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Lending protocol Dolomite has unlocked new DeFi possibilities with the release of Zap. The one-step collateral solution is deceptively powerful, supporting a host of new functions for borrowers on the Ethereum L2 network. <a href="https://dolomite.io/" rel="noopener noreferrer nofollow">Dolomite</a> is in the business of driving capital efficiency by enabling DeFi users to deploy their digital assets to the fullest extent. Its latest feature Zap supports that in several creative ways. 
<img decoding="async" loading="lazy" class=" wp-image-25183 aligncenter" src="https://walletinvestor.com/magazinadmin/wp-content/uploads/2023/08/Dolomite.gif" alt="" width="1309" height="735"> 
<h2 style="text-align: center;" id="strong-collateral-on-demand-strong">Collateral on Demand</h2> 
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DeFi users are accustomed to depositing their assets into lending protocols and then borrowing against them. For example, they can deposit a stablecoin and borrow ETH, which is then used to generate yield elsewhere; or vice-versa, using ETH as collateral to borrow stables. 
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Dolomite supports more adventurous assets including <a href="https://arbiscan.io/token/0x4277f8f2c384827b5273592ff7cebd9f2c1ac258" rel="noopener noreferrer nofollow">GLP</a>, the liquidity token on futures protocol GMX. Experienced DeFi users routinely repeat the deposit-borrow process multiple times in a procedure known as looping. It’s a way to maximize available capital, effectively providing a form of leverage in that it grants access to greater borrowing power than would otherwise be available. 
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Users are compelled to “loop” the process in order to overcome the collateral limits that are in place on lending protocols; typically it’s not possible to borrow more than 80% of your total collateral. For users who are determined to max out their borrowing limit through looping, Zap saves several steps. The whole transaction can be completed in one go, saving time and reducing complexity. 
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This is a marked improvement over incumbent solutions. For instance, obtaining the maximum available leverage on GLP would normally require depositing the token into Dolomite as collateral, borrowing against it, withdrawing the borrowed asset, swapping it for more GLP and then repeating several times. The number of hops this involves, aside from being time-consuming, increases the risk of user error. Zap will prove its worth, not only in eliminating hops, but in reducing network fees; on more expensive chains such as Ethereum, looping is rendered prohibitive due to transaction costs. 
<h2 style="text-align: center;" id="strong-building-better-money-markets-strong">Building Better Money Markets</h2> 
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Composability – the ability to connect different DeFi “legos” to create new financial products – is one of the industry’s chief value propositions. This capability frees developers to create novel applications that combine the best bits of multiple protocols. With the rollout of Zap, set to go live on August 8, Dolomite has demonstrated that there’s still scope for improving upon the design of DeFi primitive such as lending platforms. 
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Should Zap prove a success, it’s likely that the feature will be emulated and integrated elsewhere, as typically happens with open source crypto software. More than $5 million is currently <a href="https://defillama.com/protocol/dolomite" rel="noopener noreferrer nofollow">locked into</a> Dolomite. Zap’s release should serve to further boost that number while extending the ease with which users can leverage their assets for greater capital efficiency.

Lending Protocol Dolomite Launches One-Click Collateral Transactions

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