Dolomite is a decentralized currency market and exchange built on a modular architecture, aimed at addressing the core pain points of low capital efficiency and single asset utility in traditional DeFi through its innovative virtual liquidity system and dynamic collateral mechanism. Its native token DOLO adopts a three-layer economic model, deeply integrating governance, incentives, and cross-chain functionality, becoming the core engine driving ecological development. Currently, Dolomite occupies 90% of the lending market share in the Berachain ecosystem, with a TVL exceeding $3 billion, making it one of the most important infrastructure protocols in that ecosystem.
🔍 One, core vision and value proposition: Beyond traditional lending financial infrastructure
Dolomite's vision is to become a unified credit layer connecting the multi-chain world, not just another lending protocol. Its core value lies in enabling users' assets to break the 'single-use' limitation in traditional DeFi, achieving 'one fish, multiple eats.'
Maximize capital efficiency: The single asset deposited by users (e.g., stETH) can simultaneously be used to earn staking rewards, be used as collateral for lending, provide liquidity, earn transaction fees, and even participate in governance voting, without the need to transfer assets between multiple protocols or face the risk of repeated liquidation.
Modularity and composability: Dolomite's architecture is divided into an immutable core layer (ensuring security) and an upgradable module layer (realizing functional expansion). This design allows for rapid integration of new assets and DeFi Lego, enabling other protocols and developers to directly utilize its lending, trading, and other foundational modules to build their own products, thus becoming the 'financial infrastructure' of the entire ecosystem.
⚙️ Two, core technology architecture and innovation: Virtual liquidity and isolated risk control
Dolomite's technological innovation is the cornerstone of its high capital efficiency, mainly including the following two points:
Virtual Liquidity System:
This is the core design of Dolomite. Once assets are deposited, they enter an 'internal account', not locked to a single use, but can be simultaneously used for lending, opening positions, earning interest, and participating in governance, truly releasing the multiple value potential of assets.
Isolation Mode and dynamic collateral:
Users can open multiple independent and risk-isolated lending positions under the same wallet. The profit and loss of one position and liquidation will not affect other positions, making it very suitable for executing complex hedging or leverage strategies, especially for users holding highly volatile assets.
E-Mode (Efficient Mode): When the collateral assets are highly correlated with the borrowing assets (such as ETH/beraETH), the system will automatically increase the loan-to-value ratio (LTV) to a maximum of 90%-95%, allowing users to obtain higher leverage and maximize capital efficiency.
💰 Three, token economic model: Three-layer design driving ecological flywheel
Dolomite adopts a sophisticated three-layer token economic model designed to incentivize long-term behavior and achieve sustainable growth.
DOLO
Basic ERC-20 utility and governance token used for paying fees, providing liquidity, and participating in basic governance.
veDOLO
Voting custody governance token, obtained by locking DOLO (up to 2 years). The longer the lock-up, the higher the voting weight and protocol profit-sharing ratio. Exists in NFT form and is transferable.
Long-term alignment, deep governance, share protocol revenue
oDOLO
Incentive tokens, obtained through activities such as providing liquidity. They can be paired with DOLO 1:1 and exchanged for veDOLO at a discount price (up to 50%).
Guide liquidity, incentivize specific behaviors
Token allocation and release:
Total supply: 1 billion.
Community allocation accounts for the majority: 50.75% allocated to the community (including 20% airdrop and 30.75% liquidity incentives), the team accounts for 20%, investors account for 16.2%, and the foundation and others account for the remaining portion.
Unlocking and inflation: Attention should be paid to a significant token unlocking event in November 2025 (the current circulating supply will double), which may have a short-term impact on market supply and demand. A 3% annual inflation rate will be introduced after the fourth year but can be adjusted through DAO governance.
🌐 Four, ecological expansion, cooperation, and market performance
Dolomite's growth cannot be separated from its profound ecological strategy and important partners.
Deep binding with Berachain: Dolomite has expanded its business focus to Berachain, occupying approximately 90% of the lending market TVL share on that chain, making it the absolute core of its ecosystem. Its success is largely attributed to the deep integration with Berachain's POL (Proof of Liquidity) mechanism, allowing users to earn ecological rewards while borrowing, creating a powerful positive cycle.
Important potential collaboration: World Liberty Financial (WLFI): Market rumors suggest that Dolomite has a close relationship with WLFI, which has ties to the Trump family. The USD1 stablecoin it issues may connect to Dolomite's lending system. If the cooperation materializes, it will bring significant mainstream market attention and potential compliant capital access to Dolomite.
Multi-chain deployment: In addition to Berachain, Dolomite is also deployed on multiple chains such as Arbitrum, Mantle, and Polygon zkEVM, and achieves cross-chain interoperability through Chainlink's CCIP protocol, enhancing its liquidity and accessibility.
Market data performance:
TVL: Over $3 billion (of which approximately $2.74 billion is on Berachain).
Trading volume and revenue: Cumulative trading volume exceeds $18 billion, and protocol revenue reaches $2.3 million (April 2025 data), demonstrating its sustainable business model.
Token price: DOLO's price once surged from 0.03 to 0.3, an increase of nearly ten times, reflecting the market's recognition and expectations of its ecological value.
⚠️ Five, potential risks and challenges
Despite the bright prospects, investors and users still need to pay attention to the following risks:
Token unlocking and market fluctuations: A large-scale token unlocking in November 2025 may temporarily increase market selling pressure, leading to price fluctuations.
Technical complexity: The protocol's modular architecture and complex functions, while powerful, also increase the complexity of smart contracts and potential unknown vulnerability risks.
Ecological dependence risks: Currently, TVL is highly concentrated in the Berachain ecosystem, and the development status of that ecosystem will directly impact Dolomite's performance.
Competitive pressure: The DeFi lending space is highly competitive, facing competition from established protocols like Aave and Compound.
💎 Six, summary and outlook
Dolomite has indeed brought a groundbreaking experience in enhancing capital efficiency through its virtual liquidity and modular architecture innovations. Its three-layer token model elegantly balances liquidity, governance, and long-term incentives. The deep binding with Berachain and the potential collaboration with WLFI provides it with significant imaginative space.
Looking ahead, Dolomite's development depends on the following points:
Successfully execute a multi-chain expansion strategy to reduce reliance on a single ecosystem.
Smoothly integrate important assets like USD1 to attract a broader range of users and funds.
Effective operation of DAO governance to ensure the protocol can continue to evolve safely.
If these key points can be achieved, Dolomite has the potential to upgrade from an important ecological protocol to a foundational credit layer supporting the entire DeFi world.
(The above content is for reference only and does not constitute any investment advice.)
