Immutable X overview
Immutable X is the first layer2 protocol dedicated to NFT on Ethereum, providing users with fast transaction speeds, great scalability, and zero gas fees with ZK-Rollup core technology. This project aims to make it easier to create and trade NFTs on Ethereum without compromising the security of the assets.
The worldwide gaming industry is valued at $180 billion, while GameFi/Metaverse is still in its infancy, so the opportunity will be huge when the "big guys" exploit this market and Immutable X is built to meet those needs. needs matching the game. Some core games on Immutable X include Gods Unchained, Guild of Guardians, Illuvium,...
Recently, Immutable raised a $500 million fund to develop Web3 games after a $200 million funding round in March, raising its valuation to $2.5 billion. In addition, this Layer2 also cooperates with Mastercard to make it easier to pay NFT via credit card instead of crypto. From there, you will have access to a larger customer base.
In addition, this is also a project backed by a number of large funds such as Coinbase Ventures, Galaxy Digital, Alameda Research,...
According to data from Sharkscan, in the past 2 months, positive money flows from wealthy Ethereum investors into IMX dominated, the most recent time being on September 13 with about $300,000. The technical chart also shows that this is a long-term accumulation zone and upside potential as this token does not have a real push wave yet.
A shark with total assets of $35,303,332 has been averaging continuously since the beginning of July and is currently holding over $7 million of IMX. With an average buy and sell price of $1.18 and $1.54 respectively, this investor's investment plan is delivering decent returns.
Besides, a wallet with $131,013,805 with the highest ETH ratio, after closing a part of IMX in the strong rally on August 31, continued to collect 180,000 IMX on September 7, equivalent to about $150,000.
However, currently only 12% of the total token supply is circulating in the market and have not yet conducted token payments for the investment fund as well as the team (scheduled to start vesting within 36 months from the start). from 11/2022 for the Private round - accounting for 14.26%) should be closely monitored.
With the introduction of the IMX token, the IMX Stake product was created to tailor incentives to promote the sustainable development of Immutable X. Unlike web2, where platforms extract value from users their own, through staking rewards, the platform ensures that value is shared back with users. the continuous development of the ecosystem through staking.
However, there have been many platforms in the past that offered Stake programs with sky-high Annual Percentage Rate (APR) programs, used them as a marketing tool to attract new users, and of course couldn't. avoid collapse. Drawing lessons from that, IMX's Stake mechanism has been designed with long-term sustainability in mind.
So what is a sustainable staking mechanism?
A staking mechanism is said to be sustainable when the stakers generate more value than the cost of staking in the long run. However, as of now, there are only two ways to generate staking rewards. Stake generates more tokens, leading to inflation for token holders or the staking rewards generated from protocol fees.
Based on the relationship between stake value and cost, there are currently 3 popular staking mechanisms:
- Stake to use utility - If staking is required for the product to work, then it is likely to be sustainable because without staking, there will be no utility to use the token.
- Inflationary Stake - If staking results in the issuance of more tokens that grow faster than the value created (if any value is created), the long-term sustainability of the reward will be a big question.
- Protocol Aligned Stake - If staking adds value indirectly (i.e. staking is not required to maintain protocol functionality), but rewards are funded from protocol operating costs (from active transaction). As long as the protocol is self-sufficient for its operations, this staking method is sustainable.Using the right staking mechanism will bring long-term benefits to both the protocol and its users.
The role of Staking in the IMX ecosystem
Staking plays an important role in the Immutable X ecosystem by increasing the utility of IMX, thereby becoming a stronger incentive to attract more adoption. And create a cycle like this:
- Larger trading volume generates more staking rewards
- More staking rewards increase the utility of IMX
- The utility of IMX is expanded leading to many games, investors, traders, markets participating in the IMX ecosystem
- More games, investors, traders, markets participate in creating greater trading volume
IMX Staking Instructions
To qualify for staking rewards first, you need to do the following steps:
- There is an amount of IMX staked here.
- Trade at least 1 NFT on Immutable X platform in one staking cycle through "marketplaces" like Immutable X Marketplace, OKX, Token Trove, Mintsmeet.
Step 1: Visit the Staking page and connect the wallet.
Step 2: Deposit money to Layer 2 to stake.
Step 3: Stake IMX
Step 4: Make at least one transaction on Immutable X Global Orderbook in 1 staking epoch.
Step 5: Receive the reward (Token will be deposited into the wallet after the end of each reward epoch).
Step 6: Unstake IMX (the token will be unlocked at the end of the epoch).
The reward will be calculated based on the amount as well as the time you stake IMX in each cycle. Each cycle lasts 14 days and is divided by the following formula:
Reward= (Amount of IMX you stake * stake time in a epoch)/ (Total amount of IMX staked in the pool for that epoch)
Issuance in the first epoch will target 5% rewards rate with 30% of stakeable supply staked. Also the stakeable tokens held by the Foundation and Immutable will not be staked to reduce the cost of this initiative.
The market overview is still quite bleak but this could be an opportunity to accumulate in a good price zone and IMX holders can take IMX to stake to optimize profits.