Summary
Ketju does not approve Dolomite at the protocol level: a USDC lender's deposit sits in one shared ledger used for lending, internal trading, margin and outside wrappers, and governance can change the risks without the usual delay. Ketju will review a named USDC or USDT market on one chain if it can show that its borrowers and liquidation routes avoid the exotic integrations. Dolomite documents six audit firms across its inherited core and its active modules, and reports 100% line, statement and branch coverage. The same page warns that module audit scopes differ as integrations change. The core accounting layer is generally immutable, while mutable modules wrap outside assets and strategies. Governance and operators can list assets, change risk parameters, approve global operators and use specified emergency functions without the ordinary timelock. We found no bad-debt event in the current protocol. On 2024-03-20, though, an attacker exploited a retired 2019 Loopring-era contract with stale user approvals for about $1.8M; 90% was recovered and the treasury repaid the rest. On 2026-08-14 DefiLlama reported about $187.4M of TVL across chains and $304.8M of borrowed value, a gap we have not reconciled to Dolomite's virtual-liquidity ledger.
Review triggers
- Any bad debt larger than the safety buffer
- Virtual liquidity lets a DEX failure reach lending depositors
- New collateral listings that cannot be partially liquidated
Facts
- Verdict
- Not approved
- Type
- Dollar lending
- Chains examined
- Arbitrum, Ethereum
- Instruments
- USDC, USDT, WETH
- Reviewed
- Last confirmed