DOLA

DOLA is a stablecoin governed by Inverse Finance DAO and intended to be pegged to the US dollar. It is issued on Ethereum and, via bridges, also circulates on networks such as Arbitrum, Base, Optimism and BNB Chain. DOLA is described as a debt-backed stablecoin: circulating DOLA is backed by loans made to borrowers and supported by crypto collateral.

In Inverse Finance's lending market called FiRM, users can deposit collateral and borrow DOLA at a fixed rate. The fixed rate is provided through a separate token called DBR (DOLA Borrowing Rights): the borrower holds DBR, which represents the right to borrow a certain amount of DOLA for a certain period, and this right is consumed over time. The protocol also tries to maintain the peg by expanding and contracting DOLA supply into specific markets through contracts called Fed; liquidity pools on platforms such as Curve also play a role in sustaining parity.

The risk of DOLA moving away from its dollar value depends on the value of the collateral assets, how liquidation mechanisms work in stressed market conditions, the depth of liquidity pools and smart contract security; the protocol has suffered exploits related to oracle manipulation in the past. The Lzzo.com page shows DefiLlama's US dollar reference price for DOLA, and the chart uses the same source's historical series.