Overview
Dolomite is a decentralized finance (DeFi) protocol offering a comprehensive set of tools for money market and margin trading activities. Launched in late 2022, the platform was developed to maximize asset utility and capital efficiency within DeFi markets. It enables users to leverage assets for a range of functions simultaneously, including lending, liquidity provision, and yield farming. Key features include support for over-collateralized loans, margin trading, and a DEX (decentralized exchange) with enhanced portfolio management tools
Core Features
Dolomite’s modular architecture consists of an immutable base layer paired with customizable modules. This setup preserves the security of user assets while allowing the platform to adapt to evolving DeFi needs. Key aspects of Dolomite include:
- High Capital Efficiency: Dolomite’s infrastructure enables assets deposited for lending to concurrently participate in liquidity pools and earn fees without transferring ownership. The protocol also allows these pooled assets to be collateralized for additional financial strategies, such as margin trading
- Low Gas Fees: Operating on Arbitrum and Polygon zkEVM networks, Dolomite is optimized for minimal transaction costs and faster processing times than Ethereum mainnet. This makes it suitable for high-volume traders seeking to minimize costs
- DeFi-Native Rights Retention: Dolomite allows users to retain governance rights, staking rewards, and other asset-based benefits while using assets on the platform. This ensures that users maintain full control and utility of their tokens even when engaging in lending or liquidity activities.
Lending, Borrowing, and Margin Trading
Dolomite’s platform supports a wide array of assets that can be borrowed or used as collateral. Borrowers can manage multiple collateralized loans from a single wallet, with isolated positions that protect each loan from affecting others in case of liquidation events. Margin trading, another central feature, allows users to engage in leveraged trading directly on the DEX while managing risk through diverse collateral options
Ecosystem and Collaborations
The Dolomite ecosystem is built with interoperability and collaboration in mind. It integrates with protocols such as Chainlink for reliable price feeds and OffChain Labs for Arbitrum security, enhancing both the functionality and safety of its user operations. By supporting various Layer-2 scaling solutions, Dolomite is positioned as a flexible, future-proof platform that can adapt to and integrate with other DeFi innovations
Mobile Accessibility and Developer Focus
Dolomite’s mobile app enables users to manage their portfolios and trade on the go, addressing the demand for mobile-friendly DeFi solutions. Developers are encouraged to build on Dolomite’s architecture due to its stable, non-upgradable smart contracts, which provide a dependable foundation for integration without concerns over future disruptions. This developer-first approach strengthens the broader DeFi ecosystem, encouraging the creation of new tools and applications
Funding and Growth
In 2023, Dolomite raised $2.5 million in a funding round led by Draper Goren Holm and backed by Coinbase Ventures, WWVentures, and others. The capital injection has supported its growth across multiple chains and development of advanced DeFi features. Dolomite aims to expand its footprint in the DeFi space while focusing on delivering high-utility services without dependency on incentives
