Dymension: A Comprehensive Project Overview
Witnessing a 123% surge in its token value just 10 days post-listing, Dymension is turning heads in the crypto world. We dive deep into the project’s structure, its economic model, and the roadmap that’s propelling Dymension’s impressive growth.
Dymension is a blockchain platform, carving its niche in the development and rollout of appchains dubbed RollApps (distinct from Rollups). It's a powerhouse for crafting high-performance dApps, encompassing features like:
- Inter-Blockchain Communication (IBC);
- RollApp Virtual Machine;
- An in-built AMM hub.
RollApps are modular blockchains crafted through the RollApp Development Kit (RDK), grounded in the Cosmos SDK. They derive their name from the concept of “rollup” – a second-layer solution aimed at off-chain transaction processing, thereby enhancing network scalability and trimming operation costs.
Blockchain Layers Explained: Monolithic vs. Modular Blockchains. Source: medium.com
Imagine RollApps as the interface of a web application and the Dymension network as the server powering it. Dymension acts as the conductor, managing network operations, handling RollApp requests, and ensuring seamless interaction between them.
Dymension leverages Celestia for ensuring data availability. In traditional web terms, Celestia plays the role of a database, temporarily storing information to boost RollApps’ performance.
The Dymension Hub is the heartbeat of consensus, maintaining the network’s integrity and refreshing its state. Additionally, being a part of Cosmos architecture, Dymension allows RollApps to interface with other ecosystem solutions via the Inter-Blockchain Communication (IBC) protocol.
Dymension RollApp Deployment Kit (RDK)
The Dymension RDK is an arsenal of modules and templates designed for RollApp development. It focuses on crafting applications tailored to specific needs (scalability, performance, cost, etc.).
Dymension RDK inherits and adds to the Cosmos modules:
- Cosmos SDK — central to network management, updating, and token transfers;
- Inter-Blockchain Communication (IBC) Protocol – enabling interactions across the Cosmos ecosystem;
- Ethermint — supporting Ethereum Virtual Machine (EVM) smart contracts;
- CosmWasm — facilitating CosmWasm smart contracts within Cosmos.
RDK empowers developers to handpick modules fitting their application, bestowing RollApps with bespoke features suitable for sectors like DeFi, GameFi, SocialFi, and beyond.
RollApps are two-pronged – client and server. The server deploys applications using RDK to enhance user experience, while the client service, Dymint, orchestrates core blockchain functions like new block creation and inter-layer interactions.
Dymint
Dymint stands as Dymension's specialized iteration of Cosmos's Tendermint consensus mechanism. It’s tasked with crafting new blocks, merging them, and broadcasting them to the Dymension Hub.
The Transaction Batching Process in RollApp. Source: docs.dymension.xyz
A RollApp transaction's lifecycle:
- A user initiates a transaction in RollApp;
- The RollApp sequencer (operator) assimilates the transaction into a block, consolidates blocks, and elevates them to the Data Availability (DA) level;
- Once DA-level acceptance is achieved, the sequencer relays a state update to the Dymension Hub, which can independently verify these data for potential fraud.
The Dymension Hub adopts updates with an optimistic approach. It’s akin to the legal principle of innocent until proven guilty – data is deemed valid until the Hub contests it with evidence of fraud.
This approach eschews constant data validation, thus bolstering network performance. An alternative transaction validation method is detailed in our piece on ZK-rollups.
Dymint's hallmark is its Elastic Block Production (EBP). Instead of a constant stream of new blocks, production is transaction-driven, emerging as needed from the mempool (the operation waiting room). This reduces sequencer expenses, enhancing RollApp’s overall efficiency.
Dymension's Tokenomics
The Dymension mainnet went live on February 6, 2024. The team introduced DYM, the native network token, now trading on exchanges.
DYM token functions include:
- Staking: DYM serves as collateral and reward in the Delegated Proof-of-Stake (DPoS) system, offering an APR of 23.5% (DPoS);
- Governance: DYM holders participate in votes influencing ecosystem development, like network updates and resource allocation;
- Fee Payment: DYM is used for paying fees in inter-chain transactions, such as transferring DYM between Dymension and Celestia.
- Liquidity Addition. With an integrated automated market maker in the Dymension Hub, DYM will soon be usable in liquidity pools.
DYM’s total supply is 1 billion, with 146 million circulating as of February 2024.
DYM Distribution Breakdown. Source: cryptorank.io
DYM distribution categories:
- DAO Incentives — 33%;
- Ecosystem and R&D — 20%;
- Core Development Team — 20%;
- Backers — 14%;
- Public Allocations — 8%;
- Community Pool (DAO) — 5%.
At mainnet launch, 100% of the public allocation and 33% of the ecosystem and research tokens were unlocked. Tokens for backers and the team are subject to a 12-month lock, followed by a 24-month linear vesting.
DYM Allocation Timeline. Source: cryptorank.io
DAO-allocated tokens, though minted, aren't yet circulating. The project hasn't disclosed details about these tokens' market entry, leaving open the possibility of releasing all 380 million DYM tokens at any time.
Dymension's Future
As of February 2024, Dymension is a frontrunner among just four projects in the Rollups-as-a-Service (RaaS) sector. Its capitalization significantly outstrips closest rivals AltLayer and Ankr Network, though DYM and ALT share similar daily trading volumes of $115,000.
Dymension could integrate into the burgeoning modular solution ecosystem, initiated by Celestia. Their token TIA surged 8.7 times in value within five months.
Dymension’s development phases
- Singularity. Staking, validator efficiency, inter-blockchain connectivity, initial governance voting proposals;
- 2D. Launching the first-ever IBC-rollup on Interchain, unveiling “The Draft” project, initiating Rolldrop Season 2 (DYM airdrop).
- 3D. Removing Dymension’s oversight in approving new RollApps.
- 4D. Fostering a self-sustaining ecosystem of games, services, apps, and more.
The future of DYM is yet to be charted. Hence, prior to making investment decisions, the significance of personal research cannot be overstated. DYOR!
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