Inverse Finance


Where does the DOLA that I borrow come from?

Inverse Finance Fed contracts mint DOLA directly to the supply side of lending markets or to the DOLA-3CRV Curve pool or other fed-enabled liquidity pools in response to market DOLA demand. If DOLA demand decreases, they retract and burn DOLA from the supply. Read more in the DOLA Price Stability page.
This includes Frontier and any lending market officially partnered with Inverse Finance. Check out our Transparency page to find an up-to-date list of our partners.
Users can also exchange DAI for DOLA or DOLA for DAI for a 0.1% fee using The Stabilizer. When swapping DAI for DOLA in the stabilizer, DOLA is minted and sent to the user’s wallet. The DAI will remain in The Stabilizer until another user initiates a swap of DOLA for DAI. The Stabilizer will then take the 0.1% fee and burn the rest of the DOLA.

Is DOLA algorithmic? Is it backed by INV?

No. DOLA is debt-backed which means that you don't burn or redeem another token to create it, each DOLA is instead backed by collateral assets locked in as debt lending markets or by the other token(s) in a liquidity position created by a Fed. INV is not used to mint or redeem DOLA. INV is however one of the collateral assets typically used as collateral for DOLA loans in Frontier.

What is the advantage of DOLA?

In the world of DeFi, there is no shortage of stablecoins currently available on the market. What makes DOLA unique and advantageous compared with other stablecoins is the ability for Inverse Finance to mint it onto the lending side of partnered protocols and into liquidity pools.
This is a massive advantage to a lending market that is looking to grow rapidly, as borrowable stablecoin liquidity can be instantly supplied by Inverse Finance at low interest rates for borrowers. We call this a win-win-win situation:
  1. 1.
    The partnered lending protocol wins as they can expand their protocol’s TVL rapidly while taking a cut of the profits from DOLA borrowers
  2. 2.
    Borrowers win as they have access to the most capital-efficient, decentralized stablecoin on the market at low interest rates
  3. 3.
    Inverse Finance wins as the treasury earns interest from DOLA borrowers
Also, this allows for Inverse Finance to seamlessly expand DOLA’s use on chains other than Ethereum, where Frontier does not have a presence. This is done by partnering with well-established lending protocols on the other blockchain and through bridges like Multichain/Anyswap. Inverse Finance has demonstrated the success of this advantage already by partnering with Velodrome and Beefy on Optimism which is a gas efficient second layer on top of Ethereum.

What DOLA Yield Opportunities Are There?

Take a look at the current Yield Opportunities for DOLA.

How are official lending partners selected?

The Inverse DAO selects and controls which lending markets get ‘whitelisted’ to have DOLA minted onto their ‘supply’ side. First, potential lending market's pros and cons are discussed in the Inverse Finance Discord. The next stage is for a proposal to go to the Inverse Finance Forum; at this stage, vetting of the protocol is carried out along with the collateral options in the lending pool. The Inverse Finance DAO takes a low-risk approach when deciding whether to ‘whitelist’ a lending market for DOLA minting. The final stage is to take it to an official on-chain governance vote in the Inverse DAO, where INV and xINV token holders can vote ‘for’ or ‘against’. If the proposal passes, then the lending protocol will become an official partner, and Inverse Finance will have the ability to mint DOLA onto the ‘supply’ side of the pool.
If you are member of a lending protocol interested in being whitelisted for DOLA minting, then jump into our Discord.
To see an example of a lending protocol being voted through in the DAO, check out Proposal 27 from the Alpha era, where Rari Fuse Pool 6 was whitelisted for DOLA minting (among many other actions).