DOLA is a natively yield generating asset. Users can buy DOLA and supply it to Anchor to earn interest from DOLA minters.
Unique leverage positions
As additional synthetic assets (synths) are issued on Anchor, different synths can be used to collateralize one another, allowing traders to enter an unlimited number of unique leveraged positions which would otherwise require custom derivatives.
Protocol to protocol lending
Anchor can be used to issue DOLA to qualified protocols with a low risk of default. This is similar to the Iron Bank, where protocol-to-protocol credit limits are replaced with a DOLA balance.
One application of protocol to protocol lending is lending to yield aggregators looking to borrow assets from Anchor to leverage their vaults yield. In this case, Inverse DAO can issue a 0-collateral DOLA loan to the protocol's strategy contract. The issued DOLAs would only be used as collateral to borrow other assets from Anchor. These assets then match user deposits in the yield aggregator's vault to increase their APY.
This opens up the ability for Anchor to act as a fractional reserve protocol with INV token as a backstop. The Inverse DAO could vote to supply capital in the form of tokens or synthetic assets (eg DOLA) to vetted counter-parties with low default risk.
Whale Extractable Value (WEV) acquisition (yield farming)
Given a highly liquid and diverse pool of borrowable assets on Anchor and sufficient DOLA liquidity on automated market makers (AMMs), Inverse DAO can capture yield opportunities of its listed assets from other DeFi protocols by following these steps:
Inverse DAO finds a yield opportunity generated by another protocol.
The DAO “lends itself” an amount of DOLA.
If the required deposit asset is a stable, the DAO swaps DOLA to the stable using Curve. If it’s a non-stable, it uses DOLA as collateral on Anchor to borrow the asset.
The DAO uses the asset to generate yield using the appropriate strategy.
At a later time, the DAO reverses the steps above and burns the minted DOLA amount and keeps the generated yield.
The generated profit from these WEV crusades would be kept in the DAO treasury.