Inverse Finance

About

Inverse Finance is a DAO-governed protocol centered on DOLA (a debt-backed stablecoin) and FiRM (a fixed-rate lending market). Through FiRM, users can borrow DOLA at predictable fixed costs of any duration by holding DOLA Borrowing Rights (DBR) tokens that stream over time, while depositors can earn yield by staking DOLA into sDOLA (an auto-compounding ERC-4626 vault), or by providing liquidity across multiple DEX pairs. The protocol also offers sINV for staking governance tokens, jrDOLA as a first-loss insurance tranche, and one-click leveraged looping against various collaterals without rehypothecating user deposits.

Where Does Yield Come From?

Where yield comes from

Yield in Inverse Finance starts with borrowers. When someone borrows DOLA (the protocol's stablecoin) through FiRM (the fixed-rate lending market), they need to hold DBR tokens — short for "DOLA Borrowing Rights." Think of DBR as a prepaid interest ticket: 1 DBR lets someone borrow 1 DOLA for about one year. As time passes, a borrower's DBR balance slowly drains away, block by block, based on how much they've borrowed.

Borrowers can get DBR in two ways: they can buy it on secondary markets (like the triDBR Curve pool), or they can buy freshly issued DBR from the protocol through a continuous Dutch auction (a xy=k automated market maker) that sells new DBR for DOLA. The DAO (the protocol's governing community) controls how fast new DBR gets issued, using that rate as a tool to manage how much people want to borrow.

Where the yield flows

The spent DBR — which is the protocol's actual revenue — flows to three places:

sDOLA (the DOLA Savings Account): DBR that's been set aside for sDOLA gets automatically converted into more DOLA by arbitrage bots watching the Dutch auction. This steadily increases the exchange rate between DOLA and sDOLA, so sDOLA holders see their balance grow automatically without doing anything.
INV stakers: People who stake INV (the governance token) receive DBR streamed to them block by block as real yield.
jrDOLA depositors: Those who provide first-loss insurance (covering bad debt if borrowers default) earn DBR rewards. The DAO sets a DBR budget for this, managed by a Treasury Working Group.

Extra ways to earn

Outside the core protocol, users can provide liquidity to DOLA stablecoin pairs on exchanges like Curve or Aerodrome, earning trading fees and possibly partner incentives. Advanced users can also do leveraged looping: deposit yield-bearing collateral into FiRM, borrow DOLA, swap that DOLA for more collateral, deposit again, and repeat — all in one click, without the protocol reusing your deposits elsewhere.

Key point: no inflation

The entire system is non-dilutive. sDOLA yield comes from real protocol revenue — borrowers actually spending their DBR — not from printing new tokens. There are no inflationary emissions propping things up.

What happens if a borrower runs out of DBR?

If a borrower's DBR runs dry, external bots can call forceReplenish, which tops up the DBR at a premium price and adds that cost to the borrower's debt. If that extra debt pushes the position past its allowed collateral limit, the position can get liquidated.

Persons

Nour Haridy
Founder / dev
0xMT
dev
Alien
dev
cryptoharry
treasury
Edo
risk
Karm
risk
Tabboz
dev

Audits

Audit / Date	Findings	Verdict
Sherlock14-11-2025	Critical0 High0 Medium0 Low0 Info0	Due to severe text corruption during PDF-to-Markdown conversion, no reliable severity counts or structured findings could be extracted; the raw audit document must be accessed directly to assess the contest results.
Sherlock16-10-2025	Critical0 High0 Medium0 Low0 Info0	The audit document was not available in a usable textual form due to PDF conversion issues, preventing a reliable assessment of protocol safety. No severity counts or findings could be confidently extracted from the corrupted content.
yAudit04-01-2024 - 07-01-2024	Critical0 High2 Medium0 Low5 Info4	The two critical-class High findings (inflation attack and sDola manipulability in lending markets) were both promptly addressed, and the lower-severity items were fixed or acknowledged, leaving the Dola Savings contracts in a materially safer state for deployment.
Nomoi17-04-2023 - 11-05-2023	Critical0 High2 Medium1 Low0 Info7	All critical-path security issues (reentrancy vectors, stale oracle checks, and access control gaps) were acknowledged and resolved by the team during the audit window, substantially de-risking the protocol; residual concerns relate to reliance on governance oversight for market/escrow additions rather than defense-in-depth safeguards like reentrancy guards.
Code4rena20-12-2022	Critical0 High0 Medium18 Low0 Info0	The audit identified no high-severity vulnerabilities, and all 18 medium-severity findings were either resolved by the Inverse Finance team or acknowledged as acceptable risks, suggesting the core FiRM lending protocol is reasonably robust with residual risks primarily around oracle manipulation and economic edge cases.
DeFiMoon23-09-2022	Critical0 High0 Medium4 Low1 Info3	The audit found a severe calculation defect (DFM-1) in core withdrawal logic and several code quality issues, leading to a "Not Passed" verdict — the contracts are not ready for production without remediation.

Legal

Legal form

Decentralized Autonomous Organization (DAO)

Status and notes

Inverse Finance is a decentralized, open-source protocol organized as a DAO (Decentralized Autonomous Organization) driven by INV token holders. Originally founded by Nour Haridy in late 2020. The protocol's disclaimer states it "is not affiliated with any central authority or organization." No incorporated entity (foundation/LLC/association) or registration jurisdiction is disclosed anywhere on the official site, docs, or footer. Terms and privacy pages at /terms and /privacy return 404.