Dolomite is a comprehensive DeFi platform functioning as a money market with lending facilities and maintaining a strong focus on capital efficiency. It operates across several chains, recently expanding to Ethereum, and a major advantage of using Dolomite is that it provides a range of pre-built strategies allowing users to optimize yield with minimal friction. These products make use of looping and operate using a variety of assets, including BTC and several different stablecoins.
There are so many possible strategies and platforms to make use of in DeFi, across multiple chains and protocols, that it makes sense to look for places where the hard work is done for you, and in that case Dolomite is an ideal destination.
Dolomite has a range of functions to explore the details of and you can get some high yields by depositing assets into its pre-built strategies, while also, it’s a tried-and-tested protocol that has earned a solid reputation.
So, let’s take a look at some of the strategies it has on offer and how to get started with them.
What Is Dolomite?
In case you’re not already aware of it, Dolomite is a DeFi money market protocol with borrowing and lending functions. It started out on Arbitrum, then also incorporated Mantle and Berachain, and as it takes a multichain approach it recently expanded across also to Bitcoin Layer-2 Botanix, and to Ethereum, the chain it describes (accurately) as “the bedrock of decentralized finance”.
Dolomite places a strong emphasis on capital efficiency and “reusing liquidity”, meaning it finds ways to use capital in multiple ways at once in order to earn maximum yield. The protocol has a current TVL of $145 million, recently launched support for World Liberty’s USD1 stablecoin on Ethereum, and has processed over $1 billion of cumulative volume.
Dolomite has launched its own native token, DOLO, and it currently has a market cap of around $14 million, while there are two further tokens within the ecosystem: veDOLO, which is a governance token, and oDOLO, which is a rewards token for liquidity providers and can be changed into veDOLO.
Before we look at strategies, be aware of the risks when using Dolomite and other DeFi platforms, which include smart contract vulnerabilities, stablecoin de-pegs, and frontend attacks. Also, please take a look at the Dolomite official documents for an in-depth technical explainer of the protocol and how it works.
How to Use Dolomite Strategies
First of all, you need to open up the app and connect your wallet, and you can choose which network to connect with at the top right of the screen too, depending on what kind of strategies you’ll be using.
For a straightforward start you can then click on the Strategies tab, leading to a selection of pre-built strategies using various different assets. These give immediate access to expertly configured positions designed to maximize yield, and you’ll find some high APRs here so let’s look at a couple of interesting options.
Looped GLV-BTC
This generates yield from bitcoin, and it operates on Arbitrum. It makes use of GLV-BTC from the GMX protocol, which you can get hold of on GMX. This itself is the token of a vault supplying liquidity across various markets and generating yield from trading and swap fees.
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