Dolomite

Dolomite’s infrastructure is centered around a suite of smart contracts that are written in Solidity and are deployed to the Arbitrum Ethereum layer 2 for public, transparent settlement. Solidity smart contracts offer the benefit of being publicly auditable, meaning the code and rules for a system can be seen and analyzed by anyone, at any time. Moreover, the state of any system that uses these smart contracts can be analyzed at any point in time to ensure the soundness of a system throughout its entire history. In an environment where trust is earned by remaining transparent and access to a system is fairly distributed, a system built around smart contracts is most certainly the way of the future.

The basis for these smart contracts were forked from dYdX, another company in the cryptocurrency industry, with minor changes (written in more detail here) made to the core system that greatly enhance its prior featureset. Meaning, audits of the protocol by Open Zeppelin and Bramah Systems should still be applicable. The changes that were made to the core and the new modules that hook into the system are described below, and have been audited by SECBIT in August of 2021. Some additional changes to the system were added after SECBIT’s security audit, but those additional changes, including the rest of the system, have 100% test and branch coverage.

The goal of this infrastructure and system is to enable easy and unstoppable access to spot trading, margin trading, passive liquidity provisioning, and other financial instruments through nothing more than a cryptocurrency wallet. It is important that systems that are fragile to price movements are incapable of going down and minimize any centralized points of failure. Dolomite intends to be amongst the first decentralized exchanges to tie major trends in decentralized finance (DeFi) into a uniform, sleek, and capital-efficient system that users can access at any time, from any type of device.

Over time, the protocol’s ownership will be democratized, to be owned by an on-chain DAO. Such a DAO would only be able to flourish and be decentralized if the protocol it governs is built purely on-chain, with ownership distributed amongst a wide variety of users, stakeholders, and others.

Note, all numeric figures reflect the state of the protocol to be deployed at the time of publication.