In the world of decentralized finance (DeFi), the Total Value Locked (TVL) index is often used as an important measure to assess the scale and strength of a protocol. However, this figure only reflects the surface. To truly understand the depth and level of maturity of a platform, one must observe the quality of lending and borrowing activities within it.

Why is lending and borrowing important?

A protocol with a large circulating debt volume is not merely a place to deposit assets for passive income. It indicates that the platform is being used by investors and institutions with complex financial needs, who require effective and reliable leverage tools to implement strategies.

Unlike the general user group who only cares about high APY interest rates, the group of professional traders and DAOs uses the borrowing function to:

  • Risk hedging: Protecting the portfolio against market volatility.

  • Arbitrage: Taking advantage of price differences between exchanges and assets.

  • Structured products: Combining multiple financial layers to optimize returns according to acceptable risk levels.

These activities demand optimal capital management capability, abundant liquidity, and sustainable infrastructure — something that only truly mature protocols can provide.

Dolomite – From lending platform to core financial infrastructure

The existence of a healthy lending market on @Dolomite is clear proof that the protocol has transcended the realm of a mere 'profit farming' platform. Dolomite has become and is becoming an essential infrastructure piece for institutional investors, DAO funds, and professional players in the DeFi space.

With the support of enhanced leverage, flexibility in collateral, and a robust risk management mechanism, #Dolomite not only attracts passive capital flows but also asserts its position as a high-level financial tool for sophisticated investment strategies.

Conclusion

If TVL shows us the 'scale' of a protocol, then borrowing activity reflects its 'depth' and level of maturity. Dolomite, thanks to possessing a robust lending market, has entered a new phase: becoming a reliable and sustainable on-chain financial system, serving the most advanced players in the decentralized economy. $DOLO