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Announcing sDOLA, The Organic Yield-Bearing Stablecoin

Patb
Patb

Head of Growth

sDOLADSA

2 min

Cover Image for  Announcing sDOLA, The Organic Yield-Bearing Stablecoin

We are happy to announce the launch of sDOLA, our new yield-bearing stablecoin. With sDOLA, you can now enjoy high yields and a fully decentralized yield source you can trust. sDOLA represents an inflection point for Inverse and we’ll do a quick explainer below:

What is sDOLA?

sDOLA is an ERC-4626 wrapper around a DOLA Savings Account (DSA) contract that continuously streams DOLA Borrowing Rights rewards to staked DOLA and auto-compounds them. This means you'll receive generous yield on your stablecoin portfolio without the hassle of manual swapping and compounding.

sDOLA system diagram

In practice, sDOLA makes an outsized impact on the Inverse ecosystem as it enables a four-part lending system (FPLS) for the DAO whereby the improvement or expansion of one system component leads to improvement or expansion of one or more other components supporting FiRM.

4-Part Lending System Mechanics

sDOLA: An Additional DOLA USD Peg Management Tool

An alternative example of this four-part system in operation is the case of DOLA losing its USD peg during a (hypothetical) market downturn. While not the DAO’s sole tool for managing DOLA’s USD peg, sDOLA provides a useful option where the supply of DBR Rewards is increased to bring DOLA back to peg. For example:

Peg management example

How sDOLA Differentiates vs. The Competition

sDOLA stands out not only for its healthy APY (projected to be ~14% in the coming weeks) but also because its yield is 100% organically sourced from actual on-chain FIRM lending market revenues. No rehypothecation of your collateral to third parties takes place. Oh - and no governance tokens are being printed to source sDOLA yield.

How You Can Profit from sDOLA

We’re excited to bring you an amazing set of use cases for sDOLA. Here’s the starter list:

  • Stable Store of Value. A core use case for sDOLA. Compared to conventional USD-pegged stablecoins, sDOLA helps protect savings from USD inflation by adding more DOLA to a user’s position. In lieu of holding “naked” stables in a portfolio for diversification, yield-bearing sDOLA carries no additional opportunity cost beyond the gas costs of staking. 

  • Loan collateral. While not available as collateral on FiRM, other lending protocols can add sDOLA as a stable form of yield bearing collateral. Borrowers utilizing looping strategies can realize significant returns with minimal risk of liquidation of the underlying asset due to sDOLA’s low volatility and yield generation. 

  • Yield-bearing liquidity partnerships. sDOLA is an attractive asset for protocols seeking to pair their stablecoin/token with a yield-bearing stablecoin, which will reduce liquidity costs given the pre-existing yield of sDOLA. 

  • Dollar-denominated savings for unbanked users. Individuals residing outside the U.S. often lack access to dollar-denominated savings vehicles. sDOLA provides permissionless access, no maturity dates, and high rates of return from anywhere in the world by anyone with access to a browser and a non-custodial wallet. 

  • Stablecoin Portfolio Diversification. For individuals, funds, or DAO treasuries holding stablecoins, sDOLA provides a decentralized yield-bearing hedge against the risks of centralized, yield-bearing stablecoins like sDAI or sFRAX. 

  • Single-sided alternative to stablecoin liquidity pools. The attractive APY for sDOLA will in many cases provide a comparable return to other stablecoin liquidity pools without the inconvenience and risk of farming on third party protocols.

It's a Great Time To Try sDOLA!

We believe sDOLA is the most coherent, scalable, and reliable yield-bearing stablecoin architecture ever created. Come stake at https://www.inverse.finance/sDOLA 

Want more research? Check out our whitepaper or our docs here. View the governance proposal or visit us in Discord and ask away!


Patb
Patb

Head of Growth


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