Build hyper-scalable games, applications, and exchanges on Ethereum
Immutable X is best described as an Ethereum layer-2 solution built specifically for the creation and transfer of non-fungible tokens or NFTs. More importantly to create the exchange infrastructure for developers building NFT focussed dapps to provide high-quality UX to users.
The team at Immutable believes in Ethereum and its power. Therefore they are not trying to create a competitor, but instead offer a solution, one much welcomed by Ethereum and Vitalik himself, by utilizing a technical solution called rollups.
Immutable taps into the Ethereum blockchain and uses its security, custody, and decentralization of the NFT. They consider this a better solution than to let people use a less secure blockchain or sidechain. Immutable offers two systems, and developers can choose which one they want to use.
ZK-Rollups and Validium are accessible via a system known as Volition, and Immutable are getting started by offering maximum scalability via Validium to allow applications to scale NFTs to the billions of people, all while remaining on Ethereum.
Whenever you mint or trade an NFT on Immutable X, you pay zero gas, and the validity of all transactions is directly enforced by Ethereum’s security using zero-knowledge proofs and represents the first layer 2 for NFTs on Ethereum.
For developers, it means building dapps and marketplaces that offer users the benefits above plus the security and reliability of Ethereum.
What are rollups?
Decentralized Finance (DeFi) and yield farming increased use cases and usage of dapps resulting in more smart contracts being deployed to the Ethereum network. As a result, the external smart contract calls more than doubled between the start of 2020 and August 2020.
Simply put, Ethereum alone cannot support the growing number of applications running there as more attention brings more on-chain activity which increases fees and slows the confirmation time of a transaction. The resulting larger fees increase the costs for people using ETH as a simple payment method or using other dapps, some of which may only operate at an optimal level with lower fees.
A rollup allows off-chain aggregation of transactions inside an Ethereum smart contract, which reduces fees and congestion by increasing the throughput of the blockchain from its current 15 transactions per second (tps) to more than 1,000 tps.
The concept of rollups dates back to 2014, described as “shadow chains” by Ethereum co-founder Vitalik Buterin. As developers failed with solutions like Plasma, they have been led back to shadow chains — now known as rollups.
In essence, rollups add an extension to Ethereum that allows the batching of transactions to be processed quickly and within the Ethereum smart contract that will be settled on the main Ethereum blockchain at a future point. Giving users peace of mind and the ability to carry on with their day whilst the work happens in the background.
Think of the way that your debit card or credit card operates when moving funds. These days it’s possible to push your money through several applications within a few minutes. For example, from your fiat bank account to a top-up card like Revolut or Monza on to an exchange like Coinbase. These transactions seemingly occur in seconds but there are processes happening in the background that take longer. But as a user, you just need peace of mind that the money is available and safe.
Vitalik Buterin sees Rollups as the scaling strategy for the near-term, a sentiment that has resonated with a lot of the Ethereum ecosystem with many of the top dapps starting to make the switch.
Validium and ZK-Rollup
In summary, ZK-Rollup is a layer-2 scaling solution in which all funds are held by a smart contract on the main chain, while it performs computation and storage off-chain where the validity of the side chains is ensured by zero-knowledge proofs. ZK-Rollup has the same security guarantees as to the underlying L1 (i.e., Ethereum), the potential to produce blocks in under a minute and increase throughput to over one thousand transactions per second.
Validium is just ZK-Rollup with off-chain data. Validium’s mechanism is very similar to that of ZK-Rollup, the only difference being that data-availability in a ZK-Rollup is on-chain, while Validium keeps it off-chain. This permits Validium to achieve considerably higher throughput — but this comes with its own issues, discussed in more detail here. As previously mentioned, Immutable will launch utilizing the Validium system.
For builders, Immutable X provides a solution that can offer users up to 1000 tps and zero gas fees for minting and exchanging NFT assets. This is great news for those looking to extend the play-to-earn model in their dapps as restrictive fees for creating and moving assets are removed allowing creators to sell lower value items with zero fees to buyers.
When compared to platforms built on Ethereum where creators pay gas and minting fees and buyers also have to pay gas fees the Immutable proposition feels very timely and can seemingly help Ethereum dapps realize their true potential.
Ethereum Matters to Immutable
Ethereum is still the largest smart contract blockchain in the world and has built up a huge network. It is the platform of choice for both users and developers with comprehensive ecosystem support for exchanges, wallets, and fiat providers – even regulators are familiar.
Immutable X lets projects stay on Ethereum while massively boosting their scalability and liquidity as they believe that building all this infrastructure from scratch while Ethereum continues to improve would be wasteful. They think that Ethereum best represents the philosophy of decentralized asset ownership as it has prioritized decentralization and network health over short-term scalability upgrades since inception.
At a time where NFTs are booming and interest has never been higher in digital collectibles in all shapes and sizes Immutable X is trying to provide the solution, many popular NFT marketplaces are seeking.