Many people are attracted to Dolomite (the lending protocol on Berachain) for its 18% stablecoin annual yield when they first hear about it. However, I believe that if we only focus on short-term gains, we may underestimate its true potential.

The value of Dolomite is not just about 'saving money for high interest', but rather its role as a key financial infrastructure within the entire Berachain ecosystem. Today, I will discuss its long-term value logic.@Dolomite

1️⃣ The Core Position of the Lending Market $DOLO

In any blockchain ecosystem, lending protocols are almost always the most basic financial modules.

  • Ethereum has Aave and Compound;

  • BNB Chain has Venus;

  • Solana has Solend.

These platforms are not just about lending and borrowing; they are the 'funding hub' of the entire ecosystem, indispensable to project parties, investors, and ordinary users.

Dolomite's positioning in Berachain is similar. It not only provides a lending market for BYUSD but also enables more efficient capital flow within the entire ecosystem.

2️⃣ The strategic significance of BYUSD

The core asset of Dolomite is BYUSD, which is the stablecoin of Berachain. Whether a stablecoin can stand firm depends on whether there are enough application scenarios.

  • At Dolomite, BYUSD is not just a stable lending and borrowing tool, but it can also stack rewards;

  • High yields have created strong demand for BYUSD, pushing it to become the most active stablecoin on Berachain;

  • As more people use BYUSD, the stability and stickiness of the ecosystem will be stronger.

In other words, the success of Dolomite is actually helping BYUSD build a financial moat.

3️⃣ Token logic and incentive design

In addition to the basic interest rate, Dolomite has also designed dual incentives:

  • BYUSD rewards: Binding ecological growth;

  • oDOLO rewards: Platform governance and long-term value anchoring.

This design provides users with immediate returns while binding long-term value with tokens. As the ecosystem matures, the governance role of oDOLO will become increasingly important and may become an indispensable governance force on Berachain.

4️⃣ Ecosystem expansion and synergy effects

The long-term value of a lending protocol also lies in its synergy with other modules.

  • Collaborating with DEX: Users depositing BYUSD may also participate in trading and liquidity;

  • Collaborating with stablecoins: The growing demand for BYUSD will drive more projects to choose it as a settlement unit;

  • Collaborating with Berachain: As the core lending market, Dolomite helps attract more developers and capital into the ecosystem.

I believe Dolomite is not just a platform, but the 'funding heart' of Berachain's financial ecosystem.

5️⃣ User growth potential

From a long-term perspective, I am optimistic about several logics for the growth of Dolomite's user base:

  • High yields attract early users to enter;

  • Simple and intuitive operations lower the threshold, allowing newcomers to get started;

  • As the ecosystem matures, funding will be more inclined to stay within Berachain, and Dolomite is the most direct storage entry.

This reminds me of Aave back in the day, from initially attracting users with high interest rates to gradually becoming the hub of Ethereum's financial ecosystem. Dolomite may follow a similar path.

6️⃣ Potential risks and challenges

Of course, long-term value also needs to consider challenges:

  • Sustainability of returns: The current 18% is very attractive, but after future rewards decrease, can it still retain users?

  • Liquidation risk: While circular borrowing can amplify returns, it can also bring leverage risks.

  • Ecosystem competition: If multiple lending protocols emerge in Berachain in the future, can Dolomite maintain its advantage?

In my opinion, Dolomite's advantage lies in its proactive position, occupying the core position of BYUSD, but it must also continuously iterate to consolidate its lead.

7️⃣ Summary

In the short term, the highlight of Dolomite is the 18% annualized BYUSD, which has caught many people's attention.

But in the long run, its value is far beyond that.

  • It is the funding hub of Berachain;

  • It is a key application scenario for BYUSD;

  • It could become a long-term pillar of the ecosystem's financial infrastructure.

If we consider Berachain as a new city under construction, then Dolomite is the 'banking system' of this city.

The value of the banking system has never been in short-term interest rates, but in long-term capital flow and ecological stickiness.

Therefore, I believe Dolomite deserves to be seen as a long-term value investment target, not just a 'high-interest deposit platform'.#Dolomite