Immutable X is an Ethereum layer 2 for NFTs and a popular scaling solution for what many consider to be the next generation of crypto games such as Illuvium, Ember Sword, and Guild of Guardians.

The Immutable ecosystem is underpinned by the IMX token, for which the dominant use cases are to bootstrap and govern the network and as a medium of exchange. Recently, there have been several developments within the Immutable X ecosystem that have provided additional utility but have also affected the token’s supply schedule. As such, this report will be broken down into 3 sections:

The tokenomics and supply schedule.
Staking and daily rewards.
Insights into the value accrual mechanisms for the token.

Tokenomics and Supply Schedule

While a token’s utility should never be disregarded, studying its supply schedule in a vacuum can often yield important insights into how it will perform in a given market.

IMX has a dynamic release schedule due to a large portion of the supply being devoted to ecosystem development. With a total supply of 2B IMX, 52% of this is being used to incentivize network usage via grants and rewards schemes and thus, the supply schedule is affected by protocol adoption. Between May and September this year, 3.9M IMX was distributed through these incentive schemes. However, this was a drop in the ocean compared to the token unlocks coming in November.

As we can see in the chart above, a sizable amount of tokens are “awaiting cliff.” This means that while their unlock length was 2.5 years, the first 12 months have been accumulating to be distributed at the end of the first year when the cliff ends. This would have resulted in ~220M tokens being unlocked in November — effectively doubling the