Eight reasons why I am bullish about Immutable X
If you are new to NFTs and/or wonder why you should care about NFTs, I wrote a blog post Why NFTs are changing the world where I describe why I personally believe that NFTs are a game changer in the digital world.
I have been researching Immutable X for the past few weeks. And by researching I mean buying and minting NFTs and reading about it. As I am a diamond hand hodler who seldom sells anything, I cannot speak about selling NFTs or transferring Ethereum out from IMX to ETH mainnet. To my understanding, selling and cashing out should work well also.
What is Immutable X?
Immutable X (IMX) is a Layer 2 protocol for trading Ethereum NFTs. It uses Ethereum blockchain’s security and the trading happens using Ethereum cryptocurrency. The main improvements that IMX offer over Ethereum mainnet is low to zero gas fees and carbon neutrality.
Trading on IMX is simple. First, you need to connect your wallet on Immutable X’s own marketplace or on TokenTrove. You can use your Ethereum wallet you have been using in the mainnet (e.g., MetaMask) and your hard earned ETH. Registering a wallet creates a unique Immutable X key that will be linked to your wallet — this key is needed for holding IMX NFTs in your wallet. After you have set up the key you can just forget about it. While trading, you don’t even have to know the key exists.
8 reasons why everyone should take a look at Immutable X
So why exactly should you care about Immutable X? Why is it better than, let’s say Ethereum mainnet and OpenSea?
1. Gas!
On Ethereum mainnet the extra cost of buying and minting NFTs has become unbearable. In November, gas fees were averaging around $100-$200 which is how much extra you have to spend on the transaction per purchase! This may be fine when buying Bored Apes as it is only a small fraction of the price but not when buying cheap NFTs.
I have personally stopped buying NFTs on the mainnet because of the gas fees. I simply don’t want to spend that much extra just for ‘shipping’. I feel like many others have had the same sentiment — data from Dune Analytics indicates that the trade volume on OpenSea has been coming down in recent months as the price of Ethereum and the gas increased.
This is where the biggest selling point for Immutable X comes in: 0$ Gas fees! You read it right; no extra cost when buying NFTs on Immutable X. You can keep flipping NFTs on IMX and you spend $0 extra on gas. Infinitive value! And you don’t even need any extra tokens to pay the gas like in some other Layer 2 solutions and side chains. The transactions are truly gasless from the buyers point of view.
However, Immutable X isn’t completely free of gas fees. When buying NFTs from IMX marketplaces you will need to deposit Ethereum to your ‘IMX wallet’ from your ‘mainnet wallet’. The process is easy — just a couple of clicks and roughly 5 to 15 minutes of waiting. But you will need to pay gas for this transaction. The gas required is about the same sending an NFT to someone else (based on my personal experiments; though I have to admit I’m not 100% sure about this). It has been between $10-$40 (0.0025 ETH-0.01 ETH) for me but could be as high as $60 I’m guessing. Regardless, this is considerably less than buying or minting NFTs on the mainnet. And this is a one time fee assuming you deposit enough Ethereum that you don’t have to repeat the process any time soon.
When minting NFTs on IMX you usually pay for the minting on the mainnet. What happens here, to my understanding, is that Ethereum is transferred from one wallet to another and after this transaction goes through on the mainnet, the actual minting will happen on the IMX; the Ethereum ‘money’ transaction happens on the mainnet and minting on IMX. This requires you to pay a moderate gas fee that is approximately equal to sending money from one wallet to another — roughly $5-$10.
When all of this is said and done and the NFTs are on Immutable X, the transactions you do within Immutable X marketplace are free of gas. So overall, the extra ‘money’ you would have to spend on gas on the mainnet is considerably lower on Immutable X.
2. Easy to use
To me, this is the second most important part of the whole thing. It doesn’t matter if the gas fees are low if buying the NFTs becomes a chore. If it is too difficult to mint or buy the mass adoption will not happen and the demand for the NFTs will be small. It is obvious that easier it is to buy NFTs more buyers there are. So there cannot be too many hurdles when compared to the mainnet or other marketplaces.
First, you need to register your wallet, i.e., get the IMX key so your wallet can hold IMX NFTs. Habbo NFTs describes this process in detail — it just requires approximately ten clicks going back and forth between MetaMask and IMX. The whole process takes less than 30 seconds.
In order to buy NFTs, you need ETH in your ‘IMX wallet’. Overall, it is easy to deposit the ETH, it just takes a little while to get there. You will need to connect your wallet on IMX marketplace, go to your inventory and deposit. You confirm the deposit in MetaMask and wait for the transaction to go through. However, after the transaction is completed in the mainnet it takes five to fifteen minutes to have that ETH in IMX. The transaction time is the biggest drawback of the process.
As for minting, the process is basically the same as on the mainnet. At least with the few projects I have seen.
All of this adds up to a slightly slower process than on the mainnet for transferring the ETH. However, when you purchase the NFT, the transaction is instant. You get your NFT immediately! All of this adds up to an easy enough purchasing experience with the only minor drawback is the wait time when you deposit the ETH. Granted, it is not as smooth as on the mainnet but considering lightning speed, gasless transactions, I am personally impressed with the whole process.
But there’s going to be one game changer coming up soon that will make it even easier to purchase the NFTs: fiat bridge that allows users to use credit card to purchase NFTs. I will talk about this next.
3. Native fiat with MoonPay
https://twitter.com/Immutable/status/1466201337452916737
This is something Immutable X just announced! Immutable X is partnering with MoonPay! This will open the doors for credit card purchases on IMX. And with that, the barrier to entry is considerably lower and NFT mass adoption closer. Cheap NFTs that you can buy with credit card sounds like a win!
4. Projects on IMX
So far IMX marketplace consists of two types of projects: Profile picture projects (PFP) that have been popular on Ethereum mainnet, and play to earn games with their in-game items. The ‘CryptoPunks’ of IMX, i.e., the first PFP project of the platform is Moody Krows which has already traded with over $18,000,000 based on Immutascan. The two big play to earn games, Gods Unchained and Guild of Guardians have traded over $10,000,000.
There are also some ‘copycat’ projects from the mainnet as well. There’s already IMX Apes, IMX Punks and my personal favorite, IMX Kongz. Especially the first two are great entry level NFTs at the moment due to their low price. And with IMX Kongz, since I missed the real Kongz, I get to try again with the IMX counterpart. But there are also several novel projects like Bad Grandma (I’m planning on introducing my and my wife’s parents to NFTs with Bad Grandma NFTs during the holidays), Battle Catz and Moody Krows.
But the big news on this front is VeVe collectibles who have announced that they are moving to Immutable X. As VeVe has some very cool NFTs, for example, from Disney including Star Wars and Marvel NFTs, they will be a major player on that platform. They also teased about a Dragon Ball Z NFTs on IMX.
The main reason I haven’t personally delved into VeVe is the fact that I don’t like their ‘in-game currency’ feel and the fact I am buying the currency through Apple. If this changes when they migrate to Immutable X, I will most definitely be buying some Marvel and Star Wars NFTs!
5. OpenSea integration
There has been lots of rumours and actual posts about OpenSea integrating IMX to their marketplace. OpenSea released a statement all the way back in March 2021 that they are planning on doing this. Recently, Battle Catz posted on their discord that in a call with Immutable X they were informed that the integration is very close to being finalized.
OpenSea is the biggest NFT marketplace in the world at the moment so when it starts selling gas free NFTs, the audience for IMX NFTs will grow dramatically. It will be huge for Immutable X and for the NFTs that are currently on IMX.
And it could be life saving for OpenSea. With Coinbase NFTs on the horizon and Ethereum based NFT sales suffering from crippling gas fees, OpenSea will need to figure out how to update their strategy. It is not far fetched that they would start pushing zero gas NFTs with fiat purchases — and this is what IMX is offering. So it would make sense that OpenSea would start aggressively promoting IMX based NFTs to their users!
6. Cheap NFTs
One thing that zero gas fees offer is sub $1 NFTs. These are crucial for play to earn games like Gods Unchained. This can create new business opportunities for NFT creators where you don’t have to rely on exclusivity and scarcity and sell NFTs for hundreds to thousands of dollars but instead you can rely on volume.
In addition, selling common items for games is now possible as well. You can have 100,000 common chairs and sell them for $0.1. If there’s any gas fees, selling and buying these items would not be feasible.
Finally, what I feel the NFT space needs to reach mass adoption are entry level NFTs. For me, the entry was through NBA Top Shot where I spent $19 for a Zach LaVine moment. The barrier for entry when you have to pay hundreds of dollars for something you don’t really understand is currently too big for many. With cheap profile picture NFTs priced around $20, Joe Everyman can buy their first NFT, use it as a profile picture and have an entry to the NFT space.
7. Backed by Ethereum
Ethereum is the biggest NFT blockchain in the world. It is also very secure. What this means is that there is more money and more ‘Ethereum rich’ people to buy NFTs than in other blockchains. It is easier for many to spend a bit of Ethereum that they have than move their crypto to another blockchain, say Solana or Tezos, and buy NFTs there.
However, the current state of Ethereum doesn’t work well with NFTs — gas fees and the carbon footprint are making life difficult for NFT buyers. I don’t like the fact that I need to keep Ethereum GasTracker open every time I go buying NFTs.
But IMX brings the best of both worlds! Having the second biggest blockchain when looking at the market cap, using Ethereum‘s security and eliminating the gas fees and being carbon neutral, we are looking at the solution that answers all of these major issues.
8. Carbon footprint
I want to emphasize this point one more time. Common criticism toward NFTs especially on Ethereum is the carbon footprint. Ethereum is not great for the environment, to put it mildly. However, Immutable X promotes itself as the carbon neutral option due to the way it processes the transactions.
I’ve used the following analogy in a few interviews I’ve given: I see the carbon footprint of NFTs similar to the carbon footprint of cars. First, tens of years ago, no one even knew or realized that it is a problem. Fourty years ago cars were really bad for the health and for the environment. As consumers started realizing the problems, research started and fuel consumption was improved. Next came hybrids and now electric cars. For crypto and NFTs I believe in a similar process: due to the pressure from the consumers, the technology will keep improving and the carbon footprint will be less of an issue going forward. Immutable X is a good example of this process.
Reasons to be bearish
There are a couple of reasons to be, if not bearish then at least cautious towards Immutable X.
We are very early
The main thing is that it is new and not yet established. The larger masses even from the Ethereum NFT world haven’t found IMX yet and many of the projects are still learning the tech. IMX market is still quite slow and number of transactions per day is still quite modest.
Developers are still learning
I was minting on a couple of different sites and I have seen some problems. Since the smart contract starts the minting by sending ETH from the buyers wallet to the project’s wallet, and the minting happens only after that transaction completes, there have been cases with hugely popular mints that ETH is moved but you do not get your NFT as the collection is sold out. ETH side doesn’t know the status of IMX side. There are probably ways around this, for example, with server side logic. However, if these types of issues persist, potential buyers may become afraid of trying out IMX and stay away.
It is worth noting that in all of these cases that I’ve been involved in the devs have returned the Ethereum back to the buyers when they didn’t get the NFT. In addition, these mints didn’t really suffer from gas wars and the money lost on gas was around $10-$20 dollars per person (not per NFT!).
Backed by Ethereum
If Ethereum fails, so does IMX. The two are tied together. Also, if some other Layer 1 blockchain comes out with a better solution for NFTs, IMX may suffer due to the fact that it isn’t a native solution and therefore requires extra steps to deposit crypto and buy the NFTs. In addition, if ETH 2.0 addresses the issues of ETH 1.0, it may become the main solution for NFTs again. I see this very low probability though.
Scaling
On their website they state that Immutable X is able to scale well with up to 9,000 Transaction per Second. As for the trading within IMX, that may very well be true.
However, we haven’t seen yet how it scales. So far what I have witnessed is some issues and slowness in the minting and revealing process (update the metadata). In addition, depositing ETH is slow as well. If there would be 10x drops per day, and 1,000x more users, I would love to see how they can handle that. Especially, when OpenSea integrates IMX NFTs and the number of new projects blow up, there may be bottlenecks with both minting and revealing the NFTs, and even moving ETH around.
Conclusion
To me personally, researching Immutable X has been extremely fun! It feels like Spring 2021 all over again when PFP projects and NFTs were new (to me) and it felt like we were super early. We are still early, by the way! But when I am buying NFTs on IMX it really feels like we are extremely early and there are cheap bluechip projects everywhere.
I will keep looking out for exciting projects that are dropping on IMX. In the end, the savings I have had in gas fees when compared to NFTs on the mainnet have been massive so I am not looking back. I might mint and buy something on the mainnet as well but I will be doing most of my business on Immutable X from now on.
This blogs contains only my personal opinions and do not reflect my employers opinions or what we are doing in the project I am working on.
