What is Immutable X (IMX)?
Immutable X (IMX) is a Layer-2 scaling solution on the Ethereum (ETH) blockchain. To say this in simpler terms, we have to briefly discuss how Ethereum works, so we can understand what Immutable X was designed to do.
Ethereum is a Layer-1 blockchain which means that decentralized applications (dApps) can be built on it so they can utilize its global network of computers (nodes) for processing their own transactions. DApps like blockchain games in particular, rely on Ethereum's massive network for minting non-fungible tokens (NFTs) for use in gameplay.
However, due to the popularity of Ethereum, dApps often find themselves competing for network bandwidth. This sometimes results in congestion as well as high transaction fees, since Ethereum transactions rely on a “bidding” system whereby users who are willing to pay more for gas fees are prioritized for processing. Ethereum also runs on a Proof-of-Work (PoW) protocol, which means that it involves all of its thousands of network nodes for validating transactions, which further contributes to network lag.
This poses a problem for play-to-earn blockchain games and other dApps that make use of NFTs, that would rather keep their transaction fees at the lower end so they can attract more users and build up their community. They also need a faster and more efficient means for minting NFTs, without adding more to the cost of the asset.
This is where Immutable X comes in as a solution which drastically speeds up the process for dApps that are integrated with its technology. Immutable X is basically a sidechain, or a smaller blockchain, which can scale Ethereum’s computational power more efficiently–particularly for minting and trading NFTs.
How Immutable X does this is by using an engine called Zero-Knowledge Rollup (ZK Rollup) which basically “rolls up” hundreds of transactions to be processed all at once by batches instead of one transaction at a time had it been the case if the main Ethereum layer would be used. The process is so efficient that minting NFTs on Immutable X is completely “gas-free” for the user, with the network able to process 9,000 transactions per second (TPS). Users can also browse through Immutable X’s marketplace to buy or sell NFTs for no additional cost in gas as well.
What is IMX for?
IMX is the ERC-20 token that powers the Immutable X network. It has the following utilities:IMX can be staked for rewards - Users can hold and stake IMX in staking pools to earn rewards and support development growth on the platform.
IMX can be used to vote on future updates - IMX is also the network’s governance token, which means that holders can vote and propose on the platform’s future features and overall direction. The more tokens one holds, the more voting power one has to effect changes.
IMX has a maximum supply of 2 billion tokens of which only 235 million are currently in circulation as of July 2022. IMX is also currently valued at $207 million in terms of market capitalization.
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DISCLAIMER: The statements in this article do not constitute financial advice. PDAX does not guarantee the technical and financial integrity of the digital asset and its ecosystem. Any and all trading involving the digital asset is subject to the user’s risk and discretion and must be done after adequate and in-depth research and analysis.
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