> 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-03-borrow-fee-rebates.md). # DIP-03: Borrow Fee Rebates {% hint style="success" %} * **Outcome:** Passed * **Vote date:** December 3, 2025 * **Official vote:** [BeraVote](https://app.beravote.com/space/dolomite/proposal/Qmf8g1bSXTnF1fxzxbstNRvyVvB7BqNKonnCzE19cy3dn9) * **Final vote totals:** 4.89M veDOLO for; 179.43 against; 0 abstain * **Implementation status:** Implemented June 23, 2026 * **Original discussion:** [Dolomite Governance Forum](https://discord.com/channels/945099853929795607/1424817056007721024) * **Current documentation:** [Borrow Fee Rebates](/dolo/borrow-fee-rebates.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-03] Implement Discounted Borrowing for veDOLO Holders ## Author(s) Dolomite Team ## Date 2025-09-05 ## Related Discussions None ## Simple Summary This proposal introduces a borrow fee rebate mechanism for veDOLO holders. This would redirect up to the full amount the borrower pays towards the reserve factor (generally 10% of total borrow interest paid) back to eligible users as a rebate. Eligibility depends on the user’s veDOLO voting power, which (represented as an equivalent amount of DOLO) must be worth at least 5x the annualized rebate value. ## Abstract The proposed change enhances veDOLO utility by granting discounted borrowing to aligned users. Borrowers who hold sufficient veDOLO voting power will be able to claim rebates of up to 10% of their borrow interest costs, redeemed in the same asset they paid as interest. The system creates a direct incentive for borrowers to accumulate and lock DOLO, as well as utilize oDOLO, providing value to veDOLO holders as well as driving utilization of Dolomite. This strengthens Dolomite’s competitive positioning among lending protocols, drives growth in the core usage of Dolomite, while rewarding long-term aligned participants. ## Motivation & Background * Borrow rates are a key competitive factor for attracting users, and enabling higher levels of looping that is core to Dolomite. * Reducing borrowing rates makes performing loops more attractive, driving further usage of Dolomite, increasing TVL, paying more interest to suppliers, and resulting in higher yield for loopers. * By tying this benefit to veDOLO holders, Dolomite aligns utility with governance, putting rewards in the hands of those both bringing real usage to Dolomite *and* who are long-term aligned. * This structure deepens the incentive to lock DOLO as well as utilize oDOLO, as veDOLO becomes a tangible way to reduce borrowing costs and increase value in looping. ## Why now? * With Dolomite tokenomics live, it’s important to continue to provide value to veDOLO holders in a way that drives growth. * The current market is one that facilitates a wide range of looping opportunities, making this benefit incredibly valuable, especially when paired with Dolomite’s e-mode. * It’s important to create value for oDOLO and veDOLO holders to encourage continued usage. ## Effects * **User Experience & Incentives:** Borrowers who hold veDOLO enjoy lower net borrow costs, driving stronger alignment and improving their borrowing and looping experience. * **Liquidity Depth & Stability:** Lower borrowing costs attract more demand, indirectly encouraging deeper supply markets through higher yield. * **Tokenomics:** Increased demand for DOLO lockups to qualify for rebates, especially among heavier users of Dolomite and users with larger positions. This can drive DOLO accumulation for the purpose of locking, as well as utilization of oDOLO, which would now provide a benefit during its locking period. * **Revenue Impact:** Treasury revenues decrease slightly, but with the targeted goal of being offset by growth in borrow activity and TVL. ## Scope of Change: * Borrow rates: Borrow rates reflect a discount based on the current voting power (veDOLO) held by the user. * Mechanics: Claiming of a portion of borrow interest paid, up to 10% of the amount paid, based on holding 5x that value in voting power. * Fee allocations: Redirects up to half of the reserve factor from the treasury into rebates for qualified users. * Token utility: Expanded use case for veDOLO, and as a result also oDOLO and DOLO ## Specification * **Tokens Involved** * DOLO - `0x0F81001eF0A83ecCE5ccebf63EB302c70a39a654` * veDOLO voting power * Voting power is derived from the amount of DOLO in the lock and the amount of time remaining on the lock, with the full value of the DOLO reflected in voting power when the lock has the full 2 years remaining, declining to 0 as the lock approaches maturity. Viewable on the veDOLO page of the Dolomite web app. * Borrowed assets - any supported borrowable asset, paid back to qualified borrowers * **Mechanism Description:** * Borrowers pay interest as usual, suppliers receive interest as usual. * Half of the reserve factor of the interest paid by borrowers (10% of the total interest) is potentially claimable by borrowers who qualify for it * Borrower can view the amount they're qualified to claim on the veDOLO page * Eligibility is based on the total voting power held by the user * Borrower needs to hold 5x the value of the annualized rebate in order to claim the full rebate, scaled down in kind if less than that value is held * Example: A borrower pays $200 in USDC interest over the course of a week. Annualized over 52 weeks, that's $10,400. 10% of that interest paid ($20 for the week, $1,040 for the year) would normally go to the reserve factor. If the borrower holds at least $5,200 of voting power (calculated as voting power amount times the price of DOLO), they can claim that $20 back as a rebate for the week. * Minimum of $1 of rebate necessary for claiming * **Integration Points** * veDOLO contract * Borrow accounting modules * Frontend updates to reflect the effective rate, as well as eligibility * **Operational Requirements** * Smart contract updates for rebate tracking and claim logic * Frontend UI changes to reflect the new rate, eligibility, and claiming * **Third-Party Dependencies** * Oracle for DOLO price feed to calculate value of voting power * **Parameters** * Rebate cap: 10% of borrow interest paid * Eligibility: 5x annualized rebate value in veDOLO voting power ## Economic & Market Impact * **Liquidity:** Increased demand for borrowing due to lower effective rates, increased supply liquidity as lending rates increase due to higher utilization * **Token Stability:** Potential increased locking as a result of the program result in greater stability in the long run. * **Tokenomics Utilization:** More DOLO locked in veDOLO, more utilization of oDOLO as a result of increased value of holding a veDOLO lock. * **Revenue:** Small decrease in reserves (up to 10% of borrower-side fees redirected at utilization by all users, very likely much lower), ideally offset by higher borrow demand and greater supply utilization. * **Stakeholder Alignment:** veDOLO holders benefit from increased utility; borrowers benefit from reduced costs by participating on DOLO tokenomics. ## Risks & Considerations * **Smart Contract Risk:** Requires new logic for tracking and claiming rebates; mitigated by an external audit of changes. * **Gaming Risk:** Users may attempt to temporarily accumulate veDOLO for rebate claims; mitigated by lockup mechanics that result in penalties for breaking early. * **Revenue Reduction:** Protocol reserves may grow slower; ideally mitigated through increased borrowing activity, increased supply utilization, and increased TVL. * **Complexity:** Users need clear UI to understand rebate eligibility and requirements; mitigated through guides and education, and ideally driven by a desire to receive the benefit.