TL;DR: Dolomite is a DeFi lending + trading platform that lets you use a huge variety of tokens (1000+), borrow against them, and still keep the benefits those tokens give you (staking rewards, governance, etc.). Think of it as a smarter money-market that squeezes more usefulness out of every token you hold.
What is Dolomite?
Dolomite is a decentralized money-market and trading system (built on fast L2s like Arbitrum) that combines lending, borrowing, and trading in one place — but with two big twists:
1. It accepts a ton of different assets (not just ETH/USDC), and
2. It preserves the “utility” of those assets while you use them as collateral.
In short: you can put your tokens to work without losing the perks they already give you.
How it actually works (simple flow)
. You deposit a token into Dolomite.
. Dolomite records your deposit using internal accounting so your token can simultaneously: earn yield, act as collateral, and be used in trades — without constantly moving the token on-chain.
You can borrow other tokens, open isolated debt positions, or run prebuilt strategies.
. If you want governance influence or fee rewards, you lock or use DOLO (the platform token) in the governance system
The features you’ll care abou
Support for 1,000+ assets: LP tokens, staked tokens, yield-bearing tokens and many non-standard tokens are usable as collateral.
Dynamic Collateral: Use an asset as collateral and keep earning staking rewards or voting power — Dolomite tries to preserve those benefits.
Virtual Liquidity / Capital efficiency: Internal bookkeeping (instead of shuffling tokens everywhere) makes operations cheaper and faster.
Isolated positions: Open multiple borrow positions under one wallet so a risky bet in one position doesn’t wipe out everything.Strategies Hub & Zaps: Prebuilt strategies and one-click flows for users who don’t want to stitch together complex moves manually.
Layer-2 friendly: Built to run on fast, low-fee rollups so your trades and transactions don’t cost an arm and a leg.
Token & governance (short)
DOLO is the protocol token.
You can lock DOLO into a vote-escrow form (veDOLO) to gain governance power and some rewards.
DOLO is used for governance proposals, incentives, and alignment of long-term holders with the protocol.
Why people use it (the good stuff)
Stop letting assets sit idle — use LP or staked tokens as collateral without losing their yield.
More options for borrowing or taking leverage because many tokens are accepted.
More capital efficiency = lower fees and fewer unnecessary on-chain transfers.
Advanced tools let both newbies and power users run strategies.
Risks & things to watch
Smart-contract risk: Bugs or exploits are possible — audits help but aren’t foolproof.
Liquidity risk: Some supported tokens may be thinly traded; big moves can slippage or trouble unwinding positions.
Complexity: More features = more ways to make a mistake; understand isolation, liquidation rules, and how collateral works.
Governance concentration: veDOLO power is only useful if voting is active and distributed; concentrated voting can skew decisions.
Regulatory uncertainty: As with all DeFi, rules could change and affect operations or listings
Quick starter checklist (if you want to try it)
1. Read the docs and explore the UI in demo/test mode.
2. Start with 1 small deposit of an asset you already hold.
3. Try borrowing a stablecoin for a simple trade or hedge4. Use an isolated position for anything experimental.
5. If you like governance, lock a small amount of DOLO to learn how veDOLO works
6. Never borrow more than you can tolerate to be liquidated
Final thought
Dolomite is built for people who want their crypto to do more — earn, secure, and trade — all at once. It’s a feature-rich platform that opens useful options for people with nonstandard tokens, but with that power comes complexity. If you’re curious, dip a toe in and learn the mechanics before scaling up
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