If you have been in crypto for long enough I am sure you have heard of the term “optimistic rollups” which initially started as a scaling solution for the Ethereum Network. But what if I told you that there is a new blockchain in the Cosmos ecosystem that deploys optimistic rollups, offering quick and cheap transactions? This is where Dymension comes in!
Dymension, also known by the market ticker DYM, is a modular layer 1 blockchain platform, which hosts a network of layer 2 “RollApps”, which are operated through the Dymension Hub.
Similar in concept to Cosmos, from which Dymension itself is built, however instead of focusing on individual blockchains, Dymension is focused on creating a network of independently deployable optimistic rollups, known as RollApps.
At its core, Dymension offers an easily deployable rollup infrastructure for developers and a lightning-fast experience for users.
But what exactly are RollApps? And what makes Dymension a game-changer in the crypto space?
What is Dymension?
Dymension was founded by Yishay and another, currently unknown individual, in 2023, with the blockchain’s mainnet going live in 2024.
Dymension isn’t a blockchain as such, rather it is the platform through which other application-specific Layer 2 rollups, called RollApps, are built and deployed.
These RollApps utilise Dymension’s consensus mechanism and back-end to ensure compatibility, reliability, high speed, low latency, and low costs.
The platform’s Dymension Hub acts as the settlement layer for these RollApps, validating transaction blocks which help the network achieve consensus.
These RollApps also use platforms such as Celestia for their Data Availability layer, meaning the RollApps themselves only handle the application layer.
Though, for this concept to make a bit more sense, I do also have a video about Celestia and their Data Availability services. I’ll leave a link in the description in case you’d like to watch that next.
But, how exactly does all this work?
How does Dymension work?
As mentioned previously, Dymension is a layer 1 modular blockchain that helps with the building and deployment of a layer 2 network that uses Dymension’s consensus mechanism and back-end to ensure a smooth operation.
Dymension itself was built using the Cosmos SDK.
The Cosmos SDK is a developer tool kit of pre-built blockchain parts and libraries, which allow developers to quickly and successfully deploy fully independent blockchains through the Cosmos framework that can connect to any other Cosmos SDK-built blockchain that has the IBC Protocol enabled.
This means Dymension is part of this family of independent blockchains that are all connected through the Cosmos Hub to ensure the same compatibility, reliability, high speed, low latency, and low costs that Dymension offers.
So, what makes Dymension any different?
What makes Dymension unique?
Platforms on the Dymension platform don’t build their products with the Cosmos SDK, as that is for building blockchains, they instead use the RollApp Developers Kit, or RDK, which is focused on providing the same benefits and opportunities as Cosmos does for blockchains, but specifically for Layer 2 optimistic rollups.
To briefly summarise, Optimistic Rollups are a layer 2 scaling solution that bundles multiple transactions off-chain before committing a single hash representing them back to the main chain.
If no disputes occur, the transactions are considered valid, ultimately optimising throughput and reducing network costs for the end user, while also providing a dispute mechanism if needed.
Having outsourced their Settlement layer, which is handled by the Dymension Hub, and having outsourced their Data Availability layer, which is a fancy way of saying ‘database’, to platforms like Celestia, RollApps on the Dymension network are free to focus all their energy on their domain-specific application layer.
Having removed a lot of the back-end, developers do not need to waste time building and managing the Settlement or Data Availability layers and can focus all of their efforts on making the best RollApps possible, which ultimately helps the layer 1 blockchain process transactions more effectively.
In short, RollApps on Dymension represent a network of Layer 2 programs that are custom-built for a single Decentralised Application. This functions similarly to the independent app-specific ‘Appchains’ on Cosmos.
However, the key difference is RollApps have, for the most part, even lower latency and computational costs associated with them due to employing rollup technology and have outsourced their consensus, security, and settlement to Dymension, and also having outsourced their Data Availability to Celestia.
Under the hood, Dymension functions similarly enough to Cosmos, meaning it is a Proof-of-Stake blockchain with most of the perks offered to all the platforms on the Cosmos ecosystem.
However what’s important to note is that the Dymsension Hub is also embedded with an Automated Market Maker, or AMM, as well as many Oracles, which are designed to facilitate shared liquidity, humanless but verifiable oversight, up-to-date and accurate information, along with token swaps and asset routing across all RollApps on the network.
But what about the tokenomics?
DYM Tokenomics
The DYM token is a Proof-of-Stake utility token that can be used for the classics such as payments, staking, and governance.
In total, there will only ever be 1 billion DYM.
At present, only around 15% of this total, somewhere around 150 million DYM are available on the market – with roughly 50% of the 150 million being donated to early users during their genesis “Rolldrop”.
The entire supply will be released to the market by 2029, and its distribution will be as follows:
In the end, 20% of all DYM will be distributed to the Core Contributing Team, 14% to Backers, 5% towards the Community Pool, 8% towards the Public Allocation, 20% towards the Ecosystem and any further Research & Development, and the final 33% will go to Incentives Manager.
As is typical, these will be distributed slowly over time to ensure there is no unnecessary devaluation of its price.
Dymension Hub offers a familiar but novel product.
If you believe in Cosmos, then the concept of Dymension is also likely an appealing one for you.
Using the same infrastructure and framework as its parent, Dymension has managed to create a niche for itself by offering further infrastructure and framework to those looking to make optimistic rollups, rather than blockchains.
The benefits are clear to see for everyone. Faster blockchain solutions with cheaper fees, all of which are interconnected through the Dymension Hub.
But, it is worth remembering that survival will require both Cosmos to thrive as well as excellent management from the top.
Although nothing is ever guaranteed in crypto, if early indications are anything to go by, I believe it is likely that Dymension’s best days still lay ahead.
Thanks for reading! If you like the review on Dymension I am sure you will like the review on Celestia and on Akash Network.