Architecture overview
Dolomite ($DOLO ) is designed as a comprehensive DeFi ecosystem, with a modular, on-chain, audit-ready architecture that allows flexible expansion of features while maintaining safety and transparency.
Dolomite's architecture consists of three main layers:
1. Protocol layer (Protocol Layer)
As the operational core of the platform, it includes smart contracts, staking mechanisms, lending, borrowing, and liquidity pool management.
This layer is responsible for automating all financial processes, from interest calculation, collateral checks, to liquidation when risks exceed thresholds.
2. Token layer & incentive (Token Layer)
The structure of the DOLO token is not only a trading tool but also a means of governance and community incentives.
Includes mechanisms:
Staking: Users lock tokens to receive rewards and participate in governance.
Liquidity incentives: Encourages users to provide liquidity for the pool.
Tokenized debt: Converting off-chain loans into on-chain tokens, making transactions more transparent.
3. Application & UX layer (Application Layer)
User interface, dashboards, and integration APIs.
Allows users to easily track profits, risks, asset positions, while connecting with popular wallets like MetaMask, Ledger, or custodial interfaces.
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Smart Contract – Operational core
Dolomite's smart contracts are built to:
Automating lending & borrowing transactions:
Users deposit assets for lending → smart contracts manage interest rates and rewards.
When borrowing assets → the contract checks the collateral ratio, warns or liquidates if risks exceed levels.
Liquidity pool management:
Smart contracts create and manage liquidity pools, track supply-demand ratios, and distribute transaction fees or yield farming rewards.
Tokenized debt & RWA integration:
Enables off-chain loans to be tokenized into on-chain assets.
Users can trade, stake, or use as collateral in other activities.
Dolomite has audited all smart contracts by reputable security firms, reducing risks from common vulnerabilities like reentrancy, overflow/underflow, or flash loan attacks.
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DOLO token structure
DOLO token is the heart of the Dolomite ecosystem, with multiple functions:
1. Utility token (Utility Token)
Used for staking, participating in governance, and receiving rewards in the system.
Provides an incentive alignment mechanism between the platform and users.
2. Governance token (Governance)
DOLO holders have the right to vote on improvements, protocol updates, or treasury allocations.
Vote weighting mechanism based on the amount of staking tokens, helping to avoid power concentration.
3. Tokenized debt representation
DOLO combines with RWA tokens to create synthetic assets, allowing users to access off-chain loans while still on the blockchain.
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Staking & yield mechanism
Staking in Dolomite is designed to stabilize the ecosystem, reduce volatility, while rewarding long-term participants:
Staking reward: Rewards are distributed based on the amount of staking tokens and lock duration.
Risk mitigation: Token staking helps provide collateral for loans, reducing risk for lenders.
Dynamic yield: Staking yield is adjusted based on total token supply, liquidity pool, and borrowing demand.
The yield compounding system allows users to automatically reinvest rewards, optimizing profits over time.
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On-chain risk management
Dolomite integrates a comprehensive risk management mechanism, including:
1. Collateral ratio & liquidation
Smart contracts track the collateral ratio of borrowers.
When risks exceed thresholds, smart contracts automatically liquidate assets, ensuring safety for lenders.
2. Oracle integration
Price data from reputable oracles ensures market prices are transparent and not manipulated.
3. Audit & monitoring
Contracts are audited periodically, along with a dashboard tracking health factor, exposure, and liquidity pool.
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Infrastructure & scalability
Dolomite is designed for easy scaling:
Module-based architecture: Allows new lending pools, staking pools, or RWA integration without affecting the core system.
Cross-chain potential: Can integrate with Ethereum, BNB Chain, or other L2 solutions to expand interoperability.
API & SDK: Allows third-party projects or investment funds to integrate directly with Dolomite.
