Simply introducing the project will be drowned in the flood of information, but what truly sparks discussion is a unique perspective, deep insights, and genuine emotional resonance.
This time, we won't talk about cold technology or pile up fancy words. It's like sitting down with everyone in a podcast show to share some of my recent observations and insights on Dolomite.
Podcast time: Why does Dolomite give me, an old investor, an 'aha' feeling?
Hey, friends. I am your old friend, XXX (you can set your own KOL name). Recently, I've been researching a project called Dolomite. To be honest, when I first heard this name, I didn't feel much, as lending protocols in DeFi have become a red ocean. Aave, Compound, MakerDAO... these giants already occupy a large part of the market share. But after delving deeper, I found that Dolomite brought me a long-lost **'aha'** feeling.
It is not the kind of project that boldly claims to overturn everything and become the best in the universe; it is more like a “craftsman” quietly working in the corner, but what it carves out has a refinement and uniqueness that other giants lack.
Exclusive perspective one: Where is Dolomite's moat from talking about “long-tail assets”?
Did you know there is an interesting phenomenon in the DeFi world: the liquidity of leading assets is extremely good, but long-tail assets, which are those with small market caps and emerging tokens, often fall into liquidity dilemmas. It's like a giant pyramid, with BTC and ETH at the pinnacle while the base consists of thousands of long-tail tokens.
Traditional lending protocols often only support those mainstream assets at the top of the pyramid for risk control. This is easy to understand because mainstream assets have high liquidity, relatively low volatility, and low liquidation risks. However, this also means that if you hold some new and potentially valuable tokens, such as governance tokens from an emerging GameFi project or tokens from a niche AI project, you can hardly activate these assets through lending. They are like antiques locked in a safe: valuable but unable to generate cash flow.
Dolomite aims to break this deadlock.
When I saw that line in its introduction **“a lending platform supporting over 1,000 unique assets,” I felt a jolt. This is not just a number; it represents a new philosophy of risk management**. On Dolomite, you can collateralize all sorts of “non-mainstream” assets you hold to borrow the funds you need.
What is this like? It's like Aave and Compound are banks, only accepting quality collateral like real estate and stocks; whereas Dolomite is more like a pawn shop, willing to accept antiques, calligraphy, and even limited edition sneakers, as long as they have value, they can be liquidated.
Why is this important?
Because in the DeFi world, the liquidity of assets is their vitality. If a token cannot be borrowed, lent, or collateralized, its value is hard to fully realize. Dolomite's approach is essentially creating new liquidity pools for the entire Web3 ecosystem, allowing long-tail assets that have been “abandoned” by mainstream protocols to participate in the DeFi Lego brick game.
This reminds me of the **“long tail theory.” In the traditional internet domain, Amazon and Netflix have accumulated a vast user base and competitive advantage through a plethora of long-tail products/content. In DeFi, is Dolomite following the same path? By supporting a multitude of long-tail assets, can it establish a unique and hard-to-replicate moat**? This is definitely worth exploring further.
Exclusive perspective two: How to find a balance between risk control and innovation?
Supporting over 1,000 assets sounds cool, but the accompanying question is: how is risk control managed?
This is the question I care about the most when researching Dolomite. After all, the risks of long-tail assets are evident: poor liquidity, high volatility, and even potential risks of “rug pull.”
Dolomite's solution can be described as a **“decentralized trust network.” It does not adopt a centralized whitelist model, but manages risks through a series of unique mechanisms**.
Tiered interest rate model: Dolomite sets different interest rates based on the risk level of assets. The borrowing rate for high-risk assets will be higher, which compensates for the risk and also serves as a warning to borrowers.
Liquidation mechanism: Dolomite's liquidation mechanism is designed very ingeniously; it uses oracles and liquidation bots to monitor collateral value in real time. Once the collateralization rate reaches the liquidation threshold, liquidation will be automatically performed. It also introduces a **“batch liquidation”** mechanism to ensure that even when facing small market cap assets, liquidation can be completed quickly to avoid bad debt.
Community governance: The community plays an important role in Dolomite. The listing of new assets requires community voting. This effectively decentralizes the “risk control” power to the community, allowing those who know the project best to decide whether to introduce it into the protocol.
This has shown me another possibility in the Web3 world: risk control is no longer the exclusive ability of centralized institutions, but can be maintained collectively by the community through decentralized mechanisms, forming a “trust” network.
Exclusive perspective three: Dolomite's “native rights”: not just lending, but also ecological empowerment.
In Dolomite's introduction, there is another keyword that interests me greatly: “you will not lose your DeFi native rights.”
What does this mean again?
In traditional lending protocols, when you collateralize assets, they usually become a non-interest-bearing “dead” asset. For example, if you collateralize ETH, although you can borrow USDC, your ETH can no longer be staked or used for LP mining, losing its ability to **“earn interest”** in other DeFi protocols.
Dolomite's design cleverly solves this problem. It supports **LP Token (liquidity provider tokens), Staking Token (staking tokens)** as collateral.
What does this mean?
This means you can collateralize your LP Token (for example, ETH-USDC LP) placed on Uniswap to borrow funds, while your LP Token continues to generate fee income. You can also collateralize your stETH staked in Lido to borrow funds, while your stETH continues to generate staking rewards.
This is simply killing two birds with one stone! It perfectly combines lending and yield, allowing your assets to generate passive income even while collateralized.
It’s like you mortgage your house to the bank but can still make money by running a homestay in it. This is a **“liquidity liberation.” It raises the capital utilization efficiency of DeFi to a new height and attracts those DeFi “veterans” who pursue extreme capital efficiency**.
Reflections from KOL and thoughts for the future: Will Dolomite be the next “DeFi giant”?
Having discussed this, I believe everyone now has a deeper understanding of Dolomite. It is not a simple lending protocol; it is a DeFi innovation platform that addresses the liquidity of long-tail assets, explores decentralized risk control, and enhances capital utilization efficiency.
So, will it become the next “DeFi giant”?
I personally believe that Dolomite still has a long way to go. Its challenges mainly come from:
Risks of long-tail assets: Despite having risk control mechanisms, the liquidation risk of long-tail assets still exists; once the market encounters extreme conditions, it may face bad debt risks.
User education: Dolomite's mechanism is relatively complex and requires deep education for users to understand its value and risks.
Market competition: Giants like Aave and Compound are still strong, and Dolomite needs to continuously strengthen user experience, community building, and ecological cooperation to gain market share.
At the same time, I am also filled with anticipation. Because in my view, Dolomite represents a new direction in DeFi development: from “mainstream” to “long tail,” from “single function” to “composite returns.”
The future of DeFi will definitely not only feature a few giants, but will see more projects like Dolomite that delve into niche areas and address specific pain points. They will collectively build a larger, more diverse, and vibrant DeFi ecosystem.
Okay, that's it for today's podcast episode. **I wonder what everyone thinks?** Do you also find Dolomite's “long tail asset” strategy interesting? Or do you think there are potential risks in its risk control?
