A listing price below $0.5 would be a great opportunity to seize.
Authored by: hitesh.eth
Translated by: DeepTechFlow
Recently, Dymension announced the airdrop rules. Dymension will airdrop tokens to Celestia, Ethereum Layer2, Cosmos, Solana, and NFT holders, which has attracted widespread attention in the community. Investors are also eagerly anticipating the performance of the Dymension token, DYM, after it is listed. In this regard, cryptocurrency researcher hitesh.eth has written an analysis of Dymension's valuation, and DeepTechFlow has translated the entire article.
What is Dymension?
It can be seen as a Cosmos for custom L2-specific chains, where the Dymension hub (its own blockchain) will act as a settlement and liquidity layer. They provide an SDK (which they call RDK) to launch Rollup using custom design specifications for execution, data availability, fees, governance, etc.
Dymension's ultimate goal is to provide flexibility for web3 developers, enabling them to break free from the way decentralized applications are launched on major L1, where transactions on their chain hardly capture any value.
Dymension incentivizes the launch of fully customized rollups according to their use case requirements and collects transaction fees in their own tokens, which can serve as a powerful value capture mechanism for the project.
They provide various tools, from EVM, COSWASM, POLARIS execution support to their own execution environment called RVM. They support different DA layers (such as Celestia, Avail). They also allow projects to decentralize their sequencers.
Dymension offers many advantages for web3 projects. What do they expect in return?
Dymension has a native token, $DYM, and requires Rollapps to stake a certain amount of $DYM to run Rollup through sequencers. Since these Rollapps need to settle on Dymension, 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 end users will need to pay DYM when using an AMM DEX built on Dymension's AMM module.
Dymension supports transactions between Rollapps and Cosmos IBC, where $DYM is used as the gas token.
Last but not least, they plan to release 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 incentivized liquidity pools to earn generous rewards.
The growth incentive for $DYM has been set in the short term. In the long term, we need to observe how many major Dapps decide to launch Rollapps. It is definitely beneficial for the project. We all need to see how the Dymension BD team will play a role here.
In terms of valuation:
Dymension raised $6.7 million in a recent round of financing at a fully diluted valuation (FDV) of $200 million. They have a total of 1 billion tokens, and the expected circulating supply may be slightly higher than 9.5% (7% allocated for airdrops, 2.5% allocated for incentivized bridging, and they will also launch incentivized liquidity pools, so some supply will be allocated for this purpose).
Considering all the speculation and value capture surrounding $DYM, I believe a listing price below $0.5 would be a great opportunity to seize. Frankly, I wouldn't mind if it continues to rise after listing at $2, because I believe they have provided enough value capture opportunities for holders to earn additional rewards through staking and providing liquidity.
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