> For the complete documentation index, see [llms.txt](https://docs.dolomite.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.dolomite.io/dolomite-governance/past-governance/dip-01-instant-odolo-exit.md).

# DIP-01: Instant oDOLO Exit

{% hint style="danger" %}

* **Outcome:** Did not pass
* **Vote date:** December 3, 2025
* **Official vote:** [BeraVote](https://app.beravote.com/space/dolomite/proposal/QmT6NUXQbXtNxDnVtLYxaAzCN6A8LY7A7gvnBYF7pcahRc)
* **Final vote totals:** 1.78M veDOLO for; 2.49M against; 477.06K abstain
* **Implementation status:** Not implemented
* **Original discussion:** [Dolomite Governance Forum](https://discord.com/channels/945099853929795607/1409560838724915261)
* **Current documentation:** [Token Mechanics](/dolo/token-mechanics.md)
  {% endhint %}

The proposal text below is preserved exactly as presented for the governance vote. Only the status summary above is updated over time.

***

## Title

`[DIP-01] Enable Instant Exit Option for oDOLO → DOLO via Kodiak DEX`

## Author(s)

Dolomite Team

## Date

2025-08-25

## Related Discussions

None

## Simple Summary

This proposal introduces an instant exit option for oDOLO holders, allowing them to trade oDOLO directly for DOLO on Kodiak DEX without undergoing the current pairing and lockup process. The liquidity for this market will be seeded by the protocol using DOLO accumulated from early veDOLO unlock penalties.

## Abstract

Currently, oDOLO holders must go through a multi-step process — pairing with DOLO they already hold, completing a one-week pairing period, selecting a lockup duration, and paying stablecoins — before receiving their DOLO. This design is optimized for long-term alignment but offers no immediate liquidity path for oDOLO.

The proposed change adds an optional market-based instant exit, where oDOLO can be swapped directly for DOLO on a Kodiak DEX pool. This pool will be initially seeded with DOLO from the protocol’s treasury, sourced from penalties paid by users who break veDOLO locks early.

This option will not replace the existing pairing and lockup process — it will simply provide an alternative for users seeking faster liquidity at market-driven rates.

## Motivation & Background

**Why is this proposal being made?**

* Some users prefer immediate liquidity over maximizing returns via the lockup process.
* oDOLO is currently illiquid outside Dolomite’s internal mechanics.
* An instant exit pool can serve as a price discovery mechanism for oDOLO.
* Buyers on the other side of the trade can acquire oDOLO at a discount, incentivizing activity in Dolomite tokenomics.

**Why now?**

* The protocol has accumulated a treasury of DOLO from veDOLO early unlock penalties.
* The market is mature enough to support a secondary oDOLO market without undermining long-term alignment incentives.
* This has been a feature desired by the community

## Proposal Type — Tokenomics Change

**Scope of Change:**

* Liquidity management: Create and seed an oDOLO–DOLO pool on Kodiak DEX.
* Redemption mechanics: Introduce a market-based redemption path for oDOLO.

## Specification

* **Tokens Involved:**
  * DOLO — `0x0F81001eF0A83ecCE5ccebf63EB302c70a39a654` (Berachain)
  * oDOLO — `0x02E513b5B54eE216Bf836ceb471507488fC89543` (Berachain)
* **Mechanism Description:**
  * Protocol seeds a Kodiak DEX oDOLO/DOLO pool with single-sided DOLO liquidity sourced from early veDOLO unlock penalties.
  * Users may swap oDOLO → DOLO at any time at the prevailing market rate.
  * Liquidity may be topped up periodically as new penalty DOLO enters the treasury.
* **Initial Exchange Rate:** \~0.05 DOLO per oDOLO
* **Integration Points:** No smart contract changes; frontend will simply provide a link to the pool on Kodiak DEX.
* **Operational Requirements:** DAO-controlled multisig to deposit initial liquidity and manage top-ups.
* **Third-Party Dependencies:** Kodiak DEX liquidity pool mechanics.
* **Parameters:**
  * Initial liquidity size: TBD based on available DOLO
  * Update cadence for liquidity top-ups: e.g., monthly or as balances allow

## Economic & Market Impact

* **Liquidity:** Introduces a permanent liquidity source for oDOLO, enabling faster conversions and price discovery.
* **Price Stability:** Market-driven pricing may trade at a discount to the theoretical pairing/lockup value, providing a natural arbitrage opportunity.
* **Circulating Supply:** Could slightly increase short-term DOLO circulation if oDOLO holders choose instant exit over lockup.
* **Protocol Revenue:** No direct revenue change; indirect benefits from increased participation in executing conversions from oDOLO to discounted veDOLO. Possible decrease in revenue if it results in less oDOLO being utilized for discounted veDOLO purchases.
* **Incentive Alignment:** Users prioritizing long-term alignment can still use the existing lockup process, while others can opt for instant liquidity. Users particularly interested in DOLO will have a venue where they can purchase oDOLO.

## Risks & Considerations

* **Sell Pressure:** Large instant exits could briefly increase DOLO sell pressure.
* **Liquidity Drain:** If demand for instant exit is high and buy-side liquidity is low, the pool could be depleted quickly.
* **Price Volatility:** Market rate for oDOLO may diverge significantly from lockup value, impacting perception.

## Implementation Plan

* **Timeline:**
  * Week 1: After approval, pool will be seeded and frontend updated
* **Deployment Steps:**
  1. Confirm pool parameters and initial rate
  2. Seed DOLO liquidity from treasury penalties
  3. Verify pool on Kodiak
  4. Update Dolomite app with link
* **Responsible Parties:** Dolomite core team, DAO multisig signers
* **Required Approvals:** Single governance vote

## Success Criteria & Metrics

* % of oDOLO supply using instant exit option within first 3 months
* Liquidity depth and trading volume of oDOLO/DOLO pool
* Number of unique buyers acquiring oDOLO from the pool
* Stability of pool exchange rate over time

## Additional Information & References

* [Dolomite DOLO Mechanics Documentation](https://docs.dolomite.io/dolo/token-mechanics#tab-odolo)
* [Kodiak DEX](https://app.kodiak.finance/#/swap?chain=berachain_mainnet)