Dymension: The Lego Kit for Modular Blockchain

Forward the Original Title: Beside modular “Lego” narrative, what other catalysts for Dymension are worth paying attention to?

Dymension is much more than just an airdrop. It’s the Lego kit for modular blockchains and could be one of the biggest projects of the year.

This article is the latest report on DYM by crypto researcher Jake Pahor, who conducted detailed research on Dymension, and delved deeply into Dymension from multiple perspectives such as use cases, adoption, project revenue, and tokenomics, Foresight News compiled the entire text.

Overview

Dymension is a decentralized Delegated Proof-of-Stake（DPoS） L1 blockchain secured by the DYM token. It is custom built to provide RollApps with:

• Security (secured by the validators) ;
• Interoperability (interact via a single IBC connection to Dymension) ;
• Liquidity (Embedded AMM);

Use Cases

Dymension is like an internet service provider, connecting RollApps to the crypto economy. It enables fast deployment of modular blockchains in a few minutes.

• Front end → RollApps;
• Back end → Dymension Hub;
• Database → Data availability networks;

The Dymension Hub was constructed using the Cosmos SDK and serves as the settlement layer. It leverages IBC for secure message transfer between Dymension RollApps.

I am bullish on the entire Cosmos ecosystem, and I think Dymension is positioned to capitalize on this growth.

Adoption

The Dymension mainnet was only launched on 7th Feb ‘24. However, here are some stats from their Froopyland testnet:

• 12.8m DYM - Total TVL on RollApps
• 1,135 RollApps listed
• 15,315 RollApps deployed
• 3.5m Total IBC Transfers
• 1.36m Total Active Addresses

Project Revenue

DYM demand is driven by 3 main mechanisms:

1. Burn: DYM tokens burned to validate bridging & swap fees.
2. Transaction Fees: Fees are distributed among DYM validators & stakers.
3. Supply Lockup: RollApp bonds reduce circulating supply, enhancing security and stability.

Tokenomics

DYM is the native token for Dymension used for governance, fees, and network security.

Issuance is based on staked DYM tokens compared to total supply:

• Min Annual Issuance: 1%;
• Max Annual Issuance: 10%;
• Target staking ratio: 67%

The token inflation rate is based on the staking ratio:

• Below Target: Issuance rate increases until it reaches 10% or the target is met.
• At Target Staking: No change in issuance rate.
• Above Target: Issuance rate decreases until it reaches 1% or the target is met.

7% of the DYM supply was airdropped recently to users/stakers of Celestia, ETH L2s, Cosmos, Solana, and select NFT holders (Pudgy, Mad Lads etc.)

Current supply stats:

• Circulating supply: 146m
• Max supply: 1b
• Market cap: 1.02b
• FDV: 7b
• Market cap/FDV: 15%

Treasury

According to current valuations, the Dymension community pool (treasury) holds: 50m DYM = 350m USD

These tokens were unlocked at genesis and are accessible to the DAO, but they are considered non-circulating supply. This provides the project with a substantial runway.

Governance

The first governance proposal has just passed and involves addressing some of the throughput and transaction issues on the chain due to high demand.

It is rumored that voting in these on-chain proposals will be a prerequisite for future airdrops to DYM stakers.

Team and Investors

Dymension was founded in 2022 by Yishay Harel, Omri Dagan and Lior Zilpa. In February 2023, Dymension raised 6.7m through a private token sale. Investors included Big Brain Holdings, Stratos, Matchbox DAO and Shalom Meckenzie.

Competitors

Dymension is part of a new wave of modular blockchain applications that are gaining rapidly in popularity. Some refer to it as “Rollups-as-a-Service”

While Celestia paved the way with their modular DA network, the two projects aren’t really competing against each other.

Risks and Audit

CertiK security score: 70.88, top 20% of projects.

Main concern: no publicly available code audit or bug bounty in place yet. Despite being relatively new, the project excels in community engagement, market potential, and operations.

Summary

The recent airdrop created huge amounts of hype around Dymension. However, looking past the short term noise, the fundamentals and potential are strong. Upcoming catalysts:

• Airdrops to stakers
• RollApps on mainnet
• Cosmos eco growth

Overall weighted score = 7.70

Disclaimer：

1. This article is reprinted from [Foresight News]，
   Forward the Original Title “In addition to the modular “Lego” narrative, what other catalysts for Dymension are worthy of attention?”，Copyright belongs to the original author [Jake Pahor]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.
2. Liability Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
3. Translations of the article into other languages are done by the Gate Learn team. Unless mentioned, copying, distributing, or plagiarizing the translated articles is prohibited.