Among the many DeFi protocols centered around "lending + leverage," @Dolomite has a unique positioning: it is not a simple replication of the liquidity pool model of Aave/Compound, but rather based on a "composite margin account" that integrates spot, lending, LP shares, and even options positions under the same collateral and liquidation engine. This design is inspired by the Prime Brokerage thinking found in derivatives exchanges: users can layer various positions in a unified account, with risk dynamically assessed by a real-time asset weight matrix rather than being calculated in isolation based on a single collateral limit. Thanks to EVM atomic transactions, when the account's health factor falls below the threshold, liquidators can close multiple market paths in a single transaction, significantly reducing slippage losses caused by "forced liquidation - rebuilding positions," and allowing the protocol to maintain a more stable bad debt ratio in high volatility scenarios. In the most recent market shock test (Arbitrum circuit breaker incident), the system processed over 2,600 liquidations within 40 minutes, with zero bad debts, demonstrating that its risk engine has withstood validation under extreme market conditions.
What truly sets #Dolomite apart is the ability of 'collateral assets as income-generating assets.' Traditional lending protocols require users to break down income-generating assets (such as GLP, PT-GLP, Pendle YT, etc.) into pure collateral, forcing the income rights to be transferred to the pool; whereas this protocol allows these assets to be directly deposited into the margin account after being wrapped as ERC-20, with the income allocated to users in real-time according to their holding proportion. This move addresses two pain points: first, it enhances users' capital efficiency—one GLP can earn market-making returns while also serving as leverage collateral; second, it increases liquidity depth—income assets do not have to exit the secondary market due to 'collateralization,' thereby reducing price discounts. With the 'pluggable adapter' framework, any income asset that meets the token standard can be quickly integrated into the risk control matrix. The current mainnet adapters cover GMX v2, Tracer Perps, and multiple Pendle markets, with future plans to support Lyra options and RWA notes.
In terms of the economic model, the value capture path of $DOLO is designed to be quite multifaceted: first, there is a fee buyback, and only 30 $DOLO of the spot matching and leveraged interest can bid for account assets, establishing an economic game of 'shorting protocol security equals shorting one's own collateral'; second, there is governance stratification, where ordinary token holders can vote on parameter adjustments, while those wishing to submit new asset adaptation proposals need to lock up ve-DOLO to bind long-term interests. It is noteworthy that the insurance fund is not only released in extreme cases but can also provide initial liquidity for new assets through Snapshot resolutions, forming a 'yield—buyback—credit enhancement—expansion' flywheel.
From a security perspective, the protocol introduces a 'dual-layer quoted oracle' and a 'time-weighted circuit breaker' mechanism at the contract level: if the price of an asset deviates from the multi-source oracle average by more than a set threshold within a 5-minute window, the system will temporarily increase the collateral discount for that asset and limit new leverage to prevent price manipulation attacks. At the same time, governance includes a 'reduction-only mode' switch, which can be triggered on-chain by any trusted security committee member, ensuring that when market conditions distort, users can only reduce their risk exposure and cannot open new positions, fundamentally cutting off the 'malicious pricing—excessive lending—chain liquidation' contagion chain.
Looking to the future, the growth curve of @Dolomite depends on three key indicators: the average reuse multiple of account synthetic assets, the TVL proportion of income-generating collateral, and the coverage multiple of liquidators staking $DOLO. If these three curves remain stable and upward while the bad debt ratio continues to stay low, @Dolomite is expected to become the native gas of the 'efficient leverage layer' and may also play the role of risk co-insurer and liquidity coordinator in a broader DeFi landscape.
