Dharma Labs is building tools for blockchain lending. Its first entry, Dharma Lever, is currently in alpha testing and allows loans for cryptocurrency traders and those crypto holders who have large wallets. The San Francisco-based company is finding a successful niche for its products and has now completed a Series A funding round that saw it receive $7 million in capital from companies such as Coinbase Ventures, Polychain Capital and Ripple’s Xpring fund.
The investment money will be used to help the company innovate its products further. Nadav Hollander, Dharma’s CEO, said in a statement, “In the same way that Uber made it both easy and cheap to get a ride from anywhere in the world, we believe Dharma Lever will make accessing margin lending easy and cheap for anyone in the world.”
Peer-to-peer crypto lending platforms already exist, but Dharma states that it can offer several enhancements over existing solutions. It asserts that it will offer better loan rates and that all loans will be governed by decentralized smart contracts, meaning they can be made trustlessly. Additionally, Dharma Lever works directly from a crypto wallet without requiring a special extension.
Max Bronstein, the head of marketing for Dharma, told The Block crypto media outlet, “Lever is the smart-contract alternative to [crypto lending platform] Genesis. It is an easy to use software tool for anyone looking to borrow crypto-assets.” He adds, “It will be open to everyone and the design is very simple, similar to Coinbase (NASDAQ: COIN). We are trying to reduce friction. When a person lends Genesis crypto, the lender doesn’t know what the firm is doing with it. And you are at the mercy of Genesis to decide what rate they are going to give you.”
Decentralized crypto lending platforms haven’t gained the footing that many anticipated. This is partly due to the lack of regulation, which is keeping many investors and traders away, as well as the absence of Know Your Customer policies. This is preventing many lenders from adding liquidity to the platforms, since they want to know that all parties in a transaction have already been vetted.
There are already 400 firms waiting in line to use Dharma Lever, according to Bronstein. However, he acknowledges that the company’s goal is bigger than just lending. He states, “Our kind of end vision is to have this global, transparent, pool of credit liquidity. That’s a ten to twenty year vision.”
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