IMX coin price prediction: is Impermax’s token a buy?
The governance token of Impermax (IMX) has seen extreme volatility in the past week, with the price swinging between $0.30 and $5 on a daily basis.
What is Impermax’s (IMX) coin and should one consider investing in it?
In this analysis, we look at the platform and what factors are shaping Impermax price prediction going forward.
Impermax provides leverage for yield farming
Launched in March 2021, Impermax is a decentralised finance (DeFi) platform that enables liquidity providers, also called yield farmers, to use the liquidity provider (LP) tokens they earn from automated market makers (AMMs) as collateral for loans. Yield farmers can use the loans for staking, trading or to increase the size of their deposits in the liquidity pools to maximise their rewards. This is known as leveraged yield farming.
Simone Rigolon, a software developer, and Brian Tinsman, a game designer and economist, created Impermax to address what they saw as inefficiencies in the emerging AMM space. The IMX cryptocurrency token launched on 29 April.
The Impermax smart contract functions through its Indirect Liquidity Providing app. The contract executes multiple borrowing steps to set up a leveraged position with a single transaction. Liquidity providers can choose their preferred level of risk and reward, increasing the efficiency in AMMs.
Impermax aims to increase awareness of the use of leveraged liquidity. It also intends to reduce the risk of yield farmers experiencing impermanent loss from pooling their cryptocurrencies by transferring the risk to the borrower. If the potential impermanent loss becomes too high, the Impermax app liquidates the borrower’s position and returns 100% of the lender’s funds, protecting their position.
Yield farmers can use the borrowed funds to increase their returns by 20 to 50 times, depending on the volatility of the LP. Impermax distributes a share of the yield to the lender and its protocol reserves, with the rest going to the borrower. Lenders earn yield indirectly through borrowers. Borrowers can pay back the funds to de-leverage at any time.
According to its website:
Borrowers can only borrow the same tokens they use as collateral, matching loan collateral to the amount they borrow to avoid over-collateralisation.
Impermax has its own governance token, IMX, to control the revenue the platform generates from lending 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% over its first four years of operation. Impermax airdropped 14 million tokens to top Uniswap liquidity providers when it launched and allocated 1 million tokens to create a starting supply on Uniswap, to ensure early liquidity.
Since its launch on Uniswap, which runs on the Ethereum blockchain, IMX has expanded the Indirect Liquidity Providing app to several other blockchains.
Impermax launched on the QuickSwap DEX on the Polygon network on 17 June. By depositing LP tokens on Impermax and using leverage, yield farmers earn trading fees from QuickSwap as well as the QUICK staking reward.
On 14 September, it went live on Arbitrum for SushiSwap. Yield farmers on Arbitrum can use their Sushi Liquidity Provider (SLP) tokens as collateral on Impermax to leverage their farming positions for increased auto-compounded returns. Impermax subsequently launched on the Swapr exchange on Arbitrum on 1 October, with five liquidity pairs including IMX-ETH. Liquidity providers can farm the IMX-ETH pair directly from Impermax and earn an additional IMX reward to leverage. It joined SushiSwap on the Polygon network on 24 September.
Impermax went live on the Avalanche network through the Pangolin DEX on 24 October. Yield farmers can use their Pangolin LP as collateral to leverage their positions, multiplying the return from farming and earning additional IMX incentives. Impermax will expand the range of tokens available for lending on Avalanche.
In response to feedback, the smart contracts on Avalanche have lowered the borrowing fee to 0%. Yield farmers will be able to open and close leveraged positions without any upfront cost, Impermax said. The interest rate model has been modified 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. It is also looking to “release [a] suite of decentralised financial services for LPs on the next generation of AMMs”.
IMX price volatility increases
The IMX token was priced at $1.72 when it launched in April, trading up intraday to $2.54 before dropping. The cryptocurrency price fell as low as $0.08524 on 20 July, when coins across the crypto markets bottomed out after crashing from the April and May highs.
IMX traded between $0.10-$0.20 until early October, when it began to climb in response to impermax coin news following the launch of the platform on additional DEXs. IMX moved up to $0.2737 on 6 October from $0.1443 the previous day, and climbed further to $0.4089 on 7 October. On 20 October, the IMX price gained further to an intraday high of $0.5422
IMX started November at a high of $1.07. The price has been spiking and dropping back sharply since 10 November, when it traded up from $0.4963 to $1.76 and back down to $0.4885 by the end of the day. On 17 November, IMX jumped from $0.4736 to $5.41, then collapsed back to a low of $0.3041 on 18 November. At the time of writing, the coin traded at $0.3532.
So, what is the outlook for the coin’s price in the future?
IMX coin price prediction: is it a buy, hold or sell?
At the time of writing, on 19 November, CoinCodex predicted that the Impermax token price could drop back to $ 0.2959 by 24 November and $0.1190 by the end of the month, based on historical data.
DigitalCoin’s technical analysis for the IMX coin was bearish. There were nine indicators giving sell signals and nine neutral, compared with eight buy signals. The long-term IMX price prediction from the website, which is based on historical data, projected that the price could average $0.6133 in 2022 and increase to $1.07 by 2025, then reach $1.61 by 2028.
In its Impermax prediction, Wallet Investor indicated that the coin could drop back to its previous levels and trade at $0.6250 by the end of 2021. The algorithm-based forecasting site expected the IMX price to move up to $0.9270 by the end of 2022, reaching $1.8440 by the end of 2025.
The long-term Impermax (IMX/USD) forecast from Price Prediction’s artificial intelligence analysis projected that the price could average $0.76 in 2022, climbing to $2.33 in 2025 and $14.95 by 2030.
It’s important to keep in mind that cryptocurrency markets remain extremely volatile, especially newcomers like IMX, making it difficult to accurately predict what a coin’s price will be in a few hours, and even harder to give long-term estimates. As such, analysts and algorithm-based forecasters can and do get their IMX predictions wrong.
We recommend that you always do your own research, and consider the latest market trends, news, technical and fundamental analysis, and expert opinion before making any investment decision. And never invest more than you can afford to lose.
Will the IMX price go up or down?
Forecasting sites predicted that the IMX price could rise over the long term. However, it‘s important to keep in mind that the volatility of cryptocurrency prices makes it difficult to predict future prices accurately. Forecasters can and do get their Impermax crypto price predictions wrong. You should do your own research to make informed trading decisions. Keep in mind that past performance is no guarantee of future returns.
Is Impermax crypto a good investment?
As with other cryptocurrencies, IMX is a high-risk asset. Whether it is a suitable investment for your portfolio depends on your risk tolerance, personal financial circumstances and investing goals. It is important to do your own research before investing in any asset, including cryptocurrencies. And never invest more than you can afford to lose.