For many years, users of decentralized finance have silently compromised without realizing it. 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 to earn yields. 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 that may not have the same governance rights or abstracts 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 significant compromise in DeFi, locking away trillions of potential value.
My excitement about Dolomite stems from it being one of the first protocols I have seen aimed at ending this compromise. Its architecture is designed around a single revolutionary idea: your assets should be able to do all the work simultaneously.
This is what they mean when they say users retain their "DeFi native rights." When you lend assets on Dolomite, the protocol is smart enough to ensure you do not lose staking rewards, governance rights, or the underlying yields generated by that asset. It allows you to stack yields and utility in ways that were previously unattainable. This is why it can support such a vast array of unique and complex assets—over 1000, including treasury tokens from yield generation like GLP or those rejected by old protocols.
This is not just a feature; to me, 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 maximum capital efficiency from the assets we already have. Old protocols view assets as single-task employees. Dolomite sees them as versatile freelancers capable of profiting from multiple jobs simultaneously.
The headline feature may be the vast number of assets it supports, but to me, the real revolution lies in the philosophical shift. Dolomite is building a more complex and efficient money market, finally allowing users to escape the silent compromise and unleash the full potential of their digital assets.
