🎉 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 phising attempts.