DBR
DOLA Borrowing Right Token
DBR is the token at the core of FiRM's architecture — and the reason FiRM can offer fixed-rate, indefinite-duration borrowing without relying on variable utilization curves or maturity dates. Rather than charging interest through a floating rate that adjusts with pool utilization, FiRM requires borrowers to hold DOLA Borrowing Rights: an ERC-20 token that depletes continuously at a rate proportional to outstanding debt. The price you pay for DBR on the open market is your effective annual borrowing rate, determined before you open a position and locked in the moment you buy.
The core mechanic in one line: 1 DBR entitles you to borrow 1 DOLA for 1 year. To sustain a loan of 1,000 DOLA for twelve months, you need 1,000 DBR. If DBR trades at $0.05, your effective annual rate is 5%.
How DBR Streaming Works
When a borrower opens a FiRM position, they must hold sufficient DBR to cover their outstanding debt. DBR doesn't disappear at the moment of borrowing — it depletes gradually over time at a fixed rate tied to the size of the loan. Specifically, each 1 DOLA of outstanding debt consumes approximately 1 DBR per year, accruing per block. A borrower carrying 1,000 DOLA in debt will see their DBR balance decline by roughly 2.74 tokens per day.
The duration is also flexible. You don't have to buy DBR for a full year — you can borrow 2 DOLA for 6 months, 4 DOLA for 3 months, or any other combination. What matters is that your DBR balance covers your debt over however long you plan to hold the position.
This streaming mechanic produces several properties that distinguish FiRM from conventional lending protocols. The cost of borrowing is fully transparent before a position is opened — the rate is simply the market price of DBR at the time of purchase, with no hidden fees or retroactive adjustments. Rate changes don't affect existing borrowers: if DBR becomes more expensive after you've already bought your supply, your effective rate doesn't change until your current holdings run out and you need to top up. And there is no maturity date or rollover requirement — a position can remain open indefinitely as long as collateral stays above the liquidation threshold and the DBR balance remains positive.
Time is the cost. DBR depletion is constant and unavoidable as long as a loan is outstanding. Unlike a fixed-term loan, there's no moment when "the interest is paid" — the cost of borrowing is continuous. Users who underestimate their holding period and buy too little DBR will face forced replenishment.
Replenishment and Liquidations
If a borrower's DBR balance reaches zero, FiRM's replenishment mechanism activates. External bots monitor all active positions and can call forceReplenish on any underfunded borrower. When triggered, additional DBR is added to the borrower's position and the cost — priced at a substantial premium to market DBR pricing — is added to their outstanding debt balance. This premium exists to incentivize responsible loan management and to avoid relying on oracle infrastructure for the replenishment price.
Replenishment can repeat if the borrower continues to neglect their DBR balance, with each cycle adding more debt. If the accumulated debt eventually reaches the maximum allowed by the borrower's collateral factor, the position becomes eligible for liquidation. At that point, third-party liquidators can repay the loan and claim the collateral, earning a liquidation fee for doing so.
Best practice: Maintain a DBR buffer that extends your projected depletion date by at least 30 days beyond your expected loan duration. The FiRM app displays your current depletion timeline in real time based on your outstanding debt, making it straightforward to know when to top up.
See also: FiRM Liquidations & Replenishments for a detailed explanation of how the liquidation process works and how to avoid it.
Getting DBR
DBR is available through several channels, and the right one depends on your context.
Through the FiRM app — When opening or managing a position, the FiRM interface includes an inline DBR purchase flow. This is the most convenient path for active borrowers, as it allows you to buy exactly the amount you need for your planned holding period without leaving the app.
On Curve Finance — The primary source of on-chain DBR liquidity is the triDBR LP on Curve. DBR can be purchased by swapping DOLA directly, or through DEX aggregators (Cow Protocol, 1inch, LlamaSwap, Matcha) that route through the pool. This is the preferred option for users who want to pre-purchase DBR separately from opening a position, or who are buying larger amounts where pool depth matters.
Via the DBR xy=k Auction — The protocol operates a continuous virtual xy=k auction that sells newly issued DBR for DOLA. The auction price decreases every second until a purchase is made, at which point it resets upward — MEV bots typically arbitrage between the auction and the triDBR pool on Curve whenever a spread opens. A frontend for the auction is available at inverse.finance/xykauction. DOLA proceeds from the auction currently flow via the sendToSaleHandler() function toward repaying outstanding bad debt from the 2022 Frontier exploit, with governance able to redirect the proceeds in the future (for example, to the DAO treasury).
DBR Supply and Issuance
DBR is not a fixed-supply token. The protocol issues new DBR through two governance-controlled channels.
Streaming to INV stakers distributes DBR continuously to INV holders who stake their INV on FiRM, streamed with each new Ethereum block and claimable at any time. This aligns long-term INV holders with the health of FiRM and provides a baseline level of DBR supply independent of auction conditions.
The xy=k auction continuously sells DBR for DOLA at market-clearing prices. The Fed Chair multisig sets the DbrRatePerYear within a maximum annual ceiling approved by governance. The DAO uses the issuance rate as an active tool for targeting DOLA lending growth: if FiRM currently has 5,000,000 DOLA borrowed but the target is 8,000,000 DOLA, the DBR issuance rate can be raised toward 8,000,000 DBR per year to bring down the borrowing cost and stimulate demand. Contracting the rate reverses the process.
This makes DBR issuance one of the most consequential policy levers the DAO controls: too little supply and debt growth stalls as borrowing becomes prohibitively expensive; too much and the cost of borrowing falls to a level that weakens sDOLA yield. The goal is a DBR market that clears at a rate that sustains both healthy borrowing demand and meaningful auction revenue.
Practical Examples
DBR's flexibility is best illustrated through concrete scenarios.
Short-term loan: A borrower deposits wETH and borrows 800 DOLA for three days. They need approximately 6.6 DBR (800 × 3/365). At current market prices, the DBR cost is a fraction of the loan amount — and the rate was known precisely before the position was opened.
One-year loan: The same borrower plans to hold 800 DOLA for a full year. They acquire 800 DBR, locking in their effective annual rate at the current DBR market price for the entire duration, regardless of what happens to DBR pricing after they buy.
Pre-purchasing DBR: A borrower anticipates needing a large loan in the future and notices that DBR is trading at an unusually low price. They purchase DBR now and hold it — effectively locking in a future borrowing rate before the loan is even opened. This is only possible with DBR's design; variable rate protocols offer no equivalent mechanism.
DBR Use Cases
DBR's fixed-rate, duration-flexible design unlocks a broader range of use cases than is practical with variable-rate lending.
Yield farmers who loop strategies against FiRM can borrow at a known cost for as long as they need, eliminating the risk of an interest rate spike that could trigger a liquidation cascade. If farming yields rise, the farmer holding DBR benefits — DBR prices typically rise alongside demand, meaning a portion of the improved farming environment is captured in the value of their remaining DBR balance.
Borrowers financing real-world needs — home down payments, tuition, business capital — can fix their borrowing cost for months or years with no rollover risk. DBR also supports an idea analogous to assumable mortgages: a borrower could theoretically transfer a below-market-rate DBR position to another party along with an underlying asset.
Rate locking is a natural use case for anyone who expects DBR to become more expensive over time. Purchasing DBR in advance of a loan locks in the current rate the moment of purchase, providing a hedge against future rate increases without requiring any active management.
DAOs can use FiRM to borrow against idle treasury assets at a fixed, predictable cost — funding operational expenses like payroll or liquidity mining without selling governance tokens or accepting variable rate risk.
DBR and sDOLA
The auction revenue from continuous DBR sales flows directly to sDOLA holders. When you stake DOLA into the sDOLA vault, you receive a proportional share of the DBR auction proceeds, auto-compounded into your staked balance. This creates a direct economic relationship between FiRM borrowing demand and sDOLA yield: when borrowers compete more aggressively for DBR, auction prices rise and sDOLA returns increase. When demand is slower, yields moderate in line with actual protocol revenue.
This revenue structure is what makes sDOLA yield genuinely sustainable. It is not funded by token emissions, farming incentives, or dilutive issuance — it is the direct output of fees paid by borrowers for the fixed-rate borrowing FiRM provides.
DBR and jrDOLA
jrDOLA, the protocol's first-loss insurance layer, also distributes DBR rewards to its depositors. Governance allocates a DBR budget — managed by the TWG operator multisig within limits set by governance — to incentivize deposits into the jrDOLA vault. The more DBR allocated to jrDOLA, the more attractive the yield for depositors willing to accept bad debt risk. This creates a market-driven mechanism for capitalizing the insurance buffer: when jrDOLA returns are competitive, the buffer grows, and the protocol can expand FiRM lending with greater safety for DOLA holders.
Next Steps
Borrow DOLA using DBR on FiRM → Getting Started with FiRM
Earn yield from DBR auction revenue → sDOLA
Provide insurance coverage and earn DBR → jrDOLA
Understand FiRM's full security architecture → FiRM Security & Safety
See all supported collateral markets → FiRM Collateral Guide
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