Impermax’s governance token (IMX) has seen extreme volatility over the past week, with a price hovering between $ 0.30 and $ 5 per day.
Impermax launched earlier this year and quickly gained popularity as farm-yielding cryptocurrency on decentralized exchanges (DEX) took off.
What is the Impermax coin (IMX) and should you consider investing in it?
In this analysis, we take a look at the platform and the outlook for the coin’s price given recent volatility.
Impermax provides leverage for yield farming
Launched in March 2021, Impermax is a decentralized finance (DeFi) platform that allows liquidity providers, also known as yield producers, to use the liquidity provider (LP) tokens they earn from the holders of automated market (AMM) as collateral for loans. Yield producers can use the loans for staking, trading or to increase the size of their deposits in cash pools to maximize their rewards. This is called leveraged yield farming.
Simone Rigolon, software developer, and Brian Tinsman, game designer and economist, created Impermax to address what they saw as inefficiencies in the emerging AMM space. The IMX cryptocurrency token was launched on April 29.
The Impermax smart contract operates through its indirect liquidity provision application. The contract executes multiple borrowing stages to establish a leveraged position with a single trade. Liquidity providers can choose their preferred level of risk and reward, thus increasing the effectiveness of MAs.
Impermax aims to increase awareness of the use of leveraged liquidity. It also aims to reduce the risk of yield farmers incurring an impermanent loss by pooling their cryptocurrencies by transferring the risk to the borrower. If the potential temporary loss becomes too high, the Impermax app liquidates the borrower’s position and returns 100% of the lender’s funds, thus protecting their position.
Yield producers can use the borrowed funds to increase their income 20 to 50 times, depending on the volatility of the LP. Impermax distributes part of the yield to the lender and its protocol reserves, the rest going to the borrower. Lenders earn a return indirectly through borrowers. Borrowers can repay the funds to get out of debt at any time.
According to its website:
“Some yield producers (also known as AMM liquidity providers) are looking for a way to eliminate impermanent losses while still getting a yield. Other yield farmers are looking for a way to increase their income and are not as concerned about fleeting losses. Impermax solves both of these problems by allowing risk-averse farmers to loan funds to risk-tolerant farmers.
Borrowers can only borrow the same tokens they use as collateral, matching the loan collateral to the amount they borrow to avoid over-collateralization.
Impermax has its own governance token, IMX, to control the revenue generated by the platform from loan funds. Impermax takes up to 20% of each interest payment in fees for its reserve account, for distribution to IMX holders and for growth development. Holders can use their Impermax tokens to vote on on-chain governance decisions.
There is a maximum supply of 100 million IMX tokens, of which Impermax intends to distribute 40% in its first four years of operation. Impermax dumped 14 million tokens to major liquidity providers Uniswap when it launched and allocated 1 million tokens to create a seed bid on Uniswap, to ensure early liquidity.
Since launching on Uniswap, which runs on the Ethereum blockchain, IMX has extended the application of providing indirect liquidity to several other blockchains.
Impermax launched on the QuickSwap DEX on the Polygon network on June 17th. By depositing LP Tokens on Impermax and using leverage, Yield Producers earn QuickSwap trading fees as well as the QUICK Staking Reward.
On September 14, it was uploaded to Arbitrum for SushiSwap. Producers of yields on Arbitrum can use their Sushi Liquidity Provider (SLP) tokens as collateral on Impermax to leverage their farm positions and increase compound returns automatically. Impermax was then launched on the Swapr exchange on Arbitrum on October 1, with five cash pairs including IMX-ETH. Liquidity providers can mine the IMX-ETH pair directly from Impermax and earn an additional IMX reward to mine. He joined SushiSwap on the Polygon network on September 24.
Impermax went live on the Avalanche network via the Pangolin DEX on October 24. Yield growers can use their Pangolin LP as collateral to leverage their positions, multiply crop yield, and earn additional IMX incentives. Impermax will expand the range of tokens available for loan on Avalanche.
In response to the comments, smart contracts on Avalanche lowered borrowing fees to 0%. Yield producers will be able to open and close leveraged positions without any upfront cost, Impermax said. The interest rate model has been changed to provide more stable interest rates.
According to its roadmap, Impermax plans to expand to non-fungible token (NFT) AMM models, adding IMX NFT support. He also seeks to “liberate [a] suite of decentralized financial services for LPs on the next generation of AMM ”.
IMX price volatility is increasing
The IMX token was priced at $ 1.72 when it launched in April, trading intraday at $ 2.54 before falling. The price of the cryptocurrency fell to $ 0.08524 on July 20, when coins in the crypto markets hit a low after collapsing from the highs in April and May.
IMX was trading between $ 0.10 and $ 0.20 until early October when it started to climb in response to news about impermax coins after the platform launched on Additional DEX. IMX rose to $ 0.2737 on October 6 from $ 0.1443 the day before and climbed again to $ 0.4089 on October 7. On October 20, the IMX price rose further to an intraday high of $ 0.5422
IMX started November at a high of $ 1.07. The price has risen and fallen sharply since November 10, when it fell from $ 0.4963 to $ 1.76 and came back down to $ 0.4885 at the end of the day. On November 17, IMX fell from $ 0.4736 to $ 5.41, then fell back to a low of $ 0.3041 on November 18. At the time of writing, the coin was trading at $ 0.3532.
So what is the outlook for the coin’s price going forward?
IMX Coin Price Prediction: Is It A Buy, Hold, Or Sell?
At the time of writing, on November 19, CoinCodex predicted that the price of the Impermax token could fall back to $ 0.2959 by November 24 and $ 0.1190 by the end of the month, based on the database. historical.
DigitalCoin’s technical analysis for IMX coin was bearish. There were nine indicators giving signals to sell and nine neutrals, compared with eight signals to buy. The website’s long-term IMX crypto price prediction, which is based on historical data, predicted that the price could average $ 0.6133 in 2022 and rise to $ 1.07 by 2025, then reach $ 1.61 by 2028.
In its prediction of the price of IMX tokens, Wallet Investor indicated that the coin could return to its previous levels and trade at $ 0.6250 by the end of 2021. The algorithm-based prediction site expected that the IMX price rises to $ 0.9270 by the end of 2022, reaching $ 1.8440 by the end of 2025.
Impermax’s long-term forecast (IMX / USD) from Price Prediction’s artificial intelligence analysis predicted the price could average $ 0.76 in 2022, reaching $ 2.33 in 2025 and 14 , $ 95 by 2030.
It is important to keep in mind that the cryptocurrency markets remain extremely volatile, especially newcomers like IMX, which makes it difficult to accurately predict the price of a coin in a few hours, and even more difficult. to give long-term estimates. As such, algorithm-based analysts and forecasters can and do get it wrong.
We recommend that you always do your own research and take into account the latest market trends, news, technical and fundamental analysis and expert opinions before making any investment decisions. And never invest more than you can afford to lose.
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Read more: MATIC Price Prediction: What’s Next for Polygon?
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