Dolomite Finance Common Questions

Dolomite Finance is a decentralized lending and margin trading protocol built on smart contract infrastructure. Users supply crypto assets to earn interest, and those deposited assets can simultaneously serve as collateral for borrowing other tokens — all without any centralized party holding your funds.

The core mechanic resembles Compound-style money markets, where supply and borrow rates adjust automatically based on how much of each pool is currently in use. What distinguishes Dolomite Finance is its native margin system. Deposits are held inside the Dolomite Margin Protocol, enabling positions to generate yield while also functioning as collateral. Most lending platforms require you to choose one or the other. The Dolomite Finance platform lets you do both simultaneously.

The team behind Dolomite Finance has also developed additional features on top of this foundation: structured strategies, token-specific incentive programs, and multi-network deployment. For a closer look at the project's background, visit the about page.

Connect a compatible Web3 wallet — MetaMask, Coinbase Wallet, and WalletConnect-enabled wallets are all supported. Once connected, head to the Earn tab on the main platform. You will find a list of supported tokens with their current Supply APR shown alongside each one.

Click "Deposit" next to the token you wish to supply. A transaction panel will appear where you enter the desired amount. If this is your first deposit of that particular asset, approve the token allowance first, then confirm the deposit transaction. Gas is paid in the native currency of whichever network you are using.

Your deposited balance appears right away in the Dolomite Balance column. Interest begins accumulating block-by-block from that moment onward. There is no lock-up period — you can withdraw whenever you like, as long as the pool has sufficient liquidity, which is nearly always the case for most assets.

One useful note: the platform can display both APR and APY figures depending on your preferences. Switch between them in Transaction Settings at the top right. APR reflects the raw annual rate; APY compounds it. Neither figure accounts for gas costs, so factor those in when making smaller deposits.

Rates are algorithmic and update every block based on utilization — the proportion of supplied assets that are currently borrowed. Low utilization means inexpensive borrowing and modest supply yields. High utilization drives borrow rates up sharply, which attracts additional depositors until the pool rebalances.

This model follows the interest-rate curve design pioneered by Compound and later adopted widely across DeFi. The Dolomite Finance protocol applies asset-specific curves, so stablecoins, ETH, and long-tail tokens each operate under different rate models calibrated to their typical demand patterns.

Green APR figures on the Earn page reflect pure lending yield — the interest paid by borrowers and distributed proportionally to suppliers. Blue APR figures incorporate external rewards, such as token incentives, stacked on top of the base rate. Hover over a blue rate to see a full breakdown of each component.

The list of supported assets grows over time and varies by network. On Ethereum, the Dolomite Finance platform currently includes ETH, WETH, WBTC, cbBTC, USDC, USDT, LINK, AAVE, CRV, and a range of yield-bearing tokens such as sUSDe, wstETH, srUSD, wsrUSD, stcUSD, mETH, USD1, and SolvBTC. Each asset has different supply and borrow availability based on its collateral factor and risk classification.

Yield-bearing tokens are especially notable. Assets like sUSDe or wstETH already appreciate in value through their underlying protocol. Depositing them into Dolomite Finance adds a second layer — the base yield from staking or savings, plus lending yield from the Dolomite Finance protocol, plus any applicable DOLO incentive rewards.

Assets displaying a dash in the Borrow APR column cannot be borrowed — they are collateral-only. This is typically the case for less liquid or more volatile tokens where enabling borrowing would introduce excessive liquidation risk.

The Dolomite Margin Protocol is the underlying smart contract layer powering all deposits, borrows, and margin positions on Dolomite Finance. Rather than relying on a simple pool-based design, it tracks individual account balances with precise on-chain accounting.

Every asset held inside the protocol earns interest automatically. This is the key architectural distinction: in a conventional money market, you deposit tokens and receive a yield-bearing receipt token (like Compound's cTokens). In the Dolomite Margin Protocol, your balance is tracked natively — you do not receive a separate token simply for holding a supplied position, though the protocol can still interact with external systems through wrapped representations.

The margin system is built on top of this accounting layer. It enables isolated or cross-margin borrowing positions where your supplied assets offset your borrowed amounts within a single account view. Think of it as a brokerage margin account — entirely on-chain and governed by smart contracts rather than a prime broker.

To borrow, you first need deposited collateral. The protocol assigns each asset a collateral factor — for instance, ETH might allow you to borrow up to 80% of its value. Your "health factor" reflects how close you are to the liquidation threshold across all your open positions.

Open the Borrow tab, choose the asset you want to borrow, and enter an amount within your available credit. The transaction sends the borrowed tokens directly to your wallet. Interest accrues continuously on the borrowed balance, increasing your total debt with every block.

Keep your health factor comfortably above 1.0. If it falls to or below 1.0, your collateral becomes eligible for liquidation. A sensible rule of thumb: borrow no more than 50–60% of your maximum to leave room for price fluctuations. The Borrow Positions panel on the main page provides a real-time view of your current positions and health factor.

Repaying is straightforward — return to the Borrow tab, select your position, and repay it partially or in full. A partial repayment improves your health factor without closing the position entirely.

The Dolomite Finance protocol's smart contracts have undergone formal audit reviews. The platform also integrates with Chainalysis for compliance screening — you will notice the "Protected by Chainalysis" badge in the lower left corner of the main interface, which screens wallet addresses linked to sanctioned activity before transactions proceed.

No DeFi protocol is entirely risk-free. Smart contract vulnerabilities, oracle failures, and extreme market conditions all pose genuine risks. Dolomite Finance reduces oracle risk by using Chainlink price feeds and applying conservative collateral factors, but users should understand that no audit can eliminate every possible attack vector.

On the operational side, the team has made smart contract addresses publicly available. Users comfortable reading Solidity can verify the contract logic themselves. The GitHub repository at github.com/dolomite-exchange contains relevant code for independent review.

Practical safety habits: never deposit more than you can afford to lose in any DeFi protocol, monitor your borrow positions on a regular basis, and maintain a buffer between your current debt level and your liquidation threshold.

DOLO is the native governance and incentive token of the Dolomite Finance protocol. It appears in the Earn list as a depositable asset and plays a central role in the incentive programs that boost yields on select markets.

The token is distributed through several mechanisms: direct supply incentives on featured assets, airdrop programs for early and active users, and through the oDOLO options-based reward system described below. Holding DOLO also provides access to governance participation and the veDOLO locking mechanism.

DOLO can be bridged across networks using the DOLO Bridge link found in the main menu. This is important because Dolomite Finance operates on multiple chains — Ethereum, Arbitrum, Berachain, Mantle, and Botanix — and DOLO may need to move between them depending on where you are active.

veDOLO stands for "vote-escrowed DOLO." It is a locked form of the DOLO token that grants holders greater governance influence and a larger portion of protocol incentives. The longer your lock duration, the more veDOLO you receive per DOLO locked.

This model, made popular by Curve Finance's veCRV system, aligns long-term token holders with the health of the protocol. Locking tokens reduces circulating supply and rewards those committed to the Dolomite Finance platform over months or years rather than days.

veDOLO holders can direct liquidity incentives toward specific markets, which is why certain assets on the Earn page show boosted blue APRs — those boosts are frequently the result of veDOLO voting. If you hold a meaningful DOLO position and intend to stay long-term, locking for veDOLO is worth exploring. Check the veDOLO tab in the main navigation for current locking options.

Yes. Dolomite Finance supports multiple wrapped and bridged Bitcoin representations. WBTC (Wrapped BTC) is available on Ethereum and has been a DeFi staple for years. cbBTC (Coinbase Wrapped BTC) is a more recent, Coinbase-issued option. SolvBTC is a third alternative from the Solv Protocol ecosystem.

Each carries a slightly different trust model. WBTC relies on a centralized custodian holding native BTC. cbBTC is backed by Coinbase. SolvBTC uses a distinct vault mechanism. All three are ERC-20 tokens pegged 1:1 to BTC and can be deposited into Dolomite Finance to earn supply yield or used as collateral for borrowing stablecoins or ETH.

Native Bitcoin does not exist on EVM chains — you will always need a wrapped version. The specific APR and borrowing availability for each BTC token varies; check the Earn page for current rates.

When a borrower's health factor reaches 1.0 or below — meaning their collateral value no longer sufficiently covers their debt — the protocol makes that collateral available for liquidation. A liquidator (any outside party operating liquidation bots) repays a portion of the borrower's debt and receives collateral in return at a discount.

That discount is the liquidation bonus. It motivates liquidators to act swiftly, keeping the protocol solvent. The exact bonus percentage depends on the collateral asset involved.

From a user's perspective, the best way to avoid liquidation is straightforward: maintain a comfortable health factor, set up price alerts for your collateral assets, and proactively repay debt or add collateral if the market moves against you. The Dolomite Finance interface displays your real-time health factor in the Borrow Positions section — review it regularly during volatile market conditions.

As of the current deployment, Dolomite Finance operates on Ethereum, Arbitrum, Berachain, Mantle, and Botanix. The network selector button in the top-right corner of the interface lists all available options.

Each network has its own set of supported assets and liquidity pools. Arbitrum was the original home of Dolomite Finance and has the deepest liquidity. Ethereum is the newer flagship deployment with access to the broadest range of ERC-20 assets. Berachain, Mantle, and Botanix are more recent deployments featuring unique local assets.

Switching networks in your wallet automatically updates the interface to display the correct markets. Gas costs differ considerably between chains — Arbitrum and Mantle tend to be significantly cheaper than Ethereum mainnet, which is an important consideration for smaller deposit or withdrawal transactions.

oDOLO is an options-based reward token that Dolomite Finance uses to distribute incentives. Rather than issuing raw DOLO directly, the protocol distributes oDOLO — a call option that allows the holder to purchase DOLO at a discounted price relative to market value.

This structure benefits long-term protocol participants more than short-term yield farmers. Someone who immediately sells their reward tokens puts downward pressure on the price. With oDOLO, recipients must actively choose to exercise the option, which requires some capital commitment. Those who exercise receive DOLO at a discount, and the protocol receives payment that can fund operations or liquidity.

The Transaction Settings panel includes a toggle to show or hide oDOLO rewards within the displayed APR figures. When included, certain assets show noticeably higher total yields. When excluded, you see only the base interest rate generated by lending activity.

Color coding on the Earn page indicates the source of yield. A green APR means the return comes entirely from borrowers paying interest inside the Dolomite Finance protocol — it is pure lending income, generated on-chain with no external dependency.

A blue APR means the displayed rate includes external rewards layered on top of the base yield. This could be DOLO incentives, yield from an underlying rebasing token (such as wstETH's staking yield), or rewards from a partner protocol. Blue rates display a sparkle icon next to the number. Hover over it to see a tooltip breaking down each component.

Blue rates are frequently higher but carry an additional layer of dependency. If the external reward program concludes, the blue APR reverts to whatever the underlying green base rate would be. For planning purposes, treat the green portion as the reliable baseline and the blue portion as variable upside.

Three things: a Web3 wallet, some ETH for gas, and the asset you want to deposit. That's the short version.

Longer version: install MetaMask or another compatible wallet if you do not already have one. Fund it with the network's native gas token — ETH on Ethereum mainnet, ETH on Arbitrum, BERA on Berachain, MNT on Mantle. Then visit the Dolomite Finance app, connect your wallet, and navigate to the Earn tab. Browse the token list, review the current supply rates, and choose what aligns with your goals.

If you plan to borrow, start by depositing more collateral than you intend to borrow against. Aim for a health factor of at least 1.5 to begin with — that gives you a meaningful buffer before any liquidation risk becomes a real concern.

For more context on the team and protocol vision, read the about page. And if you have questions not addressed here, the Discord community linked in the main menu is active and welcoming.