For many years, users of decentralized finance have unknowingly made a silent compromise. The structure of most leading lending protocols forces us to make painful choices: you either use your assets for their native purpose or lend them out for yield. You can't have both.
Think about it. The ETH you stake can earn staking rewards, but if you want to lend it on Aave or Compound, you typically have to use a liquid staking token, which may not have the same governance rights or abstract you from the core protocol. The liquidity provider (LP) tokens you earn from Uniswap are generating trading fees, but you cannot use them as collateral for loans. Each asset must choose its unique function. This is a major compromise of DeFi, locking up trillions of potential value.
My excitement about Dolomite comes from the fact that it is one of the first protocols I have seen designed to end this compromise. Its architecture is designed around a single revolutionary idea: your assets should be able to do all the work at the same time.
This is what they mean by allowing users to retain their 'DeFi native rights.' When you lend assets on Dolomite, the protocol is smart enough to ensure that you don’t lose staking rewards, governance rights, or the underlying yield generated by that asset. It allows you to stack yields and utility in ways that were previously unattainable. That is why it can support such a vast array of unique and complex assets—over 1000, including treasury tokens like GLP or yield-generating tokens rejected by older protocols.
This is not just a feature; in my opinion, it is a glimpse into the next generation of DeFi. The future of this space is not just about finding new sources of yield but about unlocking the maximum capital efficiency from the assets we already have. Older protocols treat assets as employees for a single task. Dolomite treats them as versatile freelancers, able to profit simultaneously from multiple jobs.
The headline feature might be the large number of assets it supports, but for me, the real revolution lies in the philosophical shift. Dolomite is building a more complex and efficient money market, allowing users to finally break free from silent compromises and unleash the full potential of their digital assets.
