In the DeFi ecosystem, names like Aave and Compound have long become symbols of the lending & borrowing sector. These protocols lay the foundation for the decentralized borrowing market, providing liquidity, transparency, and basic profitability for users.

However, if Aave and Compound are seen as the pillars of the first generation, then the emergence of @Dolomite is opening up a new development phase – where borrowing is not just limited to basic mechanisms, but also becomes a sophisticated financial tool for advanced strategies.

1. Aave & Compound – The standard model but 'static'

Both Aave and Compound operate under a traditional money market model: users deposit assets to earn interest, or borrow assets based on collateral. This mechanism is safe, transparent, and accessible, but has its limits:

  • Collateral is often locked and inflexible.

  • Capital optimization capabilities are limited, mainly serving simple borrowing needs.

  • Hasn't created much space for complex strategies like arbitrage, structured products, or multi-asset cross-margin.

In other words, they are suitable foundational tools for the general public, but not sufficient for professional investors looking to maximize capital.

2. Dolomite – When borrowing becomes 'advanced infrastructure'

The difference of #Dolomite lies in the redefinition of the borrowing mechanism. Instead of just providing basic loans, Dolomite offers:

  • Cross-margin & isolated margin: Allows users to implement complex strategies across multiple assets, optimizing capital while controlling risk.

  • Flexible collateral: Users can utilize various types of tokens as collateral, including derivatives and LP tokens.

  • DeFi composability: Dolomite becomes a hub for building hedging strategies, arbitrage, or structured financial products.

  • ZAP aggregation: Simplifies multi-step trading processes into a single action, saving time and gas fees.

These features make Dolomite not just an ordinary 'money market', but a comprehensive financial leverage toolkit serving professional traders and DAOs.

3. The significance of 'Advanced Borrowing'

If Aave and Compound represent the primordial stage of lending in DeFi, then Dolomite is proving that borrowing can evolve to become an essential infrastructure component of on-chain finance.

  • With Aave/Compound, most users focus on passive yield farming.

  • With Dolomite, significant borrowing volumes indicate that the protocol is being used to implement sophisticated strategies – from risk hedging to large-scale arbitrage.

Conclusion

Dolomite does not replace Aave or Compound, but plays the role of the next step: transforming lending from a basic tool into an advanced financial platform, where 'advanced borrowing' becomes a hallmark of maturity across the entire DeFi market. $DOLO