Analysis of Dymension valuation: Expected to open at US$2, but lower than US$0.5 or a better buying point

A listing price below $0.5 would be a good opportunity to seize.

Written by hitesh.eth

Compiled by: Shenchao TechFlow

Recently, Dymension announced the airdrop details. Dymension will issue airdrops to Celestia, Ethereum Layer2, Cosmos, Solana and NFT holders, which has attracted widespread attention from the community. Investors are also paying attention and looking forward to the performance of Dymension token DYM after the opening. Therefore, encryption researcher hitesh.eth wrote an article analyzing the valuation of Dymension, and Shenchao compiled the full text.

What is Dymension?

Think of it as Cosmos customizing a L2 specific chain, where the Dymension hub (its own blockchain) will act as the settlement and liquidity layer. They provide an SDK (they call it an RDK) to launch Rollup with custom design specifications for execution, data availability, fees, governance, and more.

The ultimate goal of Dymension is to provide web3 developers with the flexibility to move away from launching decentralized applications on primary L1, where little to no value is captured in the 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 serves as a powerful way to capture value for the project.

They provide a variety of tools ranging 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 orderers.

Dymension provides many advantages for 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 sequencer. Since these Rollapps need to be settled on the Dymension hub, they also need to pay in DYM to publish their state roots to Dymension.

Dymension has a native AMM module that can be used by any Rollapp, which means that end users need to pay DYM when using an AMM DEX built on the Dymension AMM module.

Dymension supports transactions between Rollapp and Cosmos IBC, where $DYM is used as the gas token.

Last but not least, they plan to launch 2.5% of the token supply to reward those who bridge whitelisted tokens (such as USDC, TIA, SOL, ETH, ATOM, USDT) to the Dymension Hub AMM. They will also offer the option to deposit DYM into an incentivized liquidity pool to earn generous rewards.

The growth momentum for $DYM is set for the short term. In the long term, we need to watch how many major Dapps decide to launch Rollapp. It’s definitely good for the project. We all need to see how the Dymension BD team performs here.

Valuation

Dymension raised $6.7 million in its latest 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 and 2.5% to incentivized bridging. They will also be launching an incentivized liquidity pool so some will be allocated for this purpose as well. Supply).

I think given all the hype and value capture surrounding $DYM, a listing price below $0.50 would be a great opportunity to take advantage of. Frankly, I wouldn’t mind it continuing to rise after listing at $2, as I believe they provide enough value capture opportunities for holders to earn additional rewards by staking and providing liquidity.