Is Dymension L1 or l2?

In the realm of cryptocurrency and blockchain technology, the question of whether Dymension operates on Layer 1 (L1) or Layer 2 (L2) remains a pivotal inquiry. Given the significance of scalability, security, and interoperability within these layers, it's crucial to understand Dymension's positioning. Layer 1, often referred to as the base layer, typically encompasses the core blockchain protocol, while Layer 2 solutions aim to enhance the base layer's performance by handling transactions off-chain. Could you elaborate on Dymension's choice of layer and how it impacts its overall functionality and potential within the cryptocurrency ecosystem?