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IMX Knowledge Base
4/14/2023

Immutable's Liquidity Strategy in Web3 Gaming

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TL;DR

In our latest community town hall, Immutable co-founder and President, Robbie Ferguson, shared Immutable’s vision for a future where NFTs will tokenize the world and how Immutable’s liquidity strategy will be the core component in making this future a reality. 

This article serves as a summary of Immutable’s liquidity pillar and strategy for winning in web3 gaming and beyond.

Tokenizing the world

NFTs fundamentally have the potential to tokenize the entire world. Our belief is that gaming will be the first industry to experience and drive this revolution. In the long term, this presents an opportunity far greater than what has currently been captured, as it allows for everything to become truly digital and ownable, with better utility for mainstream users. This captures potentially thousands of trillions of dollars, including everything from physical assets, to centralized finance products, to intellectual property.

Immutable’s approach to capturing this opportunity consists of three main pillars:

  • Content 
  • Users 
  • Liquidity  

The Liquidity Pillar: Solving for Liquidity Fragmentation

To realize this vision of a tokenized world, we need to solve the pressing problem of liquidity fragmentation. Liquidity fragmentation occurs when the value of an asset is split among multiple marketplaces and contexts. For example, by unlocking a skin in-game, owners have to choose which marketplace to list it on for sale, e.g. Gamestop or Opensea. Potential buyers only have one location to purchase that asset i.e. the selected marketplace by the initial seller. This drastically handicaps the buying and selling experience of any digital asset creating artificial walls between the buyer and seller and, therefore, restricting a trade.

The liquidity problem in web3 gaming today is made up of three parts:

  1. Fragmented wallets: The user-experience for creating and using multiple wallets across different ecosystems is gated and too complex. This is addressed by the upcoming launch of Immutable Passport. For more information check out our blog post on Immutable Passport - Your Passport to the Future of Gaming). 
  2. Fragmented marketplaces: Buyers and sellers can't match across different frontend marketplaces, leading to fragmented liquidity.
  3. Fragmented chains: Liquidity is further fragmented across different L1’s and L2’s. Currently, every blockchain is an isolated network of trades, users and wallets.

Immutable’s liquidity strategy is focused on solving the liquidity problem to ensure that users get the best price for their assets, no matter where they trade, and Immutable’s Marketplace ecosystem operates as efficiently as possible.

The solution to fragmented marketplaces: The Immutable Global Orderbook

Immutable’s Global Orderbook is an integral piece of our long-term liquidity strategy. This marketplace network enables users to sell an asset anywhere, on any marketplace, in-game, or any other context. It also enables all participants from listers, to buyers, to creators, to set and take their own fees.

In the past year, Immutable has grown from 2 connected marketplaces to 14+ marketplaces building on Immutable including Gamestop, Rarible and TokenTrove. Today, half of all trades on Immutable are filled on non-origin marketplaces, meaning that games and marketplaces building on the Immutable platform experience doubled liquidity as a result of the Immutable Global Orderbook.

Immutable’s vision is to bring liquidity together for differentiated assets across any context, any marketplace, and any user wallet. In doing so, we will be able to provide an exceptional user experience and the best possible price with the guaranteed security of Ethereum. This infrastructure is what will unlock the potential of an entirely new world across gaming and industry verticals, and become a multi-trillion-dollar market owned by customers rather than businesses.

Immutable solution to fragmented chains: Cross-Rollup Liquidity

Gaming alone will require hundreds of Layer 2’s to scale Ethereum. As an illustrative example, a AAA Game Studio entering web3 may require their own scaling chain. We need to ensure that all of their trades and funds can instantly and atomically connect with any other trader across all rollups on Immutable. To accommodate this, we are building a universe of trades that unifies liquidity, not just assets, across Polygon, StarkEx, and our custom zkEVMs. By unifying liquidity across all these platforms, we will be able to provide seamless trading experiences for gamers, across games and marketplaces.

Conclusion

Immutable’s liquidity strategy is the core reason why the Immutable Platform will form the fundamental infrastructure for mainstream adoption of web3 in the next decade and beyond. The combination of the relationships Immutable is building with games and players, with the launch of products like Immutable Passport and impact of Immutable’s Global Orderbook, will establish Immutable as the most effective and efficient ecosystem for trading digital assets with the best experience for players.

You can watch the full townhall event on the Immutable YouTube channel. Join our community to stay up to date and never miss exclusive events like this!

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