Written by: hitesh.eth
Compiled by: TechFlow
Recently, Dymension announced the details of the airdrop. Dymension will distribute airdrops to Celestia, Ethereum Layer2, Cosmos, Solana and NFT holders, which has attracted widespread attention from the community. Investors are also looking forward to the performance of Dymension token DYM after the opening. For this reason, crypto researcher hitesh.eth wrote an article to analyze Dymension's valuation, and Shenchao compiled the full text.
What is Dymension?
Think of it as Cosmos for custom L2 specific chains where the Dymension hub (its own blockchain) will act as the settlement and liquidity layer. They provide an SDK (which they call RDK) to launch Rollups with custom designed specifications around execution, data availability, fees, governance, etc.
The ultimate goal of Dymension is to provide web3 developers with the flexibility to move away from launching decentralized applications on major L1s where they gain little to no value from transactions that occur on their chain.
Dymension incentivizes them to launch fully customized rollups based on their use case needs and charge transaction fees in their own tokens, which can serve as a powerful value capture method for projects.
They provide a variety of tools, from execution support for EVM, COSWASM, POLARIS to their own execution environment called RVM. They provide support for different DA layers such as Celestia, Avail. They also allow projects to decentralize their sorters.
Dymension offers many advantages to web3 projects. What do they expect in return?
Dymension has a native token $DYM and requires Rollapp to stake at least a certain amount of $DYM to run Rollup through the sorter. Since these Rollapps need to settle on the Dymension hub, they also need to pay fees in DYM to publish their state roots to Dymension.
Dymension has a native AMM module that any Rollapp can use, which means that end users need to pay DYM when using an AMM DEX built on the Dymension AMM module.
Dymension supports transactions between Rollapps and Cosmos IBC, where $DYM is used as a gas token.
Last but not least, they plan to launch 2.5% of the token supply to reward people who bridge whitelisted tokens (such as USDC, TIA, SOL, ETH, ATOM, USDT) to the Dymension Hub AMM. They will also provide the option to deposit DYM into incentivized liquidity pools to earn generous rewards.
The growth momentum for $DYM is set in the short term. In the long term, we need to see how many major Dapps decide to launch Rollapp. There are definitely benefits for the projects. We all need to see how the Dymension BD team plays a role here.
Valuation
Dymension raised $6.7 million in their most recent funding round at a fully diluted valuation (FDV) of $200 million. They have a total of 1 billion tokens, and the expected circulating supply is probably a little over 9.5% (7% allocated to airdrops, 2.5% to incentivized bridging, they will also be launching an incentivized liquidity pool, so some supply will be allocated for that purpose as well).
I think a listing price below $0.50 would be a good opportunity to grab given all the hype and value capture surrounding $DYM. Frankly, I wouldn't mind if it listed at $2 and continued to rise because I believe they provide enough value capture opportunities for holders to earn additional rewards by staking and providing liquidity.