Kaspa Meets Dymension

Yishay Harel Omri

Yishay Harel, Omri

— 4 min read
Kaspa Meets Dymension

Kaspa is a high-throughput proof-of-work network built on a blockDAG architecture. While it excels at low latency and decentralization, it lacks native smart contract capabilities. Dymension, an L1 that functions as a rollup launchpad, can complement Kaspa by enabling projects to bootstrap KAS based liquidity and deploy smart-contract rollups to be powered and secured by KAS.

This article outlines how the Dymension protocol facilitates a validator-powered bridge architecture to bring KAS into Dymension, earn yield, raise funds in KAS for launchpad projects, and power Kaspa L2s: rollups that use Kaspa for data availability and KAS as their gas token.
The Kaspa <> Dymension bridge is expected to go live with the Beyond upgrade this November

KAS as a Launchpad Base Asset

Following the Beyond upgrade expected to go live in several weeks, the Kaspa community will be able to use KAS on Dymension’s Chain Launchpad: a platform where emerging Kaspa projects can launch their own tokens, raise liquidity using KAS, and evolve their tokens into Kaspa based rollups.

The launchpad gives the Kaspa community a clear way to create, fund and speculate on new KAS-powered applications without changing the Kaspa base layer, turning KAS into both the fuel and funding base for innovation.

Kaspa <> Dymension: The Bridge

The Validator-Powered Bridge Architecture between Kaspa and Dymension operates using a simple and scalable model:

  • Dymension Validators independently observe events (KAS deposits on Kaspa and wKAS burns on Dymension) and sign attestation messages off-chain when the event is valid.
  • Once a quorum of validator signatures is collected, a relayer submits a single executable transaction (e.g., mint or unlock) that includes the signed attestation, which results in the release or minting of funds based on the validated event.

Kaspa → Dymension: Lock & Mint Flow

  1. A user deposits KAS to the Kaspa bridge wallet controlled by Dymension validators.
  2. Validators observe and verify the deposits and sign an off-chain attestation message.
  3. Once a quorum of signatures is collected, a relayer submits a single transaction to Dymension with the attestation and signatures.
  4. The bridge module, embedded to Dymension L1, verifies the signature set and mints wKAS to the user’s Dymension address.

Dymension → Kaspa: Burn & Unlock Flow

  1. A user submits a withdrawal request with their Kaspa address and burns wKAS on Dymension.
  2. Validators observe and verify the event and sign a Kaspa unlock transaction off-chain.
  3. Once a quorum of signatures is collected, a relayer submits the fully signed Kaspa transaction.
  4. The KAS is released to the user on the Kaspa network.

How Kaspa Rollups Work on Dymension

TL;DR: Powered by KAS as gas token, Kaspa rollups post all transaction data to Kaspa for data availability. The valid state is derived from this data and enforced by the Dymension L1 native rollup bridge logic.

Kaspa rollups on Dymension are powered by the KAS asset, enabling a novel model where rollups accept wKAS as gas while publishing their data directly to the Kaspa network, adding demand for Kaspa blockspace.

The Dymension rollup settlement logic is enshrined in the Dymension L1 chain, acting as a vault for assets deposited into Kaspa rollups. These assets are locked on the L1 and can only be withdrawn according to the rollup's state. The rollup regularly posts state roots to Dymension, and withdrawals are verified against the latest valid state.

This architecture separates data availability from settlement while leveraging the strengths of both chains:

  • Rollups post their transaction data to the Kaspa blockchain, taking advantage of its speed, scalability and decentralization
  • Dymension validators secure the rollup bridge by relying on Kaspa as the source of truth (ensuring rollup state integrity and trust minimized bridging)
  • Dymension validators secure the KAS asset <> Dymension bridge (ensuring wKAS is correctly minted/burned).

Rollup creators can:

  • Bootstrap liquidity in KAS (along with USDC and DYM) for emerging Kaspa projects and tokens by using Dymension’s Launchpad
  • Create KAS-backed stablecoins or lending protocols
  • Develop KAS-native games or marketplaces
  • Form permissionless DeFi with Kaspa-native liquidity

Users can interact with these rollups using KAS-denominated gas fees, with the ability to onboard directly from Kaspa.

Why This Matters for Kaspa

  • KAS as gas: Lets Kaspa ecosystem take its first step into smart contracts without changing the L1.
  • Kaspa as data availability: The Kaspa network get’s increased demand for blockspace and fee revenue for miners by rollups posting transaction data to it.
  • KAS as funding base asset: Dymension’s Launchpad enables the Kaspa community to raise initial liquidity for emerging projects using the KAS token, providing essential utility for KAS and strengthening it’s moneyness.
  • KAS on Dymension’s DEX: KAS holders can use their asset beyond transfers: trade against USDC and other assets, create new KAS trading pairs, and provide liquidity on Dymension’s embedded DEX.
  • Soon after the upgrade: a general-purpose EVM Kaspa L2 will launch - secured by Kaspa network data availability, with KAS as gas.

Dymension: a Universal Launchpad for L2s

The Kaspa integration opens an entirely new Dymension of possibilities for the Kaspa community. KAS can now be used to raise liquidity for new Kaspa projects, form trading pairs on Dymension's embedded DEX, and power KAS based rollups that publish their data on Kaspa increasing it's blockspace demand. Together, this creates a practical, scalable, and secure foundation to kickstart a new wave of Kaspa-native applications and liquidity.