Dolomite

Lending

Dolomite is a margin lending protocol and DEX on Arbitrum that's built around capital efficiency.

Risk Rating
Watch Out
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
Dolomite enables users to earn more on their holdings by providing liquidity to AMM pools, earning interest from margin lending, and yield farming with leverage.
What we like less
Dolomite may have limited liquidity or volume compared to other established DEXs or margin platforms. The protocol is also centralized with admin rights controlled by a 2/3 multisig.
What it means for you
Dolomite is a promising platform for traders and investors who want to access more ways to trade and earn on crypto assets in a decentralized way.
Podcast
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Degen Responsibly
Dolomite: A Next-Gen Protocol for Borrowing, Lending & Trading
Our guests today include Corey Caplan & Adam Knuckey, Co-founders at Dolomite, along with Bobo, Head of BD and Growth. Dolomite is a next-generation money market protocol and decentralized exchange (DEX) protocol that enables users to borrow, lend, trade and farm with leverage on various DeFi assets. In this conversation, we explore how you can earn more yield on your assets through Dolomite's capital-efficient architecture, leveraged strategies and integration with other protocols. We also discuss the risks associated with money markets and how Dolomite manages and mitigates them. ----- Degen Responsibly is a series of live talks by Exponential DeFi and a guest protocol. In these conversations we explore some of the latest and greatest projects in DeFi, what makes them unique, their builders but also talk about the risks and what to watch out for. Our goal is to help investors make better informed decisions and help them save time as they do their own research. ----- Learn more about us at exponential.fi and follow us @exponentialdefi ----- Information provided here is presented for educational purposes only and does not consider financial advise or any offer or solicitation to buy any of the tokens or invest in any of the pools mentioned throughout the podcast.
Information
Exploit/Hacks
None
Info
Key Metrics
  • TVL: $38.7M (Rank #99)
  • TVL Ranking by Lending: #20
  • Blockchain: Arbitrum
  • Chain TVL
    • Arbitrum: $38.75M
Risk Assessment
Watch Out
Protocol Code Quality
  • Code reviewed by several experienced auditors; see audit reports
  • Public team promotes accountability
  • No documented protocol hacks since launch
Protocol Maturity
  • Latest protocol version launched in 2022; maturity over one year minimizes technical risk as smart contracts are well battle-tested
  • Bottom 80% by total value locked increases risk
  • Multisig wallet controls protocol upgrades
  • Multisig consists of less than 4 signers, which makes the protocol more susceptible to centralization risks
  • Timelock is less than 48hrs, which provides users with less time to exit if any malicious upgrades are approved
  • No governance token and/or contracts are fully immutable
Protocol Design
  • No death spiral concerns
  • Robust controls to mitigate oracle price manipulation
  • Secured lending market that uses a combination of isolated and cross-collateral pools depending on the individual asset serves to reduce risk
  • Solid controls in place to prevent risky borrowing
  • Solid mechanisms in place to ensure healthy liquidations
  • No reserves or no stability module
Things to know about Dolomite

How Dolomite works

Dolomite is a decentralized money market and DEX that runs on Arbitrum, an Ethereum Layer 2 scaling solution that reduces gas fees and increases transaction speed. It allows users to lend, borrow, trade, margin, and hedge various crypto assets with greater capital efficiency and broader asset support than other protocols. Each ERC20 token asset supported by Dolomite has a Market that specifies the Price Oracle, the Interest Setter contract, and other essential Risk parameters. Only the protocol administrator can list new markets, but the DAO will eventually have the right to add assets through an ownership adapter. Dolomite uses a virtual liquidity system that enables users to provide liquidity to AMM pools, earn interest from margin lending, and yield farm with leverage at the same time. It also supports multiple borrow positions from the same wallet, each collateralized by up to 32 different assets, and allows for a wider range of assets to be used as collateral, such as staked or interest-bearing tokens. Dolomite integrates with other DeFi projects and offers a highly composable protocol that can be accessed through a web browser or a mobile app.

How Dolomite makes money

At present, Dolomite does not generate any revenue and does not have its own token. Users can deposit and withdraw their funds at any time without incurring additional fees, except for the standard gas fees. Those who wish to borrow from the protocol will pay an interest rate determined algorithmically. Borrowers are not required to pay any origination fees. When executing trades on the AMM pools, users will be charged a flat fee of 0.3%, which will go to liquidity providers. After the DAO is implemented, trade fees will be split 0.2% to liquidity providers and 0.1% to the DAO. The transition to a DAO will result in all fees generated by the protocol through trading fees, interest spreads, liquidations, and other means being transferred to the DAO.

How you make money on Dolomite

Dolomite offers various ways to earn income from your crypto assets. You can trade on margin with leverage and low fees, provide liquidity to AMM pools and earn trading fees, liquidate risky positions and earn rewards, yield farm with leverage and multiply your rewards, and borrow against staked tokens to unlock their value.