What is the old problem of DeFi? Capital utilization is too low. In most protocols, when you collateralize assets, they just sit in a vault as collateral; safety is safety, but efficiency is wasted. Dolomite's logic can be summed up in one sentence: collateral cannot be idle; it must work.
Its virtual liquidity model allows collateralized assets to 'clone' themselves to continue participating in the market. For example, while you collateralize ETH to borrow funds, the virtual version of this ETH can participate in liquidity pools and even engage in derivative activities. This means that capital is no longer singular but operates in a multi-threaded manner. For users seeking to maximize returns, this is a killer feature.
Of course, high efficiency must be paired with stable risk. Dolomite has implemented modular isolation in its architecture, handling lending, trading, and liquidity separately. If one module encounters an issue, it won't drag down the entire system. This is the key concern for institutions and large funds: clear safety boundaries and non-contagious risks. Compared to those 'high-yield, luck-based' protocols, Dolomite's stability is more appealing to long-term capital.
In the long run, Dolomite positions itself as the infrastructure of the capital market, rather than a stage for a single gameplay. When the bull market arrives, users need more than just speculative tools; they need a hub that can continuously enhance capital efficiency. Dolomite is precisely at this demand point, and its core competitiveness lies in capital efficiency + risk management.