Immutable (IMX)

gaming Sep 02, 2024

Immutable, in simple terms

Immutable is a Layer 2 solution on Ethereum that seeks to address web3 gaming challenges.

As a Layer 2, it's designed to scale Ethereum by offering:

Lower transaction fees
Increased transaction volume
Improved user experience

In web3 gaming, it is especially important that transaction fees are low and that the net is able to handle a large transaction volume.

If not, the user experience will be that of an expensive and slow network.

Slow and expensive games are unable to compete with traditional web2 gaming so its vital for web3 adoption to fix these issues.

Immutable address them by deploying ZK-rollup technology.

Rollups reduce fees and allow for higher transaction volume by batching transactions together into one.

Read more about rollup technology in the Layer 2 section, see especially the article on Polygon.

The Immutable ecosystem looks like this:

Immutable focus on:

Player experience
Revenue engine (allowing for trading)
Game development

The infrastructure components are:

Immutable X, powered by Starkware
Immutable zkEVM, powered by Polygon

Immutable X was launched in 2021 on Ethereum and was the first L2 optimized for NFT marketplaces web3 gaming.

In short, it enables developers to easily build NFT marketplaces and blockchain games.

The launch of Immutable zkEVM began in early 2024 and will continue until early 2025.

It is a blockchain powered by PolygonZero which makes it EVM-compatible.

Being a part of the EVM ecosystem is crucial given that the vast majority of dapps are EVM configured.

This basically just means that it is easy for dapps on Ethereum to migrate or be configured with the Immutable ecosystem.

The zkEVM chain is built to address the rising demand for blockchain game development.

Both X and zkEVM are built to optimize the on-chain gaming experience, but zkEVM has a stronger focus on the development of new games.

Adoption

The first and most obvious metric to look at is the number of games on the platform.

By number of games, Immutable is one of the largest players in the gaming sector:

It has more than 380 games signed up to it.
The network has the largest gaming token (IMX) in terms of market cap.
It has formed some significant partnerships in recent years which indicates further adoption.

Number of games

Immutable hosts more than 380 games.

In addition, it has been the fastest-growing chain in 2024 in terms of number of new games.

Here's an overview of the number of new web3 games added across chains in Q1 & Q2 2024:

source: bigblockchaingamelist.com

In both quarters, Immutable was the leading single-chain with about 78 new additions in total.

Furthermore, the Immutable ecosystem has announced several games in development.

The activity confirms Immutable as one of the leaders in the industry. Later, we will look more specifically into the number of active on-chain users.

Partnerships

Immutable has partnered with some impressive names in the industry.

In 2023, they partnered with Amazon and Ubisoft.

This summer, they partnered with DM2C Studio and AQA

The goal of the partnerships is to expand web3 gaming in Japan.

The partnerships will focus on marketing for upcoming titles, development of existing games, and cross-platform references.

The Future of Immutable

2024 has been a good year for the blockchain gaming industry.

At its forefront, Immutable has seen substantial growth.

It was the single blockchain that added the most games in Q2 2024.

Let's look at the total active users in web3 gaming to say something about the potential of Immutable.

Below, you see the number of unique active wallets in the whole gaming sector for the past year:

It increased from 830,000 in August 2023 to 4,600,000 in October 2024.

That is an increase of about 5.5x

And note that the trend remained strong through the general bearish sentiment from March to September in 2024.

To see how Immutable is doing, we have to include the number for both Immutable X and zkEVM.

These are the numbers for Immutable X:

These are the numbers for Immutable zkEVM:

As I discussed earlier, Immutable zkEVM has recently been launched and that is the reason why the number of users spiked in April 2024.

In October 2024, Immutable has about 200,000 unique active wallets.

That makes up about 4.7% of the total number of unique active wallets in web3 gaming.

Let's say this number remains constant and the number of total active users in the gaming sector increase 6x in 2025.

That leaves us with 25.2M active users in total, and Immutable with 1.18M users.

As the launch of Immutable zkEVM is still underway, it will be too speculative to try to predict how Immutable will do.

Still, we should consider the following facts:

Since 2021, Immutable has been the only infrastructure used by the Immutable ecosystem. In other words, all the activity on the platform happened there.

The highest number of unique active wallets was in January 2022, with about 8,300 active wallets:

Compared with the number of users on the new zkEVM, this is nothing.

In just five months, there were already more than 200,000 unique active wallets on the zkEVM chain.

This has also impacted the market cap of Immutable:

It spiked in April and corrected in June. It has since begun a new uptrend.

I believe that the ground is set for a dramatic increase in market cap due to the following factors:

The large user base on Immutable zkEVM.
New partnerships with big names in North-America and Japan.
The gradual adoption of web3 gaming which looks like it will continue moving into 2025.