Dymension Blockchain Development

Dymension is a blockchain dedicated exclusively to settlement and introduces a novel concept: RollApps. It manages state and communication among RollApps that are built on its technology stack. RollApps feature a modular architecture and are tailored for specific applications. While Ethereum permits anyone to deploy a token without needing permission, Dymension enables anyone to launch a Rollup freely.

Ethereum has introduced EIP-4844, a new data availability framework for Dencun rollups. Solana is advancing with Firedancer, a next-gen client developed by Jump Crypto. Meanwhile, Cosmos continues to evolve along its modular path. The Big Three are all transforming and converging into the blockchains of the future.

Dymension serves as a new settlement layer within the Cosmos ecosystem, delivering an optimal user experience for launching and operating new chains. The era of modular architecture has arrived, and the stakes are significant. Network effects in the cryptographic space are paving the way for potential dominance in the modular stack, and Dymension aims to be the foundational settlement protocol for the next generation of application-specific federations.

RollApp is a blockchain tailored for specific applications, developed using the Dymension RollApp Development Kit (RDK). It utilizes Dymension Hub for settlement and a data availability (DA) solution. Importantly, RollApps are DA agnostic, meaning any DA solution compatible with the Inter-Blockchain Communication (IBC) protocol can be employed.

RollApps transmit data to their selected DA layer and send state information to Dymension Hub. While this may seem complex, it’s essential to recognize that in a modular architecture, blockchains are segmented into distinct components, each optimized for its purpose.

Projects like Celestia offer data availability and reconciliation, while Dymension Hub serves as the settlement layer, and RollApps manage off-chain execution, reporting state back to Dymension. Rather than relying on a single chain to perform all these functions, developers can leverage modular building blocks to create bespoke chains. This approach enables custom runtimes designed for specific applications, greatly enhancing scalability.

RollApp Development Kit

The Cosmos Software Development Kit (SDK) includes pre-configured modules that developers can utilize to expedite the creation of application-specific chains. Another integral component of the Cosmos stack is the Tendermint consensus engine, which facilitates transaction validation and synchronization across blockchains.

What Innovations Does the RDK Introduce?

The RDK preserves several foundational modules from the Cosmos SDK:

Bank: Manages token transfers.

Governance: Enables network proposals and voting processes.

Update: Oversees software updates.

IBC: The Inter-Blockchain Communication protocol.

Additionally, the RDK incorporates new smart contract platforms, including support for EVM smart contracts, allowing for the development of EVM RollApps. It also introduces features such as Epochs and Elastic Block Production, Sequencers for account creation that rewards RollApp operators, a time-based minting module for token generation called Mint, a distribution method for rewards among Sequencers, participants, and the community pool known as Dist, and Stake, which acts as a wrapper around the existing staking module within the Cosmos SDK.

Dymint and Its Role in Dymension

Dymint serves as a replacement for Tendermint. Rather than each application chain relying on its own set of validators, they gain security from Dymension and utilize a sequencer instead. This represents a significant advancement and is Dymension’s most notable contribution to modular development. Dymint handles communication, messaging, and block generation, while execution decisions are left to the RollApp operator.

The introduction of a sequencer benefits all parties involved. RollApps can utilize their own tokens as gas and earn rewards, providing essential financial incentives that enhance the appeal of using RollApps, all while benefiting from Dymension’s security framework. This has historically been a gap within the Cosmos ecosystem; even solutions like Interchain Security have had their shortcomings. Dymension’s approach maintains financial incentives while reducing the complexity and costs associated with launching new chains. The use of the RDK and Dymint’s technology stack accelerates the blockchain creation process.

Dymension acts as the foundational chain for the next generation of application-specific Layer 2 solutions within the Cosmos ecosystem, solidifying its position as the settlement layer. It simplifies trust assumptions, requires minimal effort for deployment, and maximizes security.

Dymension functions as an internet service provider for application chains, fully unlocking human potential and enabling anyone to operate a RollApp.

Understanding the Distinction Between Rollups and RollApps

The world of cryptocurrency often presents a confusing array of definitions for rollups, which vary based on their data publication methods and specific validity proofs. RollApps, however, represent a distinct concept. The key difference lies in the fact that Rollups scale a single network, whereas RollApps scale a network of networks.

A Rollup functions as an execution engine that processes off-chain transactions and sends summarized data back to the parent chain. In contrast, a RollApp is a chain designed for specific applications, operating within an IBC environment and benefiting from full interoperability, data availability, and the security provided by Dymension. While Rollups focus on enhancing Ethereum’s scalability and increasing its transaction capacity, RollApps are intended to scale innovative ideas and facilitate the seamless deployment of application-specific chains.

Rollups on Ethereum have progressed from a flawed starting point. Dymension, taking a broader perspective, aims to enhance the fundamental aspects of scaling through RollApps. Instead of building upon an unstable foundation, Dymension is restructuring the layer to create a “clean slate” for significant future growth.

The Evolution of Cosmos App-Chains

Cosmos is recognized as a trailblazer in the modularity movement, having consistently kept a clear distinction between consensus (Tendermint) and application (Cosmos SDK). This separation has now been refined further. The Inter-Blockchain Communication (IBC) protocol, which had not been previously utilized, standardizes messaging and communication, facilitating seamless asset transfers across the Internet of Blockchains. The App-Chain philosophy has long emphasized the importance of building blockchains designed for specific use cases and has equipped developers with the necessary tools to accomplish this. Dymension embodies the next stage of this evolution.

Data availability solutions have made accessing information more cost-effective than ever. Dymension offers the Dymension Hub for settlement and provides pre-built modules from its RDK to streamline the construction and deployment of chains. The primary aim of Dymension is to simplify the process of deploying application chains while leveraging the abundant talent available in the ecosystem.

Dymension functions exclusively as a settlement layer and complies with the IBC standard, creating open communication channels and transfer pathways among all RollApps. This structure resolves issues related to fragmented liquidity and eliminates the need for third parties in fund transfers, enabling developers to build chains without the hassle of setting up validator sets.

The Dymension experience is reshaping chain deployment in a manner similar to how Ethereum revolutionized token deployment. Developers can now initiate chains, while users can invest capital, representing a next-generation approach to the app-chain concept.

Dymension and RollApps

Dymension is currently operational on its testnet, featuring 1,164 listed RollApps. To emphasize, Dymension is heavily relying on human creativity. With virtually no barriers to entry, anyone with a concept can launch a RollApp. The economic incentives provided by Dymension are appealing to all stakeholders: sequencers earn fees based on the popularity of their RollApp, while DYM participants receive rewards for securing all these RollApps.

RollApps on the Dymension Testnet

As the internet has evolved, it has become increasingly modular, a trend mirrored in today’s blockchains. Dymension’s RDK and Dymension Hub deliver infrastructure in a manner similar to how Web2 companies leverage Amazon Web Services (AWS) instead of managing their own systems.

All of these RollApps benefit from the IBC protocol, which addresses the composability challenge. Indeed, the cryptocurrency space has reached a point where performance is the key competitive factor, and the infrastructure for building nearly everything is already in place.

DYM Tokenomics

The Dymension team has been developing the project for approximately three years. On February 6th, the DYM airdrop occurred alongside the mainnet launch, distributing seventy million DYM tokens (7% of the total supply). Key beneficiaries included Celestia stakers (2%), Tier 2 users (1%), stakers from Cosmos Hub and Osmosis (1.75%), Solana users (1%), and holders of NFT collections such as Pudgy Penguins, Mad Lads, Tensorians, and Bad Kids (1.25%).

With Celestia expanding and market conditions thriving, interest in modular finance is on the rise, making the launch both timely and successful. The proprietary Automated Market Maker (AMM) technology is in place, and incentives are already being developed. RollApps will soon be available on the mainnet, with no significant unlocks anticipated until next year.

How Does DYM Distribute Value?

Dymension’s primary role is to provide settlement and security for RollApps, along with modular development kits. This naturally implies that those providing security — DYM stakers — add value to the ecosystem. They hold a privileged position compared to other networks, which often face trade-offs in value distribution.

Key mechanisms for value accrual include token burning, funded by validation intermediary fees and protocol exchange fees. Transaction fees are gathered in block space and redistributed to validators and their stakers.

DYM represents modular money, and the synergy between Celestia and Dymension is beginning to create a powerful flywheel effect. Re-establishing itself as a core component of the stack, along with the composability of RollApps, paints an optimistic future. Unlike Ethereum’s Layer 2 solutions, which struggle with composability, and monolithic chains like Solana, which lack the flexibility for developers to create their own runtimes, Dymension offers a more appealing alternative.

This modular stack is the groundwork for future applications, with the potential for tens of thousands of RollApps to be deployed in this cycle. Dymension outperforms the Cosmos SDK and Tendermint because RollApps do not need validator sets. As more RollApps are added, joining the hub becomes increasingly attractive for developers. Furthermore, due to the nature of Proof of Stake, the security provided by Dymension will enhance as the token price rises and additional RollApps integrate into the network.