DeFi Upstart Dharma Brokers $ 6.4 Million in Cryptographic Loans During First 3 Weeks

Cryptographic lending platforms are booming as the holders of ethers seek to mitigate portfolio losses suffered during the 2018 bear market.

Among these decentralized finance applications (DeFi), San Francisco-based start-up Dharma Labs is emerging as one of the leaders in the industry, providing more than $ 6.4 million in encrypted loans since its launch. Loan platform between individuals April 8.

In comparison, the Dharma system has a value of more than $ 10 million of etheric in its system, while BlockFi, the historical supplier of the sector, has collected about $ 18 million worth of bitcoin and etheric deposits. in the last month.

Dharma Labs' chief operating officer, Brendan Foster, told CoinDesk that, based on the user accounts of the non-depository mobile app, about 650 people have up to present acted as a borrower or lender.

He added that these fixed-rate and relatively short-term borrowings allow borrowers to lock in the borrowing and borrow the fixed dollar to the US dollar, or vice versa, for 90 days, with lenders earning around 2.7%. interests.

These Dharma Loans become an essential part of the DAI ecosystem. Polychain Capital, which partly helps to guide the Maker Foundation which governs DAI by its voting power, also invests in Dharma Labs. Coinbase Ventures also helped fund Dharma's $ 7 million earlier this year.

The rising ICD fee also increases Dharma interest rates, Foster said. The two lending platforms are based on the same smart contract, most often badociated with MakerDAO, to determine the price feed that defines the liquidation rate of the guarantee. If the price of the ethereum falls too low, users on either platform may lose their deposits.

As such, the Dharma and Creator communities support one another for stability and opportunities for arbitration.

"While DAI is slipping under a dollar, trading at $ 0.97, people can actually buy DAI and lend on Dharma for 11% a year [interest] Max Bronstein, Business Development Manager at Dharma Labs, told CoinDesk.

He added:

"With the Dharma, we are really helping to push the [DAI] dollar price. We help create [demand] there and fill that gap. At present, DAI holders really have no way to earn interest. "

Indeed, Arianna Simpson, founder of Dharma Investor and Autonomous Partners, told CoinDesk that some borrowers use encrypted loans to "raise the level of their ETHs or refinance them. [loans] on Maker. "

Growth model

For the moment, Foster said that his start-up "subsidizes the market" to encourage growth, lenders "earning a little more than borrowers."

Although Dharma Labs is currently avoiding fees of all kinds, he said the business model ultimately badumes that modest fees will replace grants. "We're going to be very good at generating revenue," Bronstein told CoinDesk earlier this month. "A normal business, deriving revenue from a good software."

"They're becoming the easiest place to get a return on your crypto or borrow a cryptocurrency," Simpson said of the Dharma.

In the meantime, the goal of Dharma Labs is to support bitcoin and more stable dollars like PAX.

In addition, as the Dharma application uses a four-digit pbadword and PIN rather than complex encrypted wallet keys, Simpson explained that the startup offers easier integration into the ecosystem. crypto in the broad sense.

Dharma Loans can carry out transactions directly with any Ethereum self-depository portfolio, to send or receive money, rather than requiring direct integration with a specific portfolio like the application of MetaMask browser, owned by ConsenSys.

"Having a product that does not require you to use MetaMask and that works is really great," said Simpson, adding:

"They are really focused on how people interact with these products, so I think this is going to be a key factor in getting people into cryptography."

Image of the Dharma team with the kind permission of the company