We compete with Web2’s ‘exploitative ownership model’: Immutable co-founder

Immutable co-founder Alex Connolly breaks down what drives the firm’s quest to empower Web2 gamers with Web3 rails

article-image

Immutable co-founders, James and Robbie Ferguson | Source: Immutable

share

Web3 gaming company Immutable has established itself as a major player in the blockchain space. 

The Sydney startup places a strong emphasis on layer-2 solutions to improve scalability and affordability within the Ethereum NFT ecosystem — critical aspects to any smooth gaming experience.

After five years of operation, Immutable considers Web2 its primary competitor over any crypto peer.

In March, the firm teamed up with Polygon to streamline onboarding processes for game studios and developers keen on enabling crypto in their products.

Alex Connolly, co-founder of Immutable, explained the endeavor to create a gaming ecosystem centered around Ethereum and Polygon’s zkEVM technology that can stand up to Web2 gaming’s best. 


Blockworks: How does zkEVM utilize zero-knowledge proofs to enhance transaction speeds and reduce gas fees?

Connolly: zkEVM is the holy grail of Ethereum scaling because it combines the EVM environment, which lets you run Ethereum smart contracts. So nine out of the top 10 chains are all EVM chains, which means that developers that write Solidity smart contracts, they’re used to the developer tools. There are thousands of people who already know how to program for those chains, as opposed to new chains like Aptos or Sui, where you need to learn a new language, or where the execution environment is really different. 

So you get access to the same Ethereum environment. But if you use Ethereum itself, you’ll find that transactions are slow and costly, which is impactful for domains like gaming. Some chains take this approach and they do a very low-cost EVM chain where it looks like Ethereum, but you can do faster transactions. That comes at a big trade-off because the security and the decentralization of the chain is heavily reduced. 

What zkEVM lets you do is have the same EVM execution environment with high speeds, with the security of Ethereum. The way you do that is through a rollup where you batch a number of transactions together, generate a proof that those transactions represent a valid state change, and then publish that proof to Ethereum layer-1. 

A smart contract on Ethereum layer-1 verifies that proof. Let’s say you have ETH on layer-1, you move it into a zkEVM on layer-2, you can interact with layer-2 smart contracts, you can go participate on that chain, and then you can bridge that ETH back to layer-1 and you won’t have to worry about it being stolen by a malicious chain.

Blockworks: What is the distinction between Immutable X and Immutable zkEVM?

Connolly: Immutable X was our first application-specific rollup. That is basically a rollup that doesn’t support all the functionalities of the EVM, which is the smart contract execution environment. Immutable X only supports exactly the things that you need to do to build a game. So it supports trading, minting and transferring NFTs. And it supports all those things in a hyper-optimized way. It’s just an API interaction with immutable and it’s built on Stark technology. 

Immutable zkEVM offers an environment to developers which is more flexible. You can have custom smart contracts, it’s more composable, you can interact with other people’s smart contracts. It has slightly less performance because it has to cover a wide variety of customer interactions. But at the moment, Immutable offers both to developers.

Blockworks: What are some lessons learned from the architecture of Starkware that may have influenced your approach?

Connolly: One thing that we definitely learned from Starkware is that many customers only need those basic functions, so they need minting, trading and transferring. Immutable X is perfect for them, because it means that you can build a game really simply and have access to amazing scaling. 

What zkEVM gives you is compatibility with Ethereum which means that for a lot of games that are already on Ethereum, or Polygon or Avalanche, it’s much easier for those games to come and take advantage of the rest of the Immutable platform without having to leave the EVM behind. 

Blockworks: Does the concept of superchains factor into Immutable’s framework and what role do they play in enhancing scalability?

Connolly: “Superchains” is not a very well-defined term as things stand. There are a lot of people talking about infrastructure for spinning up new additional app chains (application-specific blockchains). In our context, a particular game might want or need its own chain or rollup because it needs either some degree of customization, or it needs its own sort of horizontal scale, like it doesn’t want to compete for block space with any other game. 

Alex Connolly, Immutable co-founder

We believe there is a potential future for app chains and more customized blockchains. At the same time, most games at the moment don’t need their own chain, in terms of their scaling needs. And in terms of customization, they’re actually better off benefiting from the network effects of building on a shared chain. So when you build on Ethereum, there are lots of users that already have ether in their wallets. 

Most games in our view should start on a shared chain and eventually, when they actually have mainstream traction, that’s then the point where they go to their own app chain. 

Blockworks: In what ways does Immutable plan to further expand and evolve its offerings to meet the needs and demands of the community?

Connolly: The opportunity for games to have their own chain is incredibly exciting. But to get it right, you need a few things. Firstly, you need the demand and you need people to want to use the block space on that chain. Secondly, you need a user experience that actually makes sense. 

Imagine if you’re a gamer, and you have a Call of Duty chain, World of Warcraft chain, a FIFA chain and then you have a wallet on each of those chains. It sounds complex even just describing it, let alone for average people who are interfacing with it. We operate in a unique position in the industry, in that we both offer technology at the rollups layer with Immutable X and Immutable zkEVM. And also we offer up-the-stack products like Immutable Passport and Immutable Checkout, which help developers build games that make sense to Web2 players. 

We’re working with the Polygon team to offer additional app chains using Polygon supernets. We are in a position to make sure the user experience of interacting across those chains is smooth and makes sense to gamers. 

Blockworks: Who do you consider key competitors offering similar solutions to the community?

Connolly: By far our biggest competitor is the Web2 gaming industry. We want everyone who builds Web3 games to be using Immutable products. But realistically, our competition is the exploitative ownership model of Web2 games where you rent items instead of owning them and you can’t sell the things that you spend your money on in games. 

What we need to do to be successful there is to demonstrate that blockchain games have the capability to actually add value to players’ lives, not as a theoretical investment vehicle. But as, “Hey, when you buy something in a game, we believe that you should own it.”

Blockworks: Are you using artificial intelligence tools to improve your offerings?

Connolly: We have our own studios, which helped to produce some of the best content in the space for our platform with games like God’s Unchained, Guild of Guardians and Shardbound. In those games, we definitely use AI for things like art and game interactions.

On the platform side of things, I think we use AI in a more traditional way in terms of a SaaS technology company where we can optimize our products across the board. As Web3 gaming takes off and when we have millions of users using products like Immutable Passport, we’re hopeful that we’ll be able to use AI to deal with problems like transaction security. 

Keeping users safe in this environment requires us to build a lot of the same infrastructure as banks have when they’re detecting things like transaction fraud, and also recommendations for when users are making purchases for these assets. We think there are lots of ways that we can offer additional value at the wallet layer and the checkout layer by improving those experiences. 


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg

Research

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

article-image

The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

article-image

While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders

article-image

Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume

article-image

DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit

article-image

The Boston Globe reports that lawyer John Deaton is weighing a possible bid

article-image

Ethereum’s Dencun upgrade will enable Uniswap v4 to optimize smart contracts for complex functionality