What is Dolomite (DOLO)?

TLDR Dolomite (DOLO) is a decentralized money market protocol designed to optimize capital efficiency for lending, borrowing, and trading while preserving users’ control over their assets.

1. Dynamic Collateral System – Users retain utility of assets (staking, voting) while borrowing against them.
2. Modular Architecture – Supports cross-chain interoperability and integrates with DeFi ecosystems like Arbitrum and Berachain.
3. Governance Token – DOLO aligns incentives via a burn-and-mint model and governs protocol upgrades.

Deep Dive

1. Purpose & Value Proposition

Dolomite solves inefficiencies in traditional DeFi lending by allowing users to maintain asset utility (e.g., staking rewards, governance participation) even when used as collateral. Its Smart Debt & Collateral system lets users earn trading fees and lending yields simultaneously, offsetting borrowing costs. The protocol also offers automated strategies like delta-neutral farming, democratizing complex DeFi tactics.

2. Technology & Ecosystem

Built on a modular architecture, Dolomite supports 1,000+ assets and integrates with multiple chains (Ethereum, Arbitrum, Berachain) via Chainlink’s CCIP. Key features include:
- Automatic E-Mode: Adjusts loan-to-value ratios based on asset correlations for safer leverage.
- Zap: Simplifies flash loans into one-click leveraged positions.
- Strategies Hub: Offers pre-built tools for looping, hedging, and yield farming.

3. Tokenomics & Governance

DOLO tokens, launched in April 2025, use a burn-and-mint model to incentivize long-term participation. Holders govern protocol parameters like interest rates and collateral factors. Cross-chain compatibility (via ERC-20 standards on Ethereum, Berachain, and Arbitrum) ensures liquidity and accessibility across networks.

Conclusion

Dolomite redefines DeFi efficiency by blending collateral flexibility with cross-chain composability, all governed by a token designed for sustainable growth. As the protocol expands to Bitcoin Layer 2 solutions like Botanix, will its architecture scale to meet diverse blockchain ecosystems?