1. Background
Compared with other fields (DeFi, content, etc.), games are the key to the large-scale application of blockchain technology. Because games have a large audience, good token design is easier to use and support in games, and is relatively less affected by regulation.
However, games also have high requirements for blockchain technology, such as scalability. If the scalability (TPS) cannot keep up, the game may become stuck, which will seriously affect the user's gaming experience. For example, the CryptoKitties game that appeared in 2017 once caused serious congestion on the Ethereum network, which not only affected the user experience, but also further led to high gas fees for the entire Ethereum network.
Scalability (TPS) and gas fee issues have become key factors hindering the implementation of blockchain technology in the gaming industry.
Since the launch of the CryptoKitties game, the exploration of the application of blockchain technology in the gaming industry has never stopped. Web3 games have gradually become one of the main tracks for blockchain technology application cases. More and more mainstream game manufacturers have also begun to use blockchain technology to develop game products. The Web3 game infrastructure Immutable emerged in this context.
2. What is immutable
Immutable is a leading Web3 gaming project in the industry. The platform simplifies the creation process of Web3 games through pre-built solutions.
Immutable X is a second-layer solution designed specifically for GameFi, jointly developed by Immutable, the developer of the well-known blockchain game Gods Unchained, and Starkware, one of the four kings of Ethereum Layer2. It is the first ZK-rollup second-layer protocol on Ethereum for trading and transferring NFTs, with instant transaction confirmation, zero gas fees, and huge scalability. It can perform 9,000 transactions per second.
Immutable X is a project in the Ethereum Layer 2 protocol that focuses on NFT and Gamefi. Immutable is an excellent infrastructure platform for both game users and game developers. Game developers can quickly build Web3 games through the tools provided by Immutable. At present, more and more well-known projects have settled in Immutable, and Immutable has become the first choice for many game developers.
3. Advantages of Immutable
As an infrastructure project based on Ethereum and focusing on NFT and Gamefi, what makes Immutable the first choice for game developers? What are its main advantages?
1. High scalability
As we all know, the scalability (TPS) of the Ethereum mainnet is low, especially for projects with high requirements for immediacy (such as games and NFT projects), the user experience on the Ethereum mainnet is relatively poor, which seriously limits the development of the Ethereum ecosystem. The emergence of Ethereum Layer2 can make up for the lack of scalability of the Ethereum mainnet to a certain extent.
Immutable, an Ethereum second-layer project focusing on NFT and Gamefi, can provide a transaction speed of up to 9,000 TPS with the help of the powerful function of StarkEx zero-knowledge summary (ZK summary), which is much higher than other main networks. This lays the foundation for it to adapt to the higher transaction volume that may be brought by more game players in the future.
The reason why immutable has such high scalability (TPS) is that it uses the related Rollup technology. The main principle is to package a large number of performance-intensive computing and storage transactions in batches off-chain, and then unify them to the Ethereum main network for data availability verification, which can greatly improve scalability.
2. Zero Gas NFT Minting and Trading
Ethereum's high gas fees reduce the user experience of Web3 games. For example, when minting and trading NFTs in the game, you need to pay a certain amount of gas fees, and almost every step requires signing and paying gas fees. For players who are already familiar with Web2 games, the usage threshold is still a bit high.
Immutable, as an infrastructure platform for Web3 games, takes a different approach and does not charge gas fees for the issuance and trading of NFTs.
For a user, as long as they use Immutable X, they can pay zero gas fees when trading NFTs, which will greatly simplify the entry process for players who are not familiar with Web3 transactions, lower the threshold for players to use, and thus help promote the outbreak of Web3 games.
High scalability and zero gas fees are important factors for many game developers to choose the Immutable platform.
3. Security
Security is increasingly becoming one of the main issues facing the blockchain industry. For example, there are constant reports of asset thefts from exchanges and cross-chain bridges, causing huge losses to platforms and users.
While some projects have chosen to launch their own blockchains or sidechains as a means of enhancing Ethereum’s scalability limitations, these alternatives do not inherit Ethereum’s security, are less secure, and are less decentralized than Ethereum.
Especially for Web3 games, the platform tokenizes users’ game props. In Web3 games, users’ game assets can be traded. Therefore, it is also an urgent need for the platform to be able to safely store users’ game assets.
Although there are many public chains at present, Ethereum is still the best in terms of comprehensive security, decentralization, and ecological development. Immutable is built on Ethereum, and of course it inherits the underlying security of the Ethereum mainnet. In addition, Immutable chooses zkRollup technology. Unlike Optimistic Rollup, zkRollup uses validity proof to achieve instant withdrawals, which makes it more instant and private.
4. Protocol order book integration liquidity
Immutable can provide collective liquidity across games by building order book functionality at the protocol level, which is one of Immutable's significant advantages.
Through this feature, users' orders to buy or sell assets on one NFT market will be listed on all NFT markets supported by Immutable. That is, when a user places an order on one NFT market, the order will also be displayed on other NFT platforms supported by Immutable.
Platforms powered by Immutable include the NFT marketplace of US video game retailer GameStop, as well as gaming marketplaces registered on Immutable. This liquidity integration can increase trading depth and provide users with a better trading experience.
Listing NFTs from newly launched games on existing game NFT marketplaces is a powerful marketing advantage as it significantly increases their exposure, and this cross-game liquidity integration is particularly attractive to new developers.
Moreover, this liquidity integration will become stronger as more projects join the Immutable platform, and the network effect will make the Immutable platform more and more attractive. In the future, there may be platforms like Immutable that are highly scalable and secure, but users may not switch from one chain to another unless there is a special advantage. This is the power of the network effect.
Thanks to the protocol order book, gaming NFT trading volume and revenue doubled year-on-year in 2022, and as the ecosystem develops, the resulting network effects are expected to further promote liquidity integration.
5. Credit card payment
On the Immutable platform, in addition to gas-free minting, it also attracts mainstream gamers by supporting credit card payments, greatly lowering the entry threshold for the mainstream player market.
For example, at the end of last year, Immutable X announced a partnership with payments company MoonPay to launch an NFT Checkout feature that allows users to mint and purchase NFTs using a debit or credit card.
When minting or purchasing NFTs on Immutable X, users can log in to their wallet and select "Pay by Card". After completing the transaction, the NFT will be transferred to the user's wallet.
Additionally, for builders, Immutable X provides professional and simple APIs and SDKs to allow new games to be launched faster.
4. Team
Immutable was co-founded by a pair of young brothers from Australia. The elder brother, James Ferguson, serves as CEO. He studied law at the University of Sydney from 2011 to 2016. After graduation, he founded three companies and started Immutable in 2018. Robbie Ferguson, who is five years younger, also studied at the University of Sydney, but dropped out due to the establishment of Immutable and became the general manager. CTO Alex Connolly is also a fellow student. He dropped out of the University of Sydney and founded Immutable with the Ferguson brothers.
In addition to the IMX infrastructure, Immutable also has a game studio that is responsible for the operation and maintenance of Gods Unchained, and also distributes games. Another game project currently promoted by the platform, Guild of Guardians, is distributed by Immutable Game Studio.
Although the core team is young, it has invited many senior industry figures and has solid capital support behind it.
5. Financing
So far, Immutable has announced five rounds of financing, with a total financing of US$280 million.
1) In July 2018, it announced two rounds of financing, both led by Continue Capital and Nirvana Capital, with each round amounting to US$2.4 million;
2) In September 2019, it completed a US$15 million Series A financing round led by Galaxy Interactive and Prosus Ventures;
3) In September 2021, it completed a AUD 82 million Series B financing round led by BITKRAFT Ventures and King River Capital;
4) In March 2022, it completed a US$200 million Series C financing round led by Temasek.
Immutable has more than 20 investment institutions, including Coinbase, Galaxy Digital, Nirvana Capital, Continue Capital, etc.
6. Token Economy
IMX is the native ERC20 token of the Immutable X ecosystem, with a total supply of 2 billion.
1. The IMX token distribution plan is as follows:
1) 51.72%: For ecosystem development. These tokens will be used as user rewards, developer rewards, liquidity provider rewards, and marketing activities, etc.;
2) 25%: for project development. These tokens will be used to support the development of Immutable X, which will be carried out by immutablepty.ltd.
3) 19.28%: used for private placement and public sale.
4) 4%: As a fund reserve, it will be used for initiatives related to the development of the ecosystem in the future, mainly for exchanges, marketing activities and other initiatives that the foundation believes are beneficial to the ecosystem.
2. IMX Token Usage
IMX tokens can be used to reward users and pay transaction commissions. People can put their IMX assets into the staking pool to get generous staking rewards. IMX token holders can also vote on governance. The number of IMX tokens held determines the voting rights, and the voting rights increase with the number of tokens.
The following are the three core functions of IMX Token:
cost:
The 20% protocol fee for each Immutable transaction must be paid in $IMX. Users can choose to pay this fee directly with IMX tokens. If $IMX is not currently available, Immutable will convert the fee by purchasing $IMX on the open market (preserving a seamless user experience). In other words, you do not need to hold IMX tokens to trade on the protocol.
Staking:
All fees paid in IMX are sent to a “Staking Rewards Pool” and by staking your IMX tokens you have the opportunity to earn rewards from this pool if you meet the eligibility requirements.
Governance:
IMX holders can vote on governance proposals, including how to allocate token reserves, developer grants, and the future development direction of the Immutable X protocol. The voting weight is proportional to the number of tokens held by the user. The more tokens a user holds, the greater the voting power.
3. Token price performance
According to Coinmarketcap statistics, the current market value of IMX tokens is more than 600 million US dollars, ranking 54th in market value. The current circulating IMX tokens account for 56%, and the total circulating market value is 1.1 billion US dollars. The historical highest price of IMX tokens is 9.5 US dollars, and the current price is 0.57 US dollars, which has fallen 93.94% from the highest point.
VII. Current Status of Ecological Development
According to an official blog post, in June last year, Immutable X developer Immutable launched a $500 million development fund, Immutable Ventures (i.e. Immutable Developer and Venture Fund), dedicated to supporting Web3 games and NFT projects based on Immutable X.
The fund will allocate grants and investments in a combination of IMX tokens and cash to gaming projects built on the Immutable X platform, and will work with developers, IP holders, and strategic partners to provide support to advance the Immutable X protocol.
1. On-chain data shows active platform activities
Revenue
Based on the advantages mentioned above, Immutable has launched games such as Gods Unchained and Illuvium, both of which have generated stable revenue.
At the beginning of 2023, Immutable's monthly revenue was around US$300,000, and in May it reached nearly US$600,000. Recently, affected by the overall environment of the crypto market, its revenue has declined, but in July its revenue still reached more than US$400,000. Given the overall downturn in the NFT/GameFi market, this income level is already quite good.
Since Immutable recognizes 2% of NFT trading volume as revenue, this also indicates a high level of activity on the Immutable platform.
Compared with other competing protocols, Blur's revenue fluctuates greatly, while Immutable's revenue is in steady growth.
IMX holdings
Since the launch of the IMX token, trading volumes have been growing steadily.
Surges in trading volume have coincided with the launch of high-profile games or NFTs, with the most recent surge occurring on July 31, when the RPG game Ember Sword launched its Alpha Land Sale. Ember Sword attracted widespread attention, with 12,000 players from over 50 countries participating in the alpha game test alone.
The number of IMX token holders is also growing.
In addition to Ember Sword, the Web3 game Cross the Ages is also very popular in Web2. It once ranked first in the French App Store strategy game and remained in the top 5 for more than 4 consecutive weeks. Immutable continues to launch interesting games to bring new users into the ecosystem.
TVL
According to data from defillama, immutableX is second only to Blur Bids in NFT marketplace TVL, and its TVL has been growing both in the last 7 days and in the last month.
According to data from the l2beat platform, Immutable X ranks seventh in TVL among Ethereum Layer2.
2. More than 150 games have been launched
The advantages mentioned above are conducive to introducing many games to its platform, and Immutable itself is also developing Web3 games. In addition to Web3 games, Immutable has also cooperated with leading Web2 companies such as GameStop, Warner Games, iLogos and Mineloader to introduce Web2 games to the platform.
These new additions include IMVU, which has 7 million monthly active users, Cross the Age, which holds the No. 1 spot in the App Store, Undead Block, Kiraverse (beta), Aglet, and Immortal Game.
According to data posted on immutable Twitter, there are currently more than 150 games in the ecosystem, covering a wide range of genres, including RPG, FPS, and more.
Although the cryptocurrency market is still in a bear market, Immutable is still actively developing new products. For example, in March this year, it announced a partnership with Polygon to develop zkEVM compatible with EVM. In addition, Immutable is also committed to improving user UI/UX, which is also a continuous obstacle to the large-scale adoption of Web 3 games.
3. Immutable has launched the Immutable zkEVM test network
Immutable has launched the Immutable zkEVM testnet. Existing smart contracts and Solidity code can be directly migrated to Immutable's zkEVM testnet environment for free.
Immutable plans to continue improving the testnet experience while pushing for the mainnet release. The Immutable zkEVM mainnet is currently scheduled to be released in the fourth quarter of this year.
According to Immutable, more than 20 gaming companies have partnered with Immutable to support the launch, including GameStop, TokenTrove marketplace, online game publisher Kongregate, game designer iLogos, and more.
At least 12 games have begun building their Web3 games on zkEVM, including CoinArcade, Galaxy Commanders, Medieval Empires, MetalCore, Meta Toy, DragonZ SAGA, Rune Realms, Shardbound, Infinite Victory, EF Defense, SimWin Football. MetalCore announced that it will release a Beta version on Immutable zkEVM on September 15.
8. Conclusion
In short, Immutable has attracted more and more game projects to the Immutable platform with its high scalability, strong security, gas-free NFT casting/trading, and integrated cross-game liquidity. Currently, more than 150 different types of Web3 games are being built in the ecosystem.
Although it is currently in a bear market, Immutable is still working hard to launch new products, continuously optimize the platform user experience, and launch the Immutable zkEVM testnet. The release of zkEVM will bring more games to the ecosystem and promote the long-term development of the platform. Immutable will become one of the most important Web3 game infrastructure platforms.
Immutable is a high-quality project worthy of our attention. HotairballoonCN will continue to pay attention and share the latest information in a timely manner.