Staked DOLA

by Inverse Finance

Current APY
9.22%
30d Avg APY
11.84%
90d Avg APY
84.54%
TVL
$3.9M

What is sDOLA?

sDOLA is the yield-bearing version of DOLA, the decentralized stablecoin issued by Inverse Finance. It is implemented as an ERC-4626 tokenized vault on Ethereum mainnet. When you deposit DOLA into the sDOLA vault, you receive sDOLA shares whose value appreciates over time as lending revenue accrues from FiRM, Inverse Finance's fixed-rate lending protocol.

How does sDOLA generate yield?

The yield comes from DOLA borrowing revenue generated on FiRM. Borrowers on FiRM pay fixed interest rates to borrow DOLA against collateral like WBTC, WETH, and other assets. This interest revenue flows into the sDOLA vault, increasing the exchange rate between sDOLA and DOLA over time. The APY varies based on FiRM's total borrowing demand and DBR's price, the tokenized borrowing credits. Unlike many DeFi yields that rely on token emissions, sDOLA's yield is organic, it comes from real lending revenue, via the automated sale of DBR tokens in a dutch autcion.

Who issues DOLA and sDOLA?

DOLA is issued by Inverse Finance, a decentralized autonomous organization (DAO) governed by INV token holders. Inverse Finance has been operating since 2021 and is known for building FiRM, a fixed-rate lending market, and the DOLA Fed system that manages DOLA's supply across DeFi. The sDOLA vault contract is deployed on Ethereum mainnet and is governed by the Inverse Finance DAO.

Risk profile

sDOLA's risk profile is moderate within the yield-bearing stablecoin landscape. The primary risk is smart contract risk in both the sDOLA vault and the underlying FiRM lending protocol. DOLA itself could depeg if FiRM borrowers' collateral values decline sharply, though FiRM uses Personal Collateral Escrows (PCEs) and a Debt-Based Liquidation system to mitigate this. Yield concentration risk is also present since all revenue comes from a single lending protocol. On the positive side, the mechanism is transparent and fully on-chain, with no reliance on centralized exchanges or off-chain assets.

Peg and redemption

sDOLA is always redeemable for the underlying DOLA at the current exchange rate determined by the vault. There is no lock-up period, you can withdraw your DOLA at any time by redeeming your sDOLA shares. DOLA itself maintains its peg through the DOLA Fed system, which manages liquidity across Curve, Balancer, and other DEXs. DOLA has maintained a tight peg throughout its history, though minor deviations can occur during periods of high market volatility.

Key Risk Factors

  • Smart contract risk (FiRM protocol and sDOLA vault)
  • DOLA depeg risk, DOLA is backed by a basket of collateral on FiRM
  • Yield variability, returns depend on FiRM borrowing demand and utilization
  • Concentration risk, yield is generated from a single protocol

How to Get sDOLA

  • Direct redemption via the sDOLA contract on Ethereum
  • Stable Yields interface (0.1% Enso routing fee)
  • sDOLA Earn app (earn.inverse.finance)

Details

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