What is Dymension (DYM)? – Bitfinex blog

07 Feb What is Dymension (DYM)?

Dymension (DYM) is pioneering a breakthrough in Web3 technology, by establishing a network of high-speed, modular blockchains termed RollApps. These RollApps are designed to be easily deployable, offering a streamlined approach for creating diverse blockchain applications. The heart of Dymension’s innovation lies in its RollApp Development Kit (RDK), akin to the Cosmos SDK for RollApps, providing developers with a robust toolkit to expedite the building process of these applications.

The term “RollApp” is derived from the concept of “rollups” in blockchain technology, which are solutions designed to increase the scalability of blockchains by rolling up or batching multiple transactions into a single transaction. A “RollApp” is a key component of the Dymension network, representing a new class of blockchain applications that aim to be both modular and highly efficient.

Dymension (DYM)

Dymension and its RollApps offer a unique solution in the multichain Web3 space, providing scalability, interoperability, and efficiency. This innovative approach positions Dymension as a pivotal player in the future development of blockchain technology and its applications across various sectors.

RollApps are designed to address the blockchain scaling trilemma, which involves achieving a balance between scalability, security, and decentralisation. RollApps use Elastic Block Production (EBP) to produce blocks on-demand, rather than at fixed intervals. This approach means that blocks are only created when there are transactions to be processed, significantly reducing the network load and improving efficiency. This is particularly beneficial during periods of low activity, as it avoids the unnecessary consumption of resources.

The modular nature of RollApps allows for tailor-made solutions for specific use cases, which can optimise transaction throughput. Each RollApp can be designed to handle the demands of its specific application, rather than relying on a one-size-fits-all approach.

RollApps are secured by the validators of the Dymension network, which uses a Delegated Proof of Stake (DPoS) mechanism. They also utilise a form of optimistic rollups where state root updates are accepted by the Dymension Hub optimistically but can be reverted if proven invalid. This adds an extra layer of security by allowing the network to challenge and correct any fraudulent or incorrect transactions.

RollApps, through their unique architecture and integration with the Dymension network, address the blockchain scaling trilemma by enhancing scalability through efficient and optimised block production, maintaining robust security through DPoS and fraud proofs, and supporting decentralisation through interoperability and community engagement. By tackling these challenges, RollApps represent a significant step forward in the development of scalable, secure, and Decentralised Applications (DApps).

How Dymension Works

The use of RollApps is central to how Dymension operates. These are essentially individual, application-specific blockchains (rollups), deployed on the Dymension network, that are customisable and optimised for specific use cases. RollApps are essentially individual, application-specific blockchains (rollups) deployed on the Dymension network, using EBP to produce blocks on-demand in response to network activity.

The RDK is akin to Cosmos SDK but tailored for RollApp development. It facilitates the building of RollApps by providing pre-built modules and necessary tools. Core Cosmos SDK modules like Bank, Gov, Upgrade, and IBC are available, alongside unique modifications like Epochs and specialised Mint modules.

Dymension acts as a hub that connects various RollApps (spokes), enabling interoperability and communication between different blockchain ecosystems. RollApps are capable of interacting with other IBC-enabled chains via the Dymension Hub, fostering a seamless cross-chain experience.

Sequencers are responsible for validating, ordering, and processing transactions within a RollApp. They provide immediate state updates upon transaction submission. Sequencers batch and publish transaction blocks to peer nodes and on-chain data availability networks, adopting an optimistic approach to state validation.

Sequencers batch and publish transaction blocks to peer nodes and on-chain data availability networks, adopting an optimistic approach to state validation. The Hub can revert any state transition if fraud proofs demonstrate invalidity, maintaining network integrity.

Dymension utilises a DPoS consensus mechanism built on Cosmos SDK and Tendermint. It ensures network security while allowing connections to external blockchains. Validators in Dymension participate in block production, maintaining the network’s security and decentralisation.

The DYM token is integral for transaction processing, staking, governance, and as a medium for cross-chain value transfer. Dymension’s economic model dynamically adjusts DYM issuance based on staking ratios and network activity, balancing inflation and token supply.

RollApps use an Escrow Inter Blockchain (IBC) mechanism for bridging, enabling efficient cross-chain asset transfers with a dispute mechanism for security. An embedded Automated Market Maker (AMM) on the Dymension Hub facilitates asset routing and liquidity provision for RollApps.

Why is Dymension Unique?

First, the concept of RollApps, central to Dymension, is a groundbreaking advancement. RollApps are modular, application-specific blockchains that operate on top of the Dymension network. This modular architecture enables developers to create tailored blockchain solutions for specific use cases, ranging from DeFi and gaming to social media applications, without the constraints of a one-size-fits-all blockchain. 

What sets RollApps apart is their ability to outsource the burden of reaching consensus to the Dymension Hub. This allows RollApps to focus on application-specific functionalities while leveraging the security and decentralisation of the Dymension network. The RollApp Development Kit (RDK), akin to the Cosmos SDK but specifically designed for creating RollApps, further simplifies the development process. It offers pre-built modules and tools, making it easier for developers to deploy scalable and efficient blockchain solutions quickly. This approach addresses the blockchain trilemma by offering scalability and customization without compromising on security or decentralisation.

Second, Dymension’s unique approach to interoperability sets it apart in the Web3 space. Unlike traditional blockchain platforms that operate in silos, Dymension acts as a hub that connects various RollApps, enabling seamless interoperability and communication between different blockchain ecosystems. This is achieved through its integration with the Inter-Blockchain Communication (IBC) protocol, allowing RollApps to safely transfer data and value between chains. This feature positions Dymension as a unifying layer in the fragmented blockchain landscape, facilitating a cohesive and interconnected Web3 experience. 

Furthermore, the platform’s use of elastic block production (EBP) ensures that blocks are produced efficiently in response to network activity, significantly reducing the operational costs for RollApp Sequencers and enhancing the overall user experience. By combining these features, Dymension not only solves the scalability and interoperability challenges but also fosters a more inclusive and accessible Web3 ecosystem, where developers can leverage the strengths of various blockchains in a unified framework.

What is the Dymension Ecosystem?

The Dymension ecosystem represents a dynamic and expansive network of modular blockchains, known as RollApps, which collectively form a diverse and rapidly growing landscape within the broader blockchain universe. This ecosystem is quantified and characterised by several key metrics that reflect its activity and growth.

For starters, the Total Value Locked (TVL) in RollApps, amounting to 10,720,391.5 DYM, is a crucial indicator of the ecosystem’s financial health and user trust. TVL measures the aggregate value of assets deposited in the various RollApps, signifying their utility and popularity within the Dymension ecosystem. The 7-day percentage change in TVL provides insights into the short-term growth or contraction trends of the ecosystem.

The number of RollApps listed and deployed, with 1,071 listed and 13,143 deployed, underscores the scalability and ease of RollApp creation within Dymension. This high number of deployments reflects the platform’s ability to cater to a wide range of use cases and developers’ needs, showcasing the versatility and developer-friendly nature of the Dymension ecosystem.

The volume of Total Inter-Blockchain Communication (IBC) Transfers, standing at 10,120,673, highlights the degree of interoperability and cross-chain interactions facilitated by Dymension. This metric indicates the frequency and volume of assets and information being transferred across different blockchain networks within the ecosystem, emphasising Dymension’s role in promoting interconnected blockchain operations.

Finally, the number of Total Active Addresses, at 583,312, is indicative of the user base and community engagement within the Dymension ecosystem. This figure represents the unique wallet addresses that have interacted with the RollApps, signifying the level of adoption and active participation in the ecosystem.

What is the DYM Token?

The DYM token is the native cryptocurrency of the Dymension ecosystem. The DYM token is a versatile and integral component of the Dymension ecosystem, serving various roles from securing the network to enabling governance and facilitating interoperability across blockchain networks. Its design aims to align the incentives of different stakeholders in the ecosystem, promoting active participation, network security, and sustainable growth.

• Dymension operates on a Delegated Proof-of-Stake (DPoS) model, where validators are responsible for securing the network and processing transactions. DYM tokens are staked by these validators or delegated to them by token holders, incentivizing network security and integrity. Validators earn rewards, in the form of DYM tokens, for their contributions to the network.
• DYM token holders have governance rights, allowing them to participate in decision-making processes regarding the future development of the Dymension ecosystem. This includes voting on proposals related to network upgrades, policy changes, and the allocation of resources within the ecosystem.
• Given Dymension’s focus on interoperability and cross-chain communication, DYM tokens facilitate transactions and interactions across different blockchain networks. This includes paying for the costs associated with cross-chain data and asset transfers.
• Dymension integrates an Automated Market Maker (AMM) within its hub, and DYM tokens can be used within this framework. Token holders can contribute to liquidity pools, potentially earning rewards for providing liquidity and enabling efficient asset exchange and price discovery within the ecosystem.
• The supply of DYM tokens is subject to algorithmic adjustments based on staking dynamics. The issuance rate of new tokens is adjusted in response to the proportion of DYM tokens staked, aiming to achieve a balance between network security and token supply.

DYM Tokenomics

How to Buy DYM on Bitfinex?

How to buy DYM with crypto

1. Log in to your Bitfinex account or sign up to create one.

2. Go to the Deposit page.

3. In the Cryptocurrencies section, choose the crypto you plan to buy DYM with and generate a deposit address on the Exchange wallet.

4. Send the crypto to the generated deposit address.

5. Once the funds arrive in your wallet, you can trade them for DYM. Learn how to trade on Bitfinex here.

How to buy DYM with fiat

1. Log in to your Bitfinex account or sign up to create one.

2. You need to get full verification to be able to deposit fiat to your Bitfinex account. Learn about different verification levels here.

3. On the Deposit page, under the Bank Wire menu, choose the fiat currency of your deposit. There’s a minimum amount for fiat deposits on Bitfinex; learn more here.

4. Check your Bitfinex registered email for the wire details.

5. Send the funds.

6. Once the funds arrive in your wallet, you can use them to buy DYM.

Also, we have Bitfinex on mobile, so you can easily buy DYM currency while on-the-go.

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DYM Community Channels

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