Dymension: Powering the Internet of RollApps
By Selene Wang | Crescent City Capital Market Analyst Intern
1. Introduction to Dymension
Dymension is a network of easily deployable and lightning fast modular blockchains called RollApps. The main idea behind this project is to enable anyone to create and deploy their own blockchain in a simple and efficient way.
Dymension focuses on overcoming the common challenges of blockchain technology, known as the “blockchain trilemma,” which is balancing scalability, security and decentralization. To address this, it uses a set of tools called the RollApp Development Kit (RDK), which simplifies the process of building specific blockchain applications.
2. How does it work: RollApps
RollApps are scalable consensus-free blockchains built using the RollApp Development Kit. RollApps leverage Dymension for security and access to liquidity. Unlike traditional blockchains, which manage a distributed set of validators, RollApps publish transaction data to a different blockchain so anyone can validate the correctness of the state.
- Tokens – RollApps have the capability to charge gas for transactions in custom tokens, mint new tokens, and distribute tokens.
- Governance – RollApps are equipped with a decentralized, onchain governance mechanism. Enabling the distribution of control over certain onchain decisions and funds owned by the RollApps.
- Bridging – RollApps are equipped with IBC (Inter-Blockchain Communication) bridging, giving access to the extensive IBC ecosystem which includes native currencies such as USDC, USDT, and others.
RollApps utilize Dymint to process transactions and network the created blocks. This core functionality enables the RollApp architecture. Dymint implements elastic block production (EBP) for significantly greater operating efficiencies. Instead of continually publishing blocks with no transaction data, blocks are produced on-demand as transactions arrive into the mempool of a Sequencer. This is designed to significantly reduce the operating costs of a RollApp Sequencer.
3. Tokenomics: The DYM Token
The DYM token plays a crucial role in the Dymension platform as it has several key functions. It is used to process transactions, perform staking, to ensure governance and as a means to transfer value between different blockchains. In addition, its economic model dynamically adjusts the issuance of DYM tokens based on network activity and staking ratios, balancing inflation and token supply.
4. Market Analysis
Price & Market Cap Performance:
- Live price: $1.29
- All-Time High: $8.50 (Feb 14, 2024)
- All-Time Low: $0.9729 (Aug 05, 2024)
- Live market cap: $257,699,651
- Circulating supply: 199,013,510 DYM coins
Past performance:
On the 6th of February, the DYM airdrop took place, coinciding with the mainnet release. Due to its unique approach to blockchain scaling solutions, the initial excitement led to a sharp rise in its price.
Like many cryptocurrencies, DYM experienced significant volatility throughout 2024. After reaching its peak, the token faced corrections and the price declined continuously. Dymension launched a series of updates, including new features for enhanced scalability and security (e.g. 3D Upgrade). Despite these developments, the price still faced pressure.
Technical analysis:
Moving Averages (SMA) Analysis: The long-term SMA stands at $0.432, which is above the 20-day and 50-day SMAs. The market is still struggling to break above the current price level.
Relative Strength Index (RSI) Analysis: The current RSI is 43.17, which falls within the neutral to slightly oversold range. If the RSI drops below 30, the token might become oversold, potentially signaling a buying opportunity.
The technical indicators suggest that Dymension (DYM) is currently in a consolidation phase. The overall trend is still unclear, and the market seems to be waiting for a catalyst that could push the price decisively in one direction.
5. Summary
The development of Rollapps may be one of the critical points for the growth and adoption of blockchain technology on a mass level. As more projects begin to leverage the virtues of this technology, we will see more and more users joining the crypto ecosystem. Therefore, the growth potential of platforms like Dymension is very large.
Given the current performance of Dymension (DYM), it may not be an ideal time to invest. The market shows signs of uncertainty, with the price fluctuating and the overall trend remaining bearish. It would be prudent to wait for new updates or developments from Dymension before considering any investment decisions.
Reference
https://coinmarketcap.com/currencies/dymension
https://crypto-economy.com/dymension
https://www.coingecko.com/learn/what-is-dymension-dym-rollapps-modular-crypto