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What is Dymension (DYM)?
Dymension is the central hub of a modular blockchain ecosystem. Its core goal is to provide a secure and efficient settlement and communication layer for 'RollApps' (modular second-layer application chains).
Core concept: Dymension itself does not run applications; it is an 'internet of Rollups'. It positions itself as the home of RollApps, responsible for their security, interoperability, and liquidity.
RollApp: These are customizable application chains in the Dymension ecosystem, focusing on executing application logic (e.g., a game RollApp or a DEX RollApp).
DYM Token: The native token of Dymension Hub, used for staking to secure the network, pay network fees, and participate in governance.
In simple terms, Dymension is a 'hosting center and settlement layer for Rollups.'
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What is Dymension (DYM) analogous to in the real world?
You can compare Dymension (DYM) to:
The 'modular application store' + 'settlement center' of the digital world.
1. App Store: Dymension Hub is like a decentralized 'app store' or 'cloud hosting center.' Developers can easily deploy their customized application chains (RollApps) on it.
2. Settlement Center: It handles asset transfers and settlement of transactions between all RollApps, ensuring they can communicate safely and quickly.
3. DYM Fuel: The DYM token acts as the 'fuel' and 'security deposit' required for using this hosting and settlement center.
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What is the value and main business of Dymension?
The core value of Dymension lies in simplifying the deployment and operation of Rollups, lowering the threshold for developers to create application chains, and unifying liquidity in the modular ecosystem.
Main business/use cases:
1. Rollup settlement and security: Dymension Hub verifies transactions of RollApps and provides security guarantees.
2. Liquidity sharing: Shared liquidity through the Hub allows assets on RollApps to be easily exchanged.
3. DYM staking and fuel: The DYM token is used for staking to secure the Hub and serves as fuel for RollApps to pay settlement service fees to the Hub.
4. Governance: DYM holders participate in key decision-making votes for the network.
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What are the core technologies and core competencies?
Core Technology: RollApps and IBC Protocol
1. RollApps: Dymension Hub relies on its RollApps, which can use different execution environments (like EVM, Cosmos) and focus on application logic.
2. IBC Protocol: Dymension utilizes IBC (Inter-Blockchain Communication Protocol) to enable secure, seamless communication between all RollApps connected to the Hub.
3. DA Integration: Dymension can integrate with modular data availability (DA) layers like Celestia, further optimizing the cost and scalability of RollApps.
Core Competitiveness: Ease of use of Rollups and unified liquidity
1. Developer Toolkit: Provides RollApp Development Kit (RDK), greatly simplifying the creation and deployment process of Rollups.
2. Shared Liquidity: The built-in AMM (Automated Market Maker) on the Hub can aggregate the liquidity of all RollApps, solving the liquidity fragmentation problem.
3. Deep Integration with Cosmos Ecosystem: Based on Cosmos SDK, enabling easy access to assets and technologies in the Cosmos ecosystem.
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What are the profit sources of Dymension?
For Dymension Hub: The protocol generates revenue through service fees and token issuance.
1. Transaction Fees: RollApps pay settlement service fees to the Hub (in DYM form).
2. Token Issuance (Inflation): New DYM tokens are issued through staking rewards, used to reward validators and stakers.
For DYM token holders: The main profit/income sources are:
1. Investment returns from price appreciation: The price difference from buying and selling DYM.
2. Staking Rewards: By staking DYM to secure the Hub, new DYM token rewards are obtained.
3. Revenue sharing from transaction fees: Earnings from settlement fees paid by RollApps.
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What factors affect the price of Dymension?
1. The number of RollApps and TVL (most important): The number of RollApps deployed on Dymension Hub and the total locked value (TVL) of these application chains.
2. The trading activity of RollApps: The user transaction volume and gas fee consumption on RollApps directly affect the utility demand for DYM.
3. Modular ecosystem collaboration: The cooperation and integration effects with DA layers like Celestia.
4. Macroeconomic cryptocurrency market: Influenced by Bitcoin and the overall sentiment of the Cosmos/modular sector.
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Summary of similar virtual currencies and advantages
Similar virtual currencies/platforms
Dymension belongs to the modular blockchain and Rollup infrastructure sector:
Celestia (TIA): Modular data availability layer (Dymension's partner).
Polkadot (DOT) / Cosmos (ATOM): Multi-chain interoperability platform (Dymension is built on Cosmos SDK).
Arbitrum (ARB) / Optimism (OP): General L2 Rollup platform.
The advantages of Dymension
| Advantages | Simple Explanation |
| Rollup Customization | The RDK toolkit greatly simplifies the deployment of application chains (RollApps). |
| Native Liquidity | AMM is built into the Hub, unifying liquidity across all RollApps. |
| Shared Security | RollApps inherit the security guarantees of Dymension Hub. |
| Strong Interoperability | Utilizing the IBC protocol, seamless communication has been achieved between RollApps and the Cosmos ecosystem. |
| Modular Leader | As a Hub focused on Rollup settlement, it is a key component in the modular blockchain stack. |
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