🎉 Interest Rate Model Update 🎉
Borrowing on Dolomite just got a major upgrade.
More predictability. Lower costs. Smoother markets.
Let's break down the changes 🧵👇
🔗 Full article:
Now let’s talk about what changed — and why it matters.
🧵👇
First, some background:
Dolomite uses a dual-slope interest rate model.
📌 0–90% utilization = moderate rate climb
📌 90% utilization = the optimal utilization rate
📌 90–100% = sharp increase in rates (post kink)
The fast increase post kink drives rates higher quickly in order to maintain necessary liquidity for redemptions and withdrawals, and to encourage new deposits.
📉 TL;DR on what’s better:
We have lowered the max borrow rate caps at 100% utilization on certain assets resulting in:
🌻 Lower average APR across the board
🌹 Lower max costs, even at 100% utilization
🌷 More stable markets
⛵ Goodbye, scary spikes. Hello, smooth sailing.
🧠 Why soften the curve?
Because when rates spike too fast at high utilization, borrowers get squeezed.
Resulting in:
❌ Hasty repayments
❌ Panic liquidations
❌ Risk-off behavior
Now, even at 100% utilization, borrow rates are capped at a lower max rate and climb more gently.
🏦 Who wins from this?
🕺 Borrowers: Lower cost of capital & less liquidation risk
🕴️ Strategy builders: More confidence when looping or hedging
🤽 Liquidity providers: Healthier utilization = steadier yields
🏔️ Dolomite itself: Bigger, longer-lived positions = higher TVL
We've also made some minor tweaks to other setpoints.
It’s all about tuning incentives so borrowing remains efficient — across stablecoins and majors like ETH & BTC.
The new settings:
🤝 Our new model is designed to be capital-efficient and user-friendly.
The future of on-chain borrowing isn't just fast; it's predictable, powerful, and built for strategy.
Try it out now:
Any posts below this claiming to be from us are likely phishing attempts.
11.25K
20
The content on this page is provided by third parties. Unless otherwise stated, OKX is not the author of the cited article(s) and does not claim any copyright in the materials. The content is provided for informational purposes only and does not represent the views of OKX. It is not intended to be an endorsement of any kind and should not be considered investment advice or a solicitation to buy or sell digital assets. To the extent generative AI is utilized to provide summaries or other information, such AI generated content may be inaccurate or inconsistent. Please read the linked article for more details and information. OKX is not responsible for content hosted on third party sites. Digital asset holdings, including stablecoins and NFTs, involve a high degree of risk and can fluctuate greatly. You should carefully consider whether trading or holding digital assets is suitable for you in light of your financial condition.