Dolomite, the lending and borrowing protocol working on Arbitrum, has launched a brand new function that may be filed below “Why didn’t anybody consider this sooner?”. Zap is a one-click collateral maximization resolution, saving customers from the chore of a number of depositing, borrowing, and re-depositing simply to acquire leverage on their property.
Dolomite Delivers a DeFi First
A high 50 protocol by complete worth locked (TVL), Dolomite is a DeFi primitive that’s very a lot on the up. That is demonstrated not just by the rising worth of its person deposits, however by the progressive merchandise it’s been repeatedly releasing. Whereas lending and borrowing protocols are plentiful inside decentralized finance, Dolomite provides one thing completely different from the standard ETH-and-stables combine. For instance, it permits margin buying and selling on protocols like GMX utilizing stablecoins and different DeFi property, one thing that isn’t typically potential elsewhere.
One other downside that Dolomite solves is the yield dilemma. DeFi customers are confronted with a selection of competing protocols, every providing an ROI ought to they lock their capital into the sensible contracts the place will probably be used to deepen complete liquidity. Dolomite permits customers to LP their property as a way to earn yield from AMMs after which to earn additional curiosity from margin lending the identical property.
Zap, due to this fact, slots neatly into Dolomite’s product suite, extending the capabilities of the protocol’s present choices. Not solely does Zap simplify the method of acquiring most capital, nevertheless it eliminates complexity, lowering the probability of customers taking a improper flip alongside the way in which. Whereas skilled DeFi customers are accustomed to looping their funds by way of quite a few depositing-borrowing cycles, the method is cumbersome and complicated for brand new customers.
Lending Dominates DeFi
Over the previous 18 months, lending has grown to change into the biggest DeFi vertical, outsizing even DEX buying and selling. That is partially because of the emergence of liquid staking derivatives (LSD) which have spawned a wholly new sector, LSDfi, wherein staked property can be utilized to safe different L2s and to earn yield elsewhere. In its H2 report for 2023, Binance Analysis notes that DeFi lending now boasts a TVL of $14.5 billion.
It goes on so as to add: “One other intriguing pattern over the previous few months has been the merging of lending platforms and stablecoin suppliers, showcasing a convergence that augments the utility and performance of those DeFi classes…This growth represents a key instance of the growing interoperability within the DeFi house, paving the way in which for future innovation and cross-functional options.”
Zap has the potential to play a modest function in supporting this pattern; the flexibility to maximise borrowing energy in a single click on is a serious increase for making lending easier and safer. The strange looping course of, whereas typically secure, does carry hazards for inexperienced customers who threat being liquidated in the event that they borrow too near their liquidation threshold and costs change.
Whereas Zap doesn’t remove the potential for liquidation altogether, it permits customers to borrow at a secure degree in a single go whereas giving them a transparent overview of their well being rating. Ought to costs change, threatening their collateral, they will rapidly high it up while not having to reverse the looping course of as would ordinarily be the case. Zap is about to go stay on Dolomite on August 8, ushering in a brand new period for lending on Arbitrum.
Dolomite, the lending and borrowing protocol working on Arbitrum, has launched a brand new function that may be filed below “Why didn’t anybody consider this sooner?”. Zap is a one-click collateral maximization resolution, saving customers from the chore of a number of depositing, borrowing, and re-depositing simply to acquire leverage on their property.
Dolomite Delivers a DeFi First
A high 50 protocol by complete worth locked (TVL), Dolomite is a DeFi primitive that’s very a lot on the up. That is demonstrated not just by the rising worth of its person deposits, however by the progressive merchandise it’s been repeatedly releasing. Whereas lending and borrowing protocols are plentiful inside decentralized finance, Dolomite provides one thing completely different from the standard ETH-and-stables combine. For instance, it permits margin buying and selling on protocols like GMX utilizing stablecoins and different DeFi property, one thing that isn’t typically potential elsewhere.
One other downside that Dolomite solves is the yield dilemma. DeFi customers are confronted with a selection of competing protocols, every providing an ROI ought to they lock their capital into the sensible contracts the place will probably be used to deepen complete liquidity. Dolomite permits customers to LP their property as a way to earn yield from AMMs after which to earn additional curiosity from margin lending the identical property.
Zap, due to this fact, slots neatly into Dolomite’s product suite, extending the capabilities of the protocol’s present choices. Not solely does Zap simplify the method of acquiring most capital, nevertheless it eliminates complexity, lowering the probability of customers taking a improper flip alongside the way in which. Whereas skilled DeFi customers are accustomed to looping their funds by way of quite a few depositing-borrowing cycles, the method is cumbersome and complicated for brand new customers.
Lending Dominates DeFi
Over the previous 18 months, lending has grown to change into the biggest DeFi vertical, outsizing even DEX buying and selling. That is partially because of the emergence of liquid staking derivatives (LSD) which have spawned a wholly new sector, LSDfi, wherein staked property can be utilized to safe different L2s and to earn yield elsewhere. In its H2 report for 2023, Binance Analysis notes that DeFi lending now boasts a TVL of $14.5 billion.
It goes on so as to add: “One other intriguing pattern over the previous few months has been the merging of lending platforms and stablecoin suppliers, showcasing a convergence that augments the utility and performance of those DeFi classes…This growth represents a key instance of the growing interoperability within the DeFi house, paving the way in which for future innovation and cross-functional options.”
Zap has the potential to play a modest function in supporting this pattern; the flexibility to maximise borrowing energy in a single click on is a serious increase for making lending easier and safer. The strange looping course of, whereas typically secure, does carry hazards for inexperienced customers who threat being liquidated in the event that they borrow too near their liquidation threshold and costs change.
Whereas Zap doesn’t remove the potential for liquidation altogether, it permits customers to borrow at a secure degree in a single go whereas giving them a transparent overview of their well being rating. Ought to costs change, threatening their collateral, they will rapidly high it up while not having to reverse the looping course of as would ordinarily be the case. Zap is about to go stay on Dolomite on August 8, ushering in a brand new period for lending on Arbitrum.
