Nikolas Sargeant
Dolomite, the next-generation DeFi lending protocol for efficient capital deployment, has launched its “vote-enabled ARB”, or vARB token.
In a press release shared with Cryptowisser, Dolomite said the vARB token allows users to borrow against their ARB deposits while participating in governance voting on the Arbitrum network.
The team explained that the vARB token is not a new digital asset, and it cannot be transferred or traded. Rather, it represents a way for ARB deposited as collateral to be simultaneously used for governance voting, but it cannot be lent and borrowed.
Furthermore, the vARB is also different from the regular ARB, which can be lent, borrowed, and used as collateral but not voting. The new tokens are effectively held in “isolation mode” and can still be used for governance voting, unlike those locked into Dolomite’s liquidity pools for lending and borrowing.
This latest development comes after Dolomite launched its ARB governance token in March 2023, enabling community members to vote on the future direction of the network. The Arbitrum DAO consequently held its first major vote in October, when ARB token holders voted on which projects should receive an allocation from a 50M ARB grant through the Arbitrum Short Term Incentives Program, and there are many new proposals currently up for consideration.
ARB token launch was a key milestone for Arbitrum in its evolution towards being a truly decentralized and democratic network. However, it presents certain challenges to users as they are forced to choose between voting on governance matters or engaging in decentralized finance activities. When ARB is deposited into protocols such as Aave and Compound, it cannot be used for voting.
Dolomite’s vARB token solves this problem for ARB users. Furthermore, vARB can be freely converted to ARB and vice versa. With vARB, users can participate in governance while simultaneously using the same asset to engage in lending and borrowing activities. Once a user converts their ARB to vARB, they can then delegate that vARB for voting in the same way as they would with traditional ARB.
The primary benefit of vARB is that it allows users to amplify the weight of their votes by using it as collateral to borrow additional ARB, which can then be swapped for more vARB. Users can continue along this loop to maximize the weight of their vote by up to five times the initial amount of ARB they held.
Dolomite is a protocol that allows users to unlock dormant capital by smarter borrowing and lending. It enables smarter asset deployment through powerful integrations across the DeFi ecosystem. Dolomite's advanced architecture supports separate borrow positions from a single wallet, each with a distinct risk profile.
