Rewards in the @Dolomite ecosystem are carefully structured to encourage liquidity provision, governance participation, and long-term alignment with the protocol’s success. Instead of offering simple short-term payouts, Dolomite uses its tri-token economy—$DOLO , oDOLO, and veDOLO—to create a self-sustaining reward cycle.
oDOLO: The Liquidity Incentive
At the base level, Dolomite distributes oDOLO tokens weekly to liquidity providers and active users. These rewards are not meant to be sold immediately, but rather to push users deeper into the ecosystem. oDOLO works as an incentive token that gains full utility when paired with DOLO, ensuring that rewards tie back into the platform’s main token economy.
Converting Rewards Into Governance (oDOLO → DOLO → veDOLO)
The real value comes when users pair oDOLO with DOLO. This combination can be locked to mint veDOLO, Dolomite’s governance and revenue-sharing token. The longer the lock period (up to 2 years), the more governance power and protocol fee revenue a user receives. This mechanism incentivizes users to think long-term, rather than chasing immediate gains.
Protocol Revenue Sharing
Holders of veDOLO earn a portion of fees generated by Dolomite’s trading, lending, and borrowing activity. This turns active users into stakeholders, giving them a financial reason to care about Dolomite’s long-term health and adoption. The more the protocol grows, the more valuable these rewards become.
Sustainability Through Penalties and Buybacks
Dolomite also implements an early unlock penalty. If a user exits their veDOLO lock before the agreed term, a fee is applied. This fee is partially used to buy back and burn oDOLO, maintaining its scarcity and supporting the reward cycle. This ensures that even impatient exits contribute to long-term sustainability.
Airdrops and Community Programs
Beyond ongoing rewards, Dolomite has distributed tokens through initiatives like the Minerals Program and airdrops. These not only rewarded early adopters but also helped bootstrap governance by ensuring that active community members had voting power from the beginning. Future reward campaigns may expand this approach to onboard more users.
Long-Term Incentive Alignment
The tri-token model ensures that every reward serves a purpose:
oDOLO attracts liquidity.
DOLO ties rewards into the core economy.
veDOLO transforms rewards into governance rights and revenue-sharing opportunities.
This creates a circular reward system where liquidity provision feeds governance, governance drives sustainability, and sustainability enhances rewards for committed participants.
In essence, Dolomite’s reward system is not just about giving tokens—it’s about building a loyal, invested community that grows alongside the protocol.
