Where does the DOLA that I borrow come from?

Inverse Finance can mint DOLA to the ‘supply’ side of lending markets (and only to these markets) as demand increases. This includes Anchor and any lending market officially partnered with Inverse Finance; check out our ‘Transparency’ page to find an up-to-date list of our partners. Being able to expand and contract the supply side allows Inverse Finance to control the interest rates on these DOLA lending markets . This is important as it enables Inverse Finance to ensure that the growth of DOLA is done sustainably and without damaging the peg.
Users can also exchange DAI for DOLA, and vice versa, for a 0.4% fee using The Stabilizer (a feature of our Anchor product). 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 ‘burnt’ that DOLA out of existence).

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. 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 Anchor 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 Scream on the Fantom blockchain.

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 markets are discussed in the Inverse Finance Discord, where pros and cons are discussed. 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).