API call. Working in collaboration with one of the leading API blockchain solution companies, Zapper Finance – Immutable is able to convert complex asynchronous blockchain transactions, which typically take minutes or hours to execute into simple REST API calls.

This powerful upgrade allows for existing blockchain projects to expand their NFT project without having the need to directly interact with smart contracts: allowing established gaming companies and content companies to launch their projects at a faster rate.
NFT-Enabled Wallets: Unlike other protocols which force individuals to switch networks to interact with different wallets, Immutable X created its own desktop Ethereum wallet with an intermediate layer called “the link” which enables cross-chain NFT trading, providing users with a digital wallet experience of world-class quality.
Shared Liquidity and Order Book: Immutable X provides a global order book to facilitate protocol liquidity. This effectively allows protocol developers to create NFT marketplaces without the need of maintaining their own backend. With the belief that NFT marketplaces will play a vital role in the industry, Immutable is catering to different audiences by creating a thriving ecosystem of third-party marketplaces where developers can expand their NFT offerings.
Transaction History Explorer: Immutable X is creating a transaction history explorer that tracks the development of its layer 2 network. By doing so the team hopes to foster trust and legitimacy to their platform by providing users and developers with a place to verify transactions and view the historical state of their project. In tandem with these technological innovations, Immutable also recently introduced their native token, IMX – which promotes a healthy community by rewarding pro-network activities on the platform so that all users benefit from the protocol’s growth.

Token Utility

Immutable X utility — Immutable X Token Utility

Currently, there are two main use-cases for Immutable X’s native coin, IMX:

As a smart contract platform, IMX will be utilized as a fee to benefit from Immutables layer 2 scalability – paid in IMX or Ethereum which is automatically swapped on the open market.

Fees collected from the platform from developers and users will ultimately be aggregated into a “staking rewards pool” – which at regular intervals rewards holders proportionally between all users who are actively staking IMX tokens on Immutable X. Launching this feature after the release of their mainnet, Immutable is automatically qualifying any stakers into the program who hold IMX on L1 or L2, voted on governance proposals, or have bought on an NFT on Immutable X. The image provided below shows the expected rewards an individual can receive in proportion to their represented stake in IMX’s pool.

Immutable is to be run via decentralized governance by handing over its protocol to its community. Allowing token holder’s who meet a specific threshold to vote on topics such as allocation of token reserves, developer grants, and changes in token supply, Immutable aims to provide continuous utility and decentralization to its native token IMX.

On September 8, IMX will hold its first token sale since its initial airdrop with their first official exchange partner, CoinList.

Tokenomics

Airdropping IMX tokens to early developers and users of their platform, Immutable is committed to its decentralized vision of becoming the go-to NFT scaling platform by rewarding individuals who contribute to building a scalable NFT ecosystem on Ethereum.

Nature of Token Supply

There is a total circulating supply of 20 million IMX tokens representing the value of this layer 2 NFT scaling solution and the vibrant community that it is building. By incentivizing the organic growth of its platform by rewarding individuals who play their native blockchain-based game, “Gods Unchained”, Immutable is ensuring it grows in a healthy manner. The native token IMX is subject to the following distribution and Token supply schedule.

Token Supply & Liquidity

IMX currently has a circulating supply of 700,000 tokens which were airdropped to early contributors, with plans of selling an additional 1,000,000 IMX tokens in their featured ICO on CoinList.

Company History

Gods Unchained was founded in 2015 by brothers James and Robbie Ferguson. After getting involved with Ethereum, the brothers went on to build the world’s first multiplayer blockchain-based game, the first blockchain trading card game, and the first ZK Rollup for NFTs on Ethereum – Immutable X, most known for powering the Gods Unchained game. The Game was first announced in 2018 when it made its first mythic card sale. Since then, they have sold millions of cards and raised over $17M in overall funding.

As NFT and crypto-based games are starting to gain popularity and attract those who want to earn while being entertained, it became one of the highest-grossing blockchain games of 2020, boasting millions of matches and over 4 million assets. In July 2021, Immutable announced the launch of a new Ethereum token, IMX to scale the NFT market. The token will sit at the heart of the ecosystem, providing both on-chain scalability and in-game usability. The token launch is just a part of Immutable X’s latest expansion with more projects on the horizon.

Leadership

James Ferguson, CEO, and CoFounder:

James previously led a software development team at a billion-dollar eCommerce company. He holds a Bachelor in Law and a Bachelor in Commerce (Finance) from the University of Sydney. Through the online MIT curriculum, he taught himself coding and moved to Silicon Valley in 2014.

Robbie Ferguson, CoFounder

Robbie previously built an automated capital gains tax platform at KPMG which was licensed to Australia’s largest cryptocurrency exchange. He became obsessed with Ethereum in 2015 and dropped out of a Computer Science/Law degree at the University of Sydney to create Immutable X. He was awarded the Thiel Fellowship in 2020.

Alex Connolly, Game Director

With his long track record in gaming, Chris Clay took the position of game director. His love of gaming and creation led him to join Turbine Inc. in 2000, where he spent 15 years working on massive multiplayer online games (MMOs) such as Asheron’s Call 1 & 2, Lord of the Rings Online, and MOBA Infinite Crisis. Chris spent the previous three years at Wizards of the Coast, working on Magic the Gathering: Arena – he is passionate about building brand new economies which empower gamers and communities via NFTs.

Competition

Flow, EOS, and TRON

Early Investor

Immutable X raised a total of $2.4M in its Seed round in July 2018 from Sora Ventures, Nirvana Capital, Continue Capital, and Coinbase Ventures. Went on to raise $15M in their Series A, led by Prosus Ventures, Continue Capital, and Galaxy Interactive; with participation from Apex Capital Partners, EOS VC Fund, Sora Ventures, and Reinventure.

Community Size

The Immutable X community is a big one,

Twitter: ~39K Followers
Telegram: ~3K Followers
Discord: ~2K Followers

Non-Crypto Mainstream Press

Yahoo: GreenPark Sports Partners With Immutable X Showcasing Sports NFTs
Nasdaq: NFTs and Gaming: A Match Made in Heaven?

Verdict

Immutable X is leveraging the power of Ethereum’s decentralized ecosystem and Starkwares ZK-rollup technology to carve its own niche in the NFT marketplace. By providing developers and users with a platform that brings massive scalability and zero gas fees for minting and trading NFTs, Immutable is in an ideal position to capture market share from this exponentially growing space. With plans to support more than 200 million trades per day in comparison to Ethereum’s current capability of 150,000 trades – Immutable X will play a key role in allowing developers to build games, applications, and exchanges on Ethereum in a more scalable manner.

After evaluating the project in its entirety, the Token Metrics team scored SuperRare objectively, and the results were the following:

Fundamental Score	81% (77/95)
Competition	6/10	Token Distribution	8/10
Team	13/15	Tokenomics	7/10
Community	4/5	Audit	0/10
Good Use-Case	18/20	ROI Potential	8/10
Investors	13/15	Technology Score	TBA