His name was revealed by his plush's product name which was up before the official Shop was open.
Dippy is the product of a cloning experiment gone wrong. The hope was to create a super species that could live under water. The result was a witless, water-obesessed creature who dipped his body parts in any liquid. This included his doctor's soup, the toilet and of course, piranha-infested waters. The experiment is closed until further notice.
In the video
Dippy is seen (with his bottom half uneaten) jumping in to water, and then jumps up with piranhas. Clinging to his bones, revealing his now half-skeletal bottom half. He kicked a piranha off in the first chorus.
In the game, Dippy has already jumped into the water, and the player must flick away any piranhas that appear, or else the piranhas will eat Dippy. If you win, he keeps dancing in the water.
There is another minigame where you have to guide Dippy's boat with a hole in it to the island by swiping right. If Dippy's boat makes it to the island, he will get off of the boat and gyrate again. Otherwise, the boat will sink and Dippy will get eaten by piranhas, resulting in failure.