Immutable X is trying to leverage layer-2 technology to allow NFTs on Ethereum to scale. It offers very low gas fees and transactions are finalized almost instantly. This allows to trade as well as mint NFTs at a low cost and enjoy an AAA+ user experience.
This is achieved by a technology that is called zero-knowledge rollup which has also the advantage of protecting the user’s privacy. It allows Immutable X to handle up to 9.000 transactions per second and includes a global order book that increases liquidity in the NFT market. Immutable X was founded and is led by its CEO James Ferguson and his brother Robbie Ferguson who is acting as its president.
What else has Immutable X to offer and how exactly does it work? In this article, we are going to explore how this protocol aims to improve NFTs on Ethereum.
Immutable X reduces costs
Ethereum has still a long way to go in terms of scaling the network. Ethereum 2.0 and sharding are believed to solve some of the problems. However, it will take more than a year until this technology is ready. In the meantime, optimistic rollups and zero-knowledge rollups are the most promising solutions.
Immutable X aims to reduce the costs that are involved when minting and trading NFTs. In many cases, the gas fees exceed the cost for the trade or the minting. In some cases, the minting even fails when too many users are trying to transact at the same time. In effect, the transaction costs are lost which creates not only a frustrating user experience but also a financial loss that can be substantial.
ZK-Rollups solve this problem by batching hundreds of transactions into a single zero-knowledge proof and then submitting them to the network. This is also known as ZK-STARK proof which stands for zero-knowledge succinct transparent arguments of knowledge. This verification method allows creating proof that you have information without revealing it. In effect, ZK-STARK allows Immutable X to scale and protect user privacy by not giving away any of the actual transaction data.
While there are fees involved when Immutable X is submitting a transaction to the Ethereum blockchain, end users won’t have to pay gas fees. It has also several other notable features:
- An NFT exchange with a global order book that can be used by any NFT marketplace that implements the Immutable X scaling solution.
- One of the most powerful REST APIs which simplifies interactions on the blockchain.
- Immutable X is carbon neutral by buying carbon offsets.
The IMX token
IMX is the native token of Immutable X that serves two different purposes. Like many tokens with similar use cases, IMX uses the ERC-20 token standard. It is first and foremost a utility token that is used to pay transaction fees and incentivize users and developers to use and work on Immutable X. Each time they contribute to the development of the platform or its growth they get rewarded with IMX in return for their efforts.
IMX also allows token holders to earn passive income through staking in so-called reward pools. Another typical use case is the governance of the protocol. Token holders are able to decide on Immutable X’s future by voting on different proposals of how the platform shall be developed further. Voting rights are earned by holding IMX and the more tokens you hold the higher is your voting power. This hands the governance over to those people who have skin in the game by holding a larger stake.