Zap
A Dolomite feature for user ease and Borrow Position flexability.
Last updated
A Dolomite feature for user ease and Borrow Position flexability.
Last updated
The Zap feature is a versatile tool allowing users to swap between assets on Dolomite using DEX aggregators (i.e. Paraswap or Odos) and direct protocol integrations, all within a user's Dolomite Balance or Borrow Position. This means users no longer need to swap assets before depositing onto Dolomite, all while obtaining the best price on the market.
Because of Dolomite's combination of protocol integrations and integrations with DEX aggregators, users can even swap into assets not available on exchanges, such as GLP.
Beyond simply trading assets within Dolomite, Zap is also uniquely integrated within Borrow Positions to provide users with a wide range of Zap options to build their ideal Borrow Position, or internally change it with one-click.
At a glance, here are the general possibilities Zap provides:
On Dolomite–
Zap panel to trade assets from your Dolomite Balance
Trade an asset to a different asset to open a Borrow Position
Within Borrow Positions–
Borrow one asset, then have it traded to another asset and added as collateral, all within the same transaction (i.e. Looping or hedging)
Repay your loan using your collateral
Deposit collateral in the form of an asset you don’t hold
Withdraw collateral to a different asset
Swap one collateral asset into another
Swap one debt asset into another
The following sections will provide a higher level of detail on each of the Zap types.
The Zap Swap Panel simply swaps one asset to another within your Dolomite Balance. The main use of this tool is a swapping mechanism between any of the Dolomite integrated assets. This means you can increase your exposure to any of those assets, while also taking advantage of Dolomite's APR (derived from Supply APR or Incentives), along with any inherent APR an asset may have.
Zapping makes it easier to acquire assets that would have otherwise required you to withdraw and go to another project's dApp, and thanks to the routing that is performed by DEX aggregators, you can swap into project-specific assets using otherwise unsupported assets (such as swapping ARB into GLP, when usually one would have to first acquire one of the component assets of GLP).
This Zap option lets you trade an asset in your Dolomite Balance to another asset before opening a Borrow Position with it as collateral. Of course, the action is similar to using the Zap Swap Panel then opening a Borrow Position with your desired asset, however the main purpose of Zap To Open is user ease. The following section will provide you with the Location of this option, along with the steps to execute Zap To Open.
To find Zap to Open / Trade Before Adding, navigate to the Borrow Page, locate the "⊕ Open New Borrow Position" panel, then click "⚡ Zap - Trade before adding." Once you see two sides of the Zap trade appear, you can select your desired assets for the trade. The top input box is the asset from your Dolomite Balance that you will trade for your future collateral in the position. Change this asset using the asset selector to the right of the input box. You can use the Max button above the asset selector to add all of that asset from your Balance into the Zap trade.
The second box is the amount of the asset that will be traded to, then added to the new Borrow Position as collateral. Similar to the input box above, you can change the asset that will be collateral via the asset selector to the right of the second box.
Take a moment to review the Zap To Open / Trade Before Adding. Hovering over the ? icons will provide information on each of the components of this Zap. When you believe everything is correct, click the green "⚡ ZAP" button to begin executing the necessary transactions to complete the Zap trade and open the borrow position.
The steps to execute a Zap trade, as demonstrated in the image above, will look different depending on the asset. After the Zap is completed successfully, you should see a new Borrow Position at the top of your Borrow Position stack, with your desired asset as collateral.
As Zap trades require multiple steps to execute on the blockchain, the transaction costs will be greater than simply opening a borrow position using assets you already hold.
Similar to Zap To Open, this Zap option will take an applicable asset from your Dolomite Balance, convert it to the desired asset, then add that desired asset as collateral within the Borrow Position.
Borrow Page → Borrow Position -> Add
Navigate to this Zap option within a Borrow Position by clicking the Add tab. Next, click on the "⚡ Zap - Trade before adding" checkbox below the input box. Once you see two sides of the Zap trade appear, you can select your desired assets for the trade. The top input box is the asset from your Dolomite Balance, and the bottom input box is the asset you want to add as collateral to your Borrow Position. Change these assets using the asset selector to the right of the input boxes. You can use the Max button above the asset selector to add all of that asset from your Balance into the Zap trade.
Hovering over the ? icons will provide information on each of the components of this Zap. You can observe the future changes of your Dolomite Balance above the first input box, and the changes in the Borrow Position's collateral above the second input box. When you believe everything is correct, click the green "⚡ ZAP" button to begin executing the necessary transactions to complete the Zap trade. After successful transactions, you should see the collateral added to the top left of the Borrow Position.
As Zap trades require multiple steps to execute on the blockchain, the transaction costs will be greater than simply adding collateral using an asset you already hold.
“Zap - Trade and Deposit as Collateral” is a perfect tool if you want to increase your exposure to an asset or perhaps employ a strategy such as looping or hedging.
Borrow Page → Borrow Position -> Borrow
Find this Zap option within an open Borrow Position by clicking the Borrow tab. Next, click on the "⚡ Zap - Trade and deposit as collateral" checkbox below the input box. Once you see two sides of the Zap trade appear, you can select your desired assets for the trade using the asset selector to the right of the input boxes. In this Zap trade, the top input box is what you will be borrowing, while the bottom input box is what will be added as collateral within the Borrow Position.
For the "Trade and deposit as collateral" Zap option, since the borrow, trade, and add as collateral steps are done in one step, it is possible to borrow more than the value available from your collateral within the Borrow Position. Before you execute the Zap, make sure to take note of the future changes the Zap will have on your Position, such as changes in collateral, debt, and Health Factor. These changes can be easily noted under the second input box, and the Position Health in the top right of the section, respectively. When you believe everything is correct, click the green "⚡ ZAP" button to begin executing the necessary transactions to complete the Zap trade.
As Zap trades require multiple steps to execute on the blockchain, the transaction costs will be greater than simply borrowing an asset.
After successful transactions, you should see an increase in collateral, an increase in debt, and perhaps changes in your Positions Health value.
This Zap option enables users to use a Borrow Position's collateral to pay debt within the Borrow Position, removing the need to pay off a position's debt only from your Dolomite Balance. This option increases the flexibility a user has in terms of position size along with user ease.
Borrow Page → Borrow Position -> Repay
Find this Zap option within a Borrow Position by clicking the Repay tab. Next, click on the "⚡ Zap - Use collateral to repay" checkbox below the input box. Once you see two sides of the Zap trade appear, you can select your desired assets for the trade using the asset selector to the right of the input boxes. In this Zap trade, the top input box is what Borrow Position collateral asset you will be using to repay, while the bottom input box is what Borrow Position debt that you will repay. If there is only one asset as collateral and one as debt within the Borrow Position, the assets selected will already be reflected in the Zap. You can use the Max button above the asset selector to add all of the collateral to repay the debt. Excess collateral used to repay debt will be added to the Borrow Position as collateral after the Zap trade.
Because of possible fluctuations in price in the time it takes for a zap to be processed, it's recommended that at the very least you make sure you're using enough collateral that the "Minimum Received" (shown in the zap details at the bottom) is enough to pay off the amount of debt you would like to repay.
Under the bottom input box, you can find exactly what the Zap trade will do. Once you are done reviewing your Zap, click the green "⚡ ZAP" button to begin executing the necessary transactions to complete the Zap trade. After successful transactions, you should see less debt and less collateral within your Borrow Position.
As Zap trades require multiple steps to execute on the blockchain, the transaction costs will be greater than simply repaying using assets from your Dolomite Balance.
Under normal operation, repaying your debt fully likely overpays your debt. If you Zap all your collateral to repay your debt, you'll have extra left over after the debt is paid, and even if you aim to repay the debt exactly, there will likely be some dust left over. The result is that any extra of an asset that is left over after the debt is repaid is added as collateral to your borrow position.
For example, if you have 100 DAI of debt and you aim to use Zap to swap just enough to pay off the debt, the Zap that happens when you repay may result in you getting 101.2 DAI for your traded collateral. 100 of that DAI would go towards repaying your 100 DAI in debt, but the other 1.2 DAI from your Zap isn't lost, it remains in the borrow position, just added as collateral. So you'll see 1.2 DAI in collateral in your borrow position along with any remaining collateral not used to pay off your debt.
The trouble arises when your debt asset is at its supply cap. That extra can't be added to your borrow position as collateral, because that would increase the total supply of that asset on Dolomite, which can't happen when an asset is at its cap.
The solution is to repay with an amount that falls just short of your debt. To do this, look at the output of the Zap when zapping to repay (the bottom field), and ensure that it's slightly less than the amount of your debt. You can see an example below:
Here you can see that the position debt is 4.982 USDC, and the amount in the output of the zap is 4.948815. This will ensure that there is no excess USDC that gets added as collateral.
When the asset is no longer at its supply cap on Dolomite you'll be able to repay the remaining amount, but in the meantime you'll have freed up the large majority of your assets from the borrow position.
Similar to Zap Trade and Deposit as Collateral, "Zap - Trade after Removing" provides a simple and compact way to remove collateral from a Borrow Position and trade it to your desired asset, before moving it to your Dolomite Balance.
Borrow Page → Borrow Position -> Remove
Locate this Zap option within a Borrow Position by clicking the Remove tab. Next, click on the "⚡ Zap - Trade after removing" checkbox below the input box. Once you see two sides of the Zap trade appear, you can select your desired assets for the trade using the asset selector to the right of the input boxes. The top input box is the Borrow Position collateral you wish to remove, while the bottom input box is the asset you will trade to, then move to your Dolomite Balance. You can use the Max button above the asset selector to auto-populate the input box with the the entire amount of that collateral asset within the Borrow Position. If it is the only asset as collateral, the Max button will close the Borrow Position after completion.
Under the bottom input box, you can find exactly what the Zap trade will do. Once you are done reviewing your Zap, click the green "⚡ ZAP" button to begin executing the necessary transactions to complete the Zap trade. After successful transactions, you should see less collateral within your Borrow Position and more of your desired asset in your Dolomite Balance. If you removed all of the collateral from the Borrow Position, the Borrow Position will close and disappear.
As Zap trades require multiple steps to execute on the blockchain, the transaction costs will be greater than simply withdrawing the asset to your Dolomite Balance.
The "Zap - Trade into different Collateral" option allows users to seamlessly trade one collateral asset to another asset, and keep it as collateral, even while actively borrowing against that collateral, regardless of how complicated the Borrow Position may be. The following section will provide you with the location and a guide for using this feature.
Borrow Page → Borrow Position -> Swap (collateral side)
Locate this Zap option within a Borrow Position by clicking the Swap tab (on the collateral side of the Borrow Position). The Zap option will already be selected by default. The top input box is the Borrow Position collateral you wish to swap from, while the bottom input box is the asset you will swap to then add as collateral. You can select your desired assets for the swap using the asset selector to the right of the input boxes. You can use the Max button above the asset selector to auto-populate the input box with the the entire amount of that collateral asset within the Borrow Position.
Under the bottom input box, you can find exactly what the Zap trade will do. Take note of the difference in Position Health shown in the top right of the section, if there is any. Some assets may have different liquidation thresholds, and as a result changing collateral can cause a change in health factor, although this is not the case if both assets have the same liquidation threshold.
Once you are done reviewing your Zap, click the green "⚡ ZAP" button to begin executing the necessary transactions to complete the Zap trade. After successful transactions, you should see the same value amount of collateral within your Borrow Position, a change in collateral asset(s), and perhaps a change in Position Health.
When you are swapping collateral between assets with different Liquidation Thresholds, the Position Health will change after the swap to reflect this. Some swaps may not be possible due to the outcome of the swap possibly leaving the Position with a Health Factor under 1.
As Zap trades require multiple steps to execute on the blockchain, the transaction costs will be greater than simply adding or removing collateral.
Similar to "Zap - Trade into different Collateral," the "Zap - Borrow, swap, and repay debt" essentially swaps between borrowed assets. It first borrows your desired asset, swaps it to an asset that is currently being borrowed, and repays that debt.
Borrow Page → Borrow Position -> Swap (borrow side)
Locate this Zap option within a Borrow Position by clicking the Swap tab (the borrow side of the Borrow Position). The Zap option will already be selected by default. The top input box is the asset you wish to borrow, while the bottom input box is a borrowed asset you will swap to, then pay the debt for. You can select the asset you want as debt using the asset selector to the right of the top input box.
Currently you cannot pay an exact amount relative to your current debt of a different asset, meaning there is a range of amounts in the top input box that will change the future position. Here are the possibilities:
New Debt Amount < Current Debt Amount:
– In this case, where the value of the top input box is less than the debt that will be paid off, the debt of the asset in the top input box will increase, while the debt being paid off will decrease. This means that after the Zap trade is completed, there should be less of the previous debt, and more of the new asset debt in the Borrow Position.
– In terms of the Position Health, the Health should be the same as prior to the Zap if the Liquidation Thresholds match between asset debts, but if not, the Position Health will increase or decrease in relation after the Zap is competed. This will be previewed in the top right of the Zap trade.
New Debt Amount > Current Debt Amount:
– In this case, where the value of the top input box is greater than the debt that will be paid off, the debt of the asset in the top input box will be added as debt to the Borrow Position, while the debt being paid off will be completely paid off and removed as a debt within the Borrow Position. The excess of the trade to pay off the previous debt will be added as collateral within the position.
– In terms of the Position Health, the Health will generally be less than prior to the Zap, and Liquidation Threshold of both assets are factored in.
New Debt Amount = Current Debt Amount:
– If the value of the top input box value matches the debt that will be paid off exactly, the new asset debt will replace the old asset debt, retaining the same value. Essentially, the assets are swapped, similar to "Zap - Trade into Different Collateral," but with debt instead.
– In terms of the Position Health, the Health should be the same as prior to the Zap if the Liquidation Thresholds match between asset debts, but if not, the Position Health will increase or decrease in relation after the Zap is competed. This will be previewed in the top right of the Zap trade.
– Currently, paying off the exact amount of debt within a position with this Zap method has to be done manually (i.e. enter in the exact value amount equal to the debt in the top input box), however there are plans for this to be automated in the future.
Once you are done reviewing your Zap, click the green "⚡ ZAP" button to begin executing the necessary transactions to complete the Zap trade. After successful transactions, you should see the correlated changes mentioned above depending on the New Debt Amount versus the Current Debt Amount.
As Zap trades require multiple steps to execute on the blockchain, the transaction costs will be greater than your typical transaction on Dolomite.
