2024 is off to a fast start; the BTC ETF finally being approved, and more airdrops are already occurring. Perhaps the most popular thus far is Dymension’s $DYM, which was made available to Celestia and Cosmos stakers, Solana users, and more. But what is Dymension?
In today’s edition, we’ll be giving some insights from the Dymension team on the protocol’s ambitions, capabilities, and more.
Over and out ⬇
Background on Dymension
Dymension is a modular blockchain in Celestia ecosystem which aims to power the internet of rollups.
Specifically, it specializes in giving developers the option to develop lightning-fast appchains, dubbed ‘RollApps’.
Dymension ($DYM) Potential Airdrop
Following it’s incentivized Froopyland testnet, Dymension announced an airdrop and subsequently released it’s eligibility checker for it’s “Genesis Rolldrop”.
This airdrop garnered attention as the first highly publicized airdrop for $TIA stakers, as well as it’s criteria which granted an allocation to multiple ecosystems, including OSMO and ATOM stakers, as well as Solana dApp users.
This airdrop has been received well when compared to other initiatives like the SAGA airdrop, which specifically rewarded users who increased their staking balances in the past year instead of simply staking.
The $DYM snapshot, including $TIA stakers, was taken on Dec. 19
$DYM Speculation
Aevo, which has been quick to launch perps for soon-to-be airdropped tokens like $JTO, $JUP, $PYTH, $MANTA, & more, has already launched.
$DYM Pre-launch market on Aevo
Current trading has $DYM valued at ~$4.
It remains to be seen how $DYM will trade from here.
Some are using $TIA’s post-airdrop performance as a comp for $DYM - Dymension is built on top of Celestia and has the same genesis token supply (1 billion).
However, other highly-anticipated airdrops like $JTO and $PYTH haven’t fared as favorably as $TIA.
Introduction to Dymension and Recent Hype
yishay, contributor at Dymension, says that Dymension team has been working hard for two years on building their product.
The team is excited about the progress they have made and the positive response from the community.
He adds that launching now feels like the right time due to market conditions and partnerships with other projects.
Modular pieces are coming together, and being a dominant player in this space is crucial for Dymension's vision.
yishay says that being one of the first movers allows Dymension to capture attention, establish itself as a dominant player, and benefit from network effects.
While it may seem like a race for attention, timing is more about planning, prioritizing, and focusing on delivering a quality product.
While being first is not the primary goal, being a dominant piece of the modular stack is crucial for Dymension's vision.
Importance of Settlement and Differentiation
Settlement refers to validating the state of a chain, such as withdrawing from a rollup.
Dymension aims to be a dominant player in settlement by providing unique technology and becoming the go-to settlement layer in the modular stack.
The team believes that the future of blockchain is modular, similar to web2, where users can choose their virtual machine (VM), decentralized application (dApp), and settlement layer.
Differentiating themselves through innovative technology and achieving network effects are key strategies for Dymension's success.
While there may be competition among different consensus mechanisms, Dymension sees itself as part of a larger ecosystem rather than direct competitors with other projects.
Each project has its unique value proposition and target audience within the broader blockchain landscape.
He adds that settlement layers on Ethereum are smart contracts used to retrieve money from rollups. Multiple smart contracts on Ethereum serve as settlement layers. Rollups rely on these settlement layers for transactions and settlements.
Dymension as a Unique Settlement Layer
yishay explains that Dymension stands out as a blockchain that functions as its own settlement layer.
The IBC bridge enables Dymension to validate other rollups, making it unique.
Other blockchains do not have this capability, making Dymension innovative and distinct.
He adds that in the future, Ethereum may become a settlement layer with enshrined zkEVM.
Currently, there is no blockchain built to settle other blockchains at their core level like Dymension does.
Challenges in Cross-Rollup Communication and Liquidity
yishay says that cross-rollup communication and liquidity pose challenges.
Many subnets and rollups have low-security levels compared to Ethereum or high validator count layer-1.
Utilizing IBC as a native bridge offers the advantages of both rollups and IBC.
He adds that developer and user experience are crucial considerations.
The focus should be on enabling average developers to build their own blockchain without custodial or regulatory risks.
Dymension aims to simplify the process for developers, allowing them to deploy their own chains independently.
Dymension's Purpose: Enabling Independent Blockchain Deployment
yishay says that Dymension's purpose is not competition-based on security but facilitating independent blockchain deployment.
Deploying a blockchain involves significant coordination efforts.
Dymension allows individuals or teams anywhere in the world to deploy their own chains as if they were tokens on Ethereum.
yishay expects an explosion of chains in the future; chains will form an "internet of servers" connected through IBC.
He adds that most chains will be simple crypto servers, while some will offer valuable breakthrough applications.
Dymension Architecture and Rollup Servicing Logic
The custom SDK for Dymension is modular, dividing between consensus and application.
fRollup servicing logic is built into the Cosmos SDK and layer-1.
The goal is to have a native UX feeling where all bridges are the same, allowing for easy interoperability between different rollups.
The standard for communication between rollups is IBC.
He adds that both layer-1 and layer-2 are built to fit together like Lego pieces.
Applications for layer-2 are built on top of layer-1 but not on smart contracts.
The consensus-less engine has been developed as a drop-in replacement for Tendermint.
yishay says that using a standardized approach ensures uniformity in communication and trust assumptions across all rollups.
Users don't need to worry about differences in trust assumptions or compatibility between different rollups.
Role of Dymension Hub Validators and Agnostic Data Availability
All rollapps are secured by the validators running on the Cosmos SDK and Tendermint.
Users can trust that their funds are effectively secured by this technology.
He adds that rollapps on Dymension Hub are DA agnostic, meaning they can choose their own data availability solution as long as it's IBC connected with Dymension Hub.
This approach prevents congestion on Dymension Hub caused by all roll apps putting their data on the main chain.
Dymension Hub ensures the safety of funds and uses IBC to connect with other data availability solutions like Celestia.
yishay says that agnostic DA brings a better user experience by allowing users to choose their preferred data availability solution.
It attracts a larger community and more developers to build on Dymension Hub.
The concept of roll apps is intriguing to users, providing value from a user perspective.
He adds that the focus is on creating the best product and opening up roll apps for everyone.
Users can explore various roll apps on the Dymension portal, deposit funds, and engage with different projects.
Understanding $DYM as Money and Dymension's Business Model
yishay says that $DYM is money, highlighting its importance in transactions within the ecosystem.
He adds that Dymension acts as an internet service provider for rollups, settling transactions between them.
The specifics of Dymension's monetary policy and economics will be released soon.
As a settlement layer, Dymension has a unique business model compared to other venues.
yishay says that the value accrual mechanisms of $DYM are interesting and will be revealed in the upcoming release of Dymension's economics.
The focus is on creating a permissionless environment where users can participate and benefit from roll apps.
The goal is to create the best product and foster growth through permissionless fund participation.
There are numerous teams building exciting projects on Dymension Hub, offering a wide range of options for users to explore.
Dymension: A Bet on Human Ingenuity
yishay says that Dymension is an opportunity for individuals to capitalize on endless state machines and innovative ideas.
The goal is to have a blast of innovative state machines that people can build upon.
Participating in the Dymension ecosystem, staking $DYM token, and contributing to consensus are ways for users to get involved and benefit from the value generated.
He adds that users can join the ecosystem by staking $DYM tokens, regardless of whether they received an airdrop or not (not financial advice).
The value in Dymension comes from providing consensus for settlement layers and actively contributing to the community.
yishay says that the utility of $DYM tokens lies in bonding them to deploy roll-ups, enabling easy transformation of servers into crypto blockchains with minimum effort and maximum security.
Unlocking Growth with Dymension
yishay says that the vision behind Dymension is to exponentially enhance growth within blockchain ecosystems.
By building standard state machines that generate value, Dymension aims to replicate the success of tokens and NFT collections.
He adds that the name "Dymension" signifies adding another Dimension or layer to existing interchain networks like Cosmos.
yishay says that the core vision of building the internet of roll-ups remained unchanged throughout the process; the Eureka moment for Dymension was realizing that just as Ethereum revolutionized tokens, Dymension could do the same for roll-ups.
The goal is to create standard state machines that not only represent value but also generate value as utility tokens.
He adds that Dymension is a Tendermint blockchain that is EVM compatible.
Hexadecimal addresses are prioritized as the standard format in Dymension to align with network effects.
Users can use their existing Ethereum hexadecimal addresses on Dymension to claim $DYM tokens.
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