狸花猫313

Macroeconomic background: Data determines the transparency of finance.
In the traditional financial system, risk management relies on a vast data network: exchanges, clearinghouses, central banks, and credit agencies collectively maintain real-time data and risk standards.
However, in DeFi, although all transactions are recorded on-chain,
data is scattered across different protocols and chains, making it difficult to unify.
Risk indicators lack standardization, with different protocols adopting different clearing thresholds and margin logic.
Investors and institutions find it difficult to access transparent and comparable financial data layers.
If DeFi is to connect with institutional finance, a transparent, verifiable, and standardized financial data network must be established. Dolomite is taking this step.

Macroeconomic Context: Limitations of Collateralized Finance
Most of the current DeFi is built on the logic of over-collateralization.
Users need to deposit assets worth more than the loan value to obtain a loan;
Protocols prevent defaults through liquidation mechanisms;
This model guarantees security but severely limits capital efficiency.
In traditional finance, the credit system allows businesses and individuals to finance based on reputation and cash flow rather than relying solely on collateral. The global credit market is measured in hundreds of trillions of dollars, far exceeding the mortgage market.
For DeFi to enter a stage of institutionalization, it must transition from 'collateralized finance' to 'credit finance.'

Pain points: Concentration and gaps in the derivatives track
In DeFi, the spot and lending markets are relatively mature, but there is still a huge gap in the derivatives market. dYdX and GMX hold the major share, but each has its limitations: the former has become disconnected from the Ethereum ecosystem after migrating to Cosmos, while the latter is constrained by a limited number of trading assets. For users, there is still a lack of a unified and efficient platform to achieve diversified hedging, risk management, and yield management tools on-chain.
Technology: Margin architecture and compatibility with derivatives
Dolomite's unified margin system provides a natural technical foundation for the derivatives market. Users can manage spot, lending, and derivatives positions under the same account, avoiding issues of capital dispersion and repeated collateralization. At the same time, Dolomite's modular design leaves interfaces for introducing complex derivatives such as perpetual contracts and options, giving it the capability for rapid expansion.

Pain Point: Constraints of Mainnet Performance and High Costs
The high Gas fees and limited throughput of the Ethereum mainnet have long restricted the development of DeFi. For protocols involving high-frequency trading, leveraged liquidation, and cross-asset operations, the mainnet environment not only has excessively high transaction costs but also suffers from execution delays. This deters many potential users and institutions from on-chain trading and makes it difficult for DEX to compete with CEX in terms of speed and experience.
Technology: Deep Integration of Layer2 and Dolomite
Dolomite fully utilizes the scalability of Layer2 in its architecture. By being deployed on high-performance networks like Arbitrum, Dolomite significantly reduces transaction confirmation delays and lowers the cost of user operations. At the same time, Dolomite's modular design allows it to quickly migrate or expand to other Layer2 solutions, such as Optimism and Base, thereby achieving multi-chain parallel development. This flexibility is an important foundation for its long-term competitiveness.

Pain Point: Fragmentation of Stablecoins and Insufficient Use Cases
Stablecoins are the foundation of DeFi, but currently there are many types of stablecoins in the market - USDT, USDC, DAI, FDUSD, etc., each operating independently. When users switch between different protocols and chains, they not only bear the cross-chain costs but also face issues of fragmented stablecoin liquidity and single application scenarios. For users looking to engage in leverage, lending, or investment combinations, the lack of a unified stablecoin management environment is a significant pain point.
Technology: Unified Margin and Multi-Stablecoin Integration
Dolomite's account architecture is naturally suited for stablecoin integration. Users can deposit different stablecoins into a margin account simultaneously, and the system will handle the calculation of collateral ratio and health uniformly. Thus, whether holding USDC or DAI, users can participate in lending and leverage trading in the same manner. Additionally, Dolomite's modular design allows for the introduction of new stablecoins, maintaining the ecosystem's openness and flexibility.

Macroeconomic background: The clearing gap in multi-chain finance
In the traditional financial system, clearing between different markets is handled by central clearing parties (CCP) and clearing networks (such as DTCC, Euroclear), ensuring that assets can be settled smoothly across markets.
However, in the blockchain world, multi-chain finance is facing the clearing island problem:
Each chain has its own independent clearing and margin system;
Cross-chain assets often rely on bridges but lack clearing and risk alignment mechanisms;
Transactions occur across multiple chains, but clearing can only be completed on a single chain, leading to fragmentation of funds and efficiency loss.
To institutionalize multi-chain DeFi, there must be a cross-chain clearing interoperability layer. Dolomite's development direction is precisely to solve this core problem.

Macroeconomic background: liquidity is the blood of the market
In any financial market, liquidity is key to determining market depth and efficiency.
In traditional markets, market makers rely on low-cost financing and leverage to maintain stable buy-sell quotes.
In DeFi, market making often relies on AMM pools or active market-making strategies, but lacks a unified financing system.
This has led to a structural contradiction:
Market makers need more liquidity but lack capital leverage;
Funds are idle in investors' hands, yet cannot efficiently enter the market-making cycle directly.
Dolomite's narrative is precisely to fill this gap, creating an integrated liquidity engine of 'market making + financing'.

Macroeconomic context: settlement speed determines financial efficiency
In traditional finance, there is a time lag between trading and settlement:
Stock trading usually settles T+2, meaning funds and assets are credited two days after the transaction is completed;
The derivatives market, while faster, still faces time delays and counterparty risk;
Settlement delays mean risk accumulation and capital accumulation.
DeFi originally promised "instant settlement", but the reality is not ideal:
Most protocols rely on batch clearing or delayed execution;
There are delays of minutes or even hours in cross-chain transfers and fund calls;

Macro context: The composability of financial innovation
In traditional financial markets, innovation is often highly restricted: interfaces between different institutions are incompatible, and the design of financial products is constrained by regulations and IT systems.
In DeFi, composability is known as the essence of 'money lego'. Users and developers can combine the functions of different protocols like assembling Legos to create new financial products.
However, in reality, composability faces bottlenecks:
The collateral and margin systems of various protocols are incompatible;
Risk management and clearing logic are difficult to collaborate across protocols;

Macroeconomic context: Clearing and settlement are the core of the financial system
In traditional finance, clearing houses are one of the most important institutional infrastructures. Whether it is futures, options, or stock trading, clearing houses act as central counterparties, ensuring that every transaction can be settled and avoiding systemic risks caused by counterparty defaults.
In DeFi, although there are AMM, lending, and derivatives protocols, clearing and settlement remain highly decentralized, lacking a unified hub:
Each protocol builds its own clearing system, standards vary, and efficiency is low;
Risk cannot be managed centrally, and bad debts are prone to accumulate in a single agreement;

Macroeconomic context: structural dilemma of liquidity fragmentation.
In the DeFi ecosystem, liquidity is the most scarce resource, yet it has long been fragmented:
There are numerous barriers between different protocols: lending, perpetual contracts, options, and RWA each fight their own battles, and funds cannot flow freely.
Cross-chain bridging is highly risky: asset migration between different chains poses security and efficiency issues.
Repeated collateralization leads to waste: users must collateralize on multiple platforms separately, resulting in extremely low capital utilization.
This fragmentation causes the entire DeFi market to present a 'funding island' phenomenon, weakening market efficiency and limiting the entry of institutional funds. Dolomite's narrative is shaped here as the organizer of the liquidity alliance.

Macro background: Complex finance and human limits
In traditional financial markets, risk management relies on large teams, complex quantitative models, and expensive computational infrastructure. As market size expands and derivatives become more complex, manual risk control gradually fails to meet the requirements for real-time and accuracy.
DeFi faces the same challenges:
Multi-asset parallel: Hundreds of token collateral pools operate simultaneously;
Cross-chain volatility transmission: A severe fluctuation on one chain may instantly affect the entire DeFi ecosystem;
Liquidation windows are extremely narrow: In extreme market conditions, millisecond-level decisions determine the survival of protocols.

Macroeconomic Background: The binary contradiction of privacy and compliance
In the global financial system, there has long been tension between privacy and compliance:
Traditional Finance: Under strict regulation, user privacy is sacrificed to meet anti-money laundering and KYC requirements.
Decentralized Finance: On-chain transparency brings extreme auditability, but users' transactions and positions are almost completely exposed.
This binary opposition creates a dual dilemma:
Institutional funds cannot enter the market - lack of compliance transparency makes it difficult to meet regulatory requirements.
Individual user privacy is compromised - on-chain transparency leads to strategy and position leakage, increasing gaming risk.

Macroeconomic Context: The Monopoly and Fractures of Financial Data
The global financial market is a massive system driven by data. Asset pricing, risk management, clearing and settlement, and even government regulation all rely on real-time, accurate market data. Traditionally, this field has long been monopolized by a few giants, such as Bloomberg and Refinitiv, with a combined annual revenue exceeding 50 billion dollars. They rely on closed systems and subscription fees to build moats, but this also brings high costs, access barriers, and a lack of transparency.
The rise of DeFi reveals another path: an open, permissionless financial system. But the question that arises is — how to securely bring real-world financial data on-chain? Traditional oracles rely on intermediaries, which come with delays, costs, and trust issues. The emergence of Pyth Network is precisely to solve this core challenge.

Macroeconomic background: systemic threat of extreme conditions
In financial markets, crises are often not triggered by daily fluctuations, but by a chain reaction triggered by extreme conditions (black swan events).
In the history of DeFi, such crises are not uncommon:
March 12, 2020 crash: widespread liquidation failures in lending protocols resulted in a surge of bad debts;
2022 LUNA collapse: On-chain liquidation mechanism failure led to a liquidity collapse of the entire ecosystem;
2023 multiple stablecoin de-pegging: caused many leveraged positions to instantaneously lose control of risk.
These events indicate that for DeFi to move towards institutionalization, it must establish mechanisms similar to traditional finance's 'central clearinghouse + risk buffer fund'. Dolomite is trying to bring this logic on-chain.

Macroeconomic Background: The Absence of Financial Inclusion in DeFi
In traditional finance, the goal of inclusive finance is to allow more small and medium enterprises, individuals, and long-tail assets to enter the financial system. However, in DeFi, the vast majority of protocols only focus on mainstream assets (ETH, BTC, stablecoins), neglecting the financial needs of long-tail assets.
Lack of Financing Channels for Small and Medium Projects: Their tokens cannot be used as collateral, and liquidity is restricted.
High Entry Barriers for Long-Tail Users: Users without sufficient asset scale find it difficult to obtain leverage or financing services.
Narrow Range of Asset Types: In reality, a large number of assets cannot be brought onto on-chain financing.

Macroeconomic background: Derivatives are the core of the financial market
In the traditional financial system, the derivatives market is far larger than the spot market. Futures, options, swaps, and other tools are not only means of hedging risks but also key to enhancing capital efficiency.
The derivatives market of DeFi has grown rapidly, but still faces three major bottlenecks:
Insufficient capital efficiency — The financing and margin system is not perfect, limiting leverage expansion;
Immature risk management — The design of clearing and margin is relatively rough, making it easy to fail in extreme market conditions;
Insufficient product innovation — Most protocols remain at perpetual contracts, lacking a diverse ecosystem of derivatives such as options and swaps.

Macroeconomic Background: The Bottleneck of DeFi Governance
The early prosperity of DeFi has brought a large number of DAOs, but most governance models have serious flaws:
Voting Apathy: The vast majority of token holders lack motivation to participate, and governance power is highly concentrated;
Short-termism: Voting is often driven by emotions and price fluctuations, lacking long-term strategic planning;
Lack of Institutional Mechanisms: Traditional financial institutions are accustomed to mature mechanisms such as boards, shareholder meetings, and audit committees, while DeFi governance mostly remains at the level of on-chain voting, lacking institutional support.
If DeFi is to connect with TradFi, it must undergo an institutional evolution in governance. Dolomite provides a path worth paying attention to.