Next-Gen Composable Leverage w/ Corey Caplan of Dolomite

Samuel McCulloch
Samuel McCulloch
Nov 22, 2023
Next-Gen Composable Leverage w/ Corey Caplan of Dolomite

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In this episode of Flywheel, we invited on Corey Caplan, who was recommended as a great guest by the wonderful WenMoon a month ago. Well we took her advice to heart and immediately booked Corey to come on the show... and we were super impressed with his poise, knowledge, and overall understanding of why we build for DeFi and crypto.

Corey is the CEO and Co-founder of Leavitt Innovations and the Director of the Dolomite Foundation. Before Dolomite, he built Loopring, one of the first zk enabled DEX's.

What is Dolomite?

Dolomite is an advanced decentralized money market protocol and DEX,that has broad token support and high capital efficiency, thanks to its virtual liquidity system. It blends the capabilities of a decentralized exchange (DEX) with those of a lending protocol, offering services such as over-collateralized loans, margin trading, spot trading, and other financial instruments. Dolomite makes easy hedging portfolios, leveraging assets, or unlocking dormant equity through its efficient capital utilization and with low fees.

Dolomite's architecture is modular, consisting of a core (immutable) layer and a module (mutable) layer. This combines a stable base with the flexibility to adapt to new trends when they come along. Its core margin protocol uses this modularity to offer pair trading, impermanent loss trading, and trading within Dolomite using various DEX models while still earning lending yield.

Dolomite also has a virtual liquidity system, enabling users to simultaneously earn swap fees and lending yields, offering additional revenue streams during market downturns. Their internal liquidity trading allows for asset swaps within the system without impacting the external market. So if there is another USDC depeg and a user has USDT and wants to buy USDC, they can do it virtually with Dolomite.

For example, with plvGLP, users can stake their entire deposited balance within Dolomite and still borrow against their virtual balance. GLP is a terribly hard asset to price exactly, as the balances of its composition change block by block. But with virtual pricing, internal debt can be issued against the asset.

Crush the Arbitrum STIP with Dolomite

Dolomite has received a grant of 1,000,000 ARB to help grow TVL on Arbitrum. This program allows users to stake deposited USDC, ETH, WBTC, ARB, and LINK for oARB emissions. oARB, the protocol's reward token, is emitted continuously and can be vested on a first-come, first-serve basis. The amount of oARB earned by a user is proportional to the amount of liquidity they provide for each asset, distributed from a weekly pool of 90,000 oARB.

Claim your accumulated oARB every Thursday during the STIP. A minimum threshold of 0.1 oARB is set for claiming; if the amount earned falls below this threshold, the claimable amount will show as zero.

To vest oARB, you will need to pair it with an equivalent amount of ARB for a chosen duration, ranging from one to four weeks. The discount rate varies depending on the chosen vesting period - ranging from 2.5% for a one-week vest to 20% for a four-week vest. For instance, vesting 100 oARB requires pairing it with 100 ARB. This pairing is locked for the duration of the vesting period, after which the paired ARB is returned.

Once the vesting period is complete, you have a one-week window to execute your vest. You use ETH to purchase the vested ARB at the discounted rate, determined by the market price at the time of execution. Post-execution, the ARB equivalent to the oARB vested, along with the locked ARB is returned to you.

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