Key Insights
- Immutable zkEVM experienced significant growth in user activity, with daily active addresses increasing by 91,900% QoQ, driven by the launch of the IMX Ecosystem Foundation’s ‘The Main Quest’ rewards program, offering up to $50 million in rewards, alongside the introduction of Dedicated zkEVM chains to attract game studios.
- Immutable X saw daily NFT buyers increase by 56% QoQ, from 1,500 to 2,300, while daily sellers saw a more modest 18% QoQ rise, from 1.7k to 2k. This increase in buyer activity was influenced by competitive pricing in the NFT market and key NFT collections, like Guild of Guardians, which saw $11 million in sales in May.
- Despite increased activity across Immutable platforms, IMX’s circulating market cap and price declined by 50% and 53% QoQ, respectively, in line with the broader altcoin market contraction
- Immutable announced the launch of Immutable Nexus, an interconnected ecosystem of customized blockchain solutions for game studios, designed to enhance shared liquidity, security, and consistent functionality across chains.
Primer
Immutable is an Ethereum Layer-2 scaling solution for NFTs and gaming economies, providing zero-to-minimal gas fees for minting and trading NFTs, fast transaction settlements, and scalable gaming infrastructure. Founded in December 2018 by James Ferguson, Robert Ferguson, and Alex Connolly, Immutable raised $2.4M in a seed round on July 9, 2018. Since then, the company has raised over $314 million from global investors. The protocol aims to address critical challenges in the NFT ecosystem, such as scalability, user experience, and developer efficiency, without sacrificing Ethereum’s security and decentralization, through its two core products: Immutable X and Immutable zkEVM.
Immutable X is an Ethereum Layer-2 scaling solution that leverages zk-rollup technology from StarkWare to enable high throughput and cost-effective NFT transactions. By batching large numbers of transactions and submitting validity proofs to Ethereum’s Layer 1, Immutable X can handle over 9,000 transactions per second with zero gas fees for minting and trading. Immutable zkEVM extends the capabilities of Ethereum’s Virtual Machine (EVM) by integrating zero-knowledge proofs (zk-proofs) to enhance scalability and security, enabling developers to build decentralized applications (dApps) that can process a high volume of transactions with reduced computational overhead and improved privacy.
The IMX Ecosystem Foundation offers financial and strategic support to projects within the Immutable ecosystem, allocating funds from a $200 million pool to assist Web3 gaming and NFT initiatives.
For a full primer on Immutable, refer to our Initiation of Coverage report.
Website / X (Twitter) / Discord
Key Metrics
Performance Analysis
Immutable X
In Q2’24, daily active addresses on Immutable X decreased by 37% QoQ, dropping from 21k to 13k, while daily transactions fell by 34% QoQ, from 229k to 151k. This divergence indicates increased transaction intensity among a smaller user base, a reversal from Q1’24, where active addresses spiked but had minimal impact on transactions. Key drivers of Immutable X’s Q2’24 user activity included:
Immutable X’s Q2’24 user activity was partly driven by:
- Gods Unchained: a free-to-play strategy card game, allowing players to collect, trade, and battle with ERC-721 tokenized cards. In Q2’24, the dApp averaged 900 daily active unique wallets conducting 10k daily transactions.
- Habbo X: a game that focuses on community building, interoperability, and play-and-earn mechanics. The dApp averaged 300 daily active unique wallets executing 1k daily transactions in Q2’24.
- IMVU: a 3D Avatar Social App that offers virtual reality experiences, virtual worlds, and free 3D chat. In Q2’24, the dApp averaged 350 daily active unique wallets conducting 400 daily transactions.
Daily NFT sales (USD) declined 6.6% QoQ from $600k in Q1’24 to $560k in Q2’24. In the same period, daily buyers increased by 56% QoQ, from 1.5k to 2.3k whereas daily sellers exhibited a more modest QoQ increase of 18%, rising from 1.7k to 2k. The disproportionate QoQ changes, with a higher increase in buyers compared to sellers and a decrease in overall sales value, suggest that more buyers purchased lower-priced NFTs. A trend driven by heightened competition among sellers and buyers seeking to capitalize on the IMX Ecosystem Foundation’s $50 million ‘Main Quest’ gaming rewards program, announced in April.
In May, Immutable experienced a surge in the number of buyers and sellers, driven by the Guild of Guardians NFT collection available on both Immutable X and Immutable zkEVM. The collection generated over $11 million in sales by the end of the second week of May. On June 19th, Immutable X recorded a peak of 18.7k buyers and 16.6k sellers; however, 91.1% of this day’s activity was identified as wash trading, a known concern the protocol has been working to address and not unique to Immutable X, as other prominent chains also exhibit wash trading.
Immutable zkEVM
In Q2’24, zkEVM user activity saw a massive surge. Daily active addresses rose by 91,900% QoQ to 282.5k, while daily new addresses grew 273,700% to 98.6k. Daily transactions also skyrocketed 14,500% QoQ to 792k. This growth was largely driven by Immutable’s April 10th announcement of Dedicated zkEVM chains, offering customized blockchain solutions for game studios. The initiative, combined with Immutable’s public zkEVM chain and a $50 million gaming rewards program,, incentivized increased user participation across games like Pixelmon, Illuvium, Guild of Guardians, Space Nation, and MetalCore.
Prior to 2024, Immutable zkEVM exhibited no activity, as access to the network was gradually granted in the first quarter of 2024. On January 29, select game studios and partners were given access to deploy custom smart contracts to zkEVM mainnet. On June 25, Immutable announced support for the ERC-1155 token standard, enabling developers to create both fungible and non-fungible tokens within a single smart contract.
Market Cap and Price
Despite increased user activity on both Immutable X and Immutable zkEVM, IMX’s circulating market cap and price fell by 50% and 53% QoQ, from $4.4B to $2.2B and from $3.1 to $1.45, respectively. As a result, IMX’s market cap rank dropped from 29 to 39. While IMX’s circulating supply and price significantly contracted in Q2’24, the broader altcoin market also experienced similar declines.
Qualitative Analysis
Network Updates
Immutable zkEVM
On January 29th, Immutable zkEVM provided select game studios and partners with early access to its mainnet, enabling them to deploy custom smart contracts. This phased rollout ensured a controlled environment for early adopters to experiment and deploy.
On June 25th, Immutable zkEVM launched support for the ERC-1155 token standard. This update enhances the developer experience by enabling the creation of both fungible and non-fungible tokens within a single smart contract, streamlining game asset management for developers.
Immutable Nexus
On April 10th, Immutable announced the launch of Dedicated zkEVM chains, designed to offer game studios customized blockchain solutions. Together with the public Immutable zkEVM blockchain, these dedicated chains form Immutable Nexus, an interconnected ecosystem. This ecosystem provides shared liquidity, enhanced security, and consistent functionality across chains, facilitating seamless user experiences and creating robust economic frameworks for web3 gaming.
The Main Quest Rewards Program
On April 25th, IMX Ecosystem Foundation launched the The Main Quest ecosystem rewards program, offering up to $50 million in rewards to incentivize players engaging with games in the Immutable ecosystem. The program allows both new and existing players to earn rewards by completing quests, playing games, and owning digital collectibles
The first phase of the program features notable projects, including Guild of Guardians, Space Nation, Blast Royale, Metalcore, The Bornless Game, Pool Masters, Heroes of Crypto, Treeverse, Pixelmon, and Illuvium. To participate, players must be registered with Immutable Passport. The program also mentions that players from certain jurisdictions may be restricted from eligibility
Token Unlocks
On May 5, 2024 9.9M IMX was unlocked, representing 1% of the total tokens initially allocated to vesting schedules during the token generation event. The breakdown is as follows:
Private Sale: 9.5M IMX unlocked, which is 0.475% of the total token allocation.
Project Development: 10.4M IMX unlocked, which is 0.521% of the total token allocation.
Partnerships
GAM3S.GG
On April 6, 2024, GAM3S.GG and Immutable announced a strategic partnership aimed at integrating key Immutable functionalities into the GAM3S.GG platform. The collaboration includes the integration of Immutable Passport and Immutable Checkout, funding exclusive rewards, and questing services for games on Immutable zkEVM, and incorporating the G3 token to enhance utility for gamers.
Spielworks
Immutable announced a strategic partnership with Spielworks on May 21, 2024 to enhance user acquisition and engagement for web3 games through Spielworks’ Wombat platform and AtomicHub marketplace. This collaboration will integrate Immutable zkEVM, Immutable Passport, and Immutable Checkout into AtomicHub, support additional rewards and marketing for games on Immutable, and expand distribution channels via Spielworks’ Wombat App.
Closing Summary
In Q2’24, Immutable zkEVM saw significant growth in user activity, with daily active addresses rising by 91,900% and daily transactions increasing by 14,500%. This growth was driven by zkEVM’s recent launch and the $50 million Main Quest Rewards Program, which incentivized player engagement. The launch attracted users and developers, many of whom migrated from Immutable X to take advantage of zkEVM’s enhanced scalability, lower fees, and EVM compatibility.
While zkEVM experienced rapid growth, Immutable X saw a 37% decrease in daily active addresses and a 34% decline in daily transactions, though daily NFT buyers on Immutable X increased by 56%. Additionally, the quarter featured the introduction of Immutable Nexus, new strategic partnerships with GAM3S.GGand Spielworks, and the support for the ERC-1155 token standard to provide greater flexibility for developers.
