Introduction

The crypto gaming ecosystem is filled with potential. Especially in the current bull market, the sector promises lucrative opportunities for those invested in it. However, navigating this space can overwhelm even the most enthusiastic participants, as it is a vast, ever-changing landscape brimming with new developments every day. The complexity is further compounded by the need to engage directly with the games to fully understand each token's value and potential intricacies. This requirement makes staying on top of every twist and turns a daunting, if not impossible task for anyone not dedicating their full time and attention to it.

Amid this backdrop of excitement and uncertainty, searching for a less volatile asset that largely tracks the success (or failure!) of crypto gaming becomes paramount.

This is where Immutable X (IMX) comes into play. As a large-cap gaming ecosystem, IMX has proven popular and much less volatile than most tokens in the gaming space.

In the following report, we delve deeper into Immutable X, exploring its fundamentals, market performance, and the unique position it holds within the gaming ecosystem, as well as some similar tokens.

About Immutable X

Overview

In simple terms, Immuxable X builds Web 3 infrastructure for gaming, to make it easier for developers to launch and scale their own Web 3 game. They offer the following products:

Player Experience

• Passport (New): Instant wallet onboarding
• Checkout: All-in-one transaction infrastructure

Revenue Engine

• Orderbook & Marketplace Network: Maximize distribution and demand for your assets
• Mint: Scalable NFT minting tools
• Trade: Reliable NFT trading endpoints

Infrastructure

• Immutable zkEVM (New): EVM ZK-rollup for games
• Immutable X: Optimized game-specific ZK-rollup

Developer Experience

• SDKs: Build and launch in days
• Developer Hub: Mission control for web3
• Blockchain Data APIs: Powerful APIs to manage your assets

Additionally, Immutable Games is part of the wider Immutable Group and develops and publishes Web 3 games, including the popular games Gods Unchained and Guild of Guardians.

From this wide product offering, there are a number of narratives that Immutable X can profit from:

• General gaming narrative
• Game-specific narrative for any game built on top Immutable X or by the Immutable Group
• Zk narrative
• NFT narrative
• Ethereum narrative

Immutable X has furthermore joined forces with Ubisoft’s Strategic Innovation Lab to create a better gaming experience for players as well as partnered with Amazon Web Services to improve their infrastructure offering.

IMX as Ecosystem Index

As mentioned above, Immutable X is an infrastructure or meta-play on the gaming ecosystem, rather than a single game itself. When looking at the most popular gaming ecosystems by market capitalization it comes in second only after Ethereum.

While more general-purpose chains like Ethereum, Polygon, and BNB have lots of other narratives going for them and gaming makes up only a fraction of what they are about, Immutable X is expected to correlate more closely with the movements of the general crypto-gaming market. When looking at the price performance of IMX since the beginning of 2023, it has furthermore outperformed most other top 20 gaming assets by market cap, apart from Ronin. The report deliberately looks at established mid- to large-cap tokens, as they tend to be more proven and low-maintenance and thus suitable for mid-term holds.

Other candidates include Ronin as well as Beam (formerly Merit Circle), although they have less market share of the overall gaming market as seen in the pie chart above. However, both already existed in the prior cycle, have shown strong performance in the last year, and are, in essence, also infrastructure providers with their respective chains. It has to be noted, that Ronin might be less broadly positioned, as much of its success is likely closely correlated to the success of its flagship game, Axie Infinity.

IMX Token

The IMX token is the governance and utility token of Immutable X. The core functionalities include mandatory IMX payments as part of the transaction fees (20%), a staking functionality for IMX holders, governance power, and IMX as the primary gas token in the Immutable zkEVM.

Smart money has been accumulating IMX since the end of last year, although starting from 10th February, there has been some minor profit taking. Overall, though, smart money still appears to be bullish.

With a market cap of roughly $5b and a fully diluted valuation of $7b, it is certainly not a hidden gem but has enough liquidity to be able to handle larger orders. It has to be noted, that roughly one-third of the token supply will be unlocking until the end of 2025, which could translate into selling pressure until then.

On the other hand, a large chunk of the token supply is held by treasuries of gaming projects building on Immutable X. Over 65% of tokens are held by Gods Unchained and IMX Project Development, with very low sell pressure expected.