It’s incredibly complex, and not everyone understands it fully, but it’s fascinating nonetheless. Everyone talks about it, but the reasons and purposes behind it are not clear to everyone. Previously, there were L1 solutions, some were EVM-compatible (those in the MM), and others were not. It was all straightforward. Everyone had their solutions, but globally, nobody solved the trilemma – somewhere it’s expensive, somewhere it’s slow, somewhere it’s not decentralized. Then came L2 solutions, some zk, some optimistic, and now we have rollup solutions on demand. What’s the purpose? Let’s delve into it.
For the past month, I’ve been actively delving into this, and I can’t say that I’ve fully understood how everything works. But I’ve pieced together the global puzzle, and that’s more than enough for me.
The main reason for the emergence of L2 solutions is cost-effectiveness, with security akin to Ethereum. After that, the challenges are mainly liquidity and bridges.
What’s the main reason for the emergence of RaaS? Convenience, primarily for developers and projects. Choose the parameters that suit you best and start building without worrying about the environment. Some projects like dydx do everything themselves, while projects like Zora are turning to RaaS. In their case, they chose Conduit, and everything is ready for them.
The main advantage of rollups is that you’re isolated from other dapps, so when there’s an NFT mint, your dapp works fine instead of being stuck until the gas settles. Plus, you can easily adjust all parameters to fit your needs and goals.
You can choose:
- gas payment token
- DA layer
- settlement layer
In other words, you can take ETH-USDT as the gas token, Celestia-Eigen as the DA, and ETH for settlement.
ALT allows you to create your rollup in 3 seconds, but what does DYM do? Dymension – home of the RollApps Dymension Hub acts as the base layer (consensus) that allows anyone (even us) to create their own rollup (L2) on top of it. So, Dymension itself is Ethereum, and our rollups are L2 on it. Essentially, it’s like space itself, but much more interesting. Blocks are created on demand, not always, i.e., only when needed + there’s an enhanced version of Tendermint and SDK modules.
Additionally, liquidity is implemented nicely through IBC – inter-blockchain-communication, see the second screenshot. If we translate it into our more understandable Ethereum language, DYM=ETH, rollapp=L2, IBC=stargate.
In short, Dymension is a decentralized Delegated Proof-of-Stake L1 blockchain secured by the DYM token. It is custom built to provide RollApps with security, interoperability, and liquidity.
And if everything works out, then DYM will become ETH, with a lot of things built on it, and it will be needed by everyone for settlement + drops on staked tokens.
Everyone compares DYM with TIA/ALT/something else, but we can try to compare it with other shields in the ATOM ecosystem. They did it for me, see the third screenshot. If you’re aiming for OSMO/RUNE, the upside is at least 2-2.5x from the pre-market.
This is definitely not fast speculation; you won’t be able to flip it tomorrow (maybe you will, of course), but the plan is to hold it together with the market for some time, and for this token to outperform the rest of the market like TIA does, plus stake DYM and receive drops.