In December 2022, Inverse Finance launched the most advanced fixed rate lending market in the industry, FiRM. In parallel, we launched a new form of tokenized interest rate, the DOLA Borrowing Right or DBR. Just over one year later, we are thrilled to announce the publication of a whitepaper that provides a detailed overview of a new yield-bearing stablecoin, sDOLA.
sDOLA is born out of a desire to expand DOLA lending capacity on FiRM more rapidly, add a new USD peg management tool to our arsenal, as well as to bring a new source of demand for DOLA itself. By using DBR’s as its exclusive “organic” yield source, sDOLA stands apart from yield bearing stablecoins which rely on centralized sources of yield like Treasury securities - effectively rendering those products “centralized” and therefore at risk of censorship and other risks of the sort experienced by clients of Silicon Valley Bank or FTX.
The implications of sDOLA for the DAO are hard to overstate. As sDOLA deposits grow, FiRM’s DOLA lending capacity grows at a 1:1 rate. And as lending grows, so does DBR issuance. And finally as DBR issuance grows, it gets distributed back to … INV and sDOLA holders. This “4-part lending system” is unlike any other DeFi lending or saving system in the industry today.
sDOLA is primed to launch with an attractive APY – close to the price (borrowing rate) of DBR today – in order to generate immediate demand for sDOLA. Relative to yields found on other yield bearing stablecoins that are sourcing yield from government bonds, the difference will be clear.
Our vision for DOLA is a world where decentralized stablecoins are used for most goods and services and fixed rate credit is central to that vision. With sDOLA, there is an opportunity to build on our 2023 success with FiRM - where we found product-market fit - and take the next step towards radically scaling fixed-rate DeFi lending in ways not previously possible.
We invite you to dive into the sDOLA whitepaper now and then consider becoming a contributor to the Inverse Finance community by joining the conversations on Discord or Twitter. More details about sDOLA, governance voting, and the launch are imminent. LGTM.
