Decentralized cryptocurrency lending company Dharma is now officially live and open for business, according to an official announcement from the company posted Monday. Based in San Francisco, the startup has been backed by Coinbase Ventures, Polychain, Green Visor, and others.
The platform matches lenders and borrowers on a peer-to-peer level using a system of smart contracts. Those who choose to lend out their crypto through the platform will reportedly receive a fixed rate of return, a factor that differentiates Dharma from other crypto lending companies. However, lenders’ coins Dharma will only earn interest when they are being lent to a borrower.
1/ Today, Dharma is officially open to the public.
Now, anyone can earn interest or take out a line of credit against their crypto from anywhere in the world. No bank account or identity check required.https://t.co/pyNzd87Qu3
— Dharma (@Dharma_HQ) April 8, 2019
So far, Ethereum and DAI are the only cryptocurrencies that can be borrowed or lent on the platform.
Brendan Forster, co-founder and COO of Dharma, explained in a press release that “we see the broader shift to blockchain-based financial services as the beginning of a much more efficient, programmable, and equitable financial system.”
Dharma CEO Nadav Hollander explained to CoinDesk that his platform is one of the only ways for the average crypto holder to earn interest on idle cryptocurrency without having extensive technical capabilities. “There are a handful ways to earn interest on your crypto in a non-custodial manner, pretty much all of those require a high degree of technical knowledge,” he said.
Hollander also said that unlike many crypto startups, Dharma chose “to go user-first rather than developer-first,” although “the underlying smart contract is still primarily open source.”
The platform, which is a bit like a crypto-version of LendingClub, has already been running a beta version of itself with 2500 users. As of Friday, $1.16 million had been borrowed across 1575 loans. Once a loan has been taken out, the decentralized system distributes the funds to the borrower within just 30 seconds.
Crypto Lending Companies Become More Popular
Cryptocurrency markets have seen a major boost over the last several weeks, but even before then, the cryptocurrency lending industry has been booming. Companies like SALT, ETHLend, and BlockFi have reported record profits in recent months, even in spite of low crypto prices earlier this year.
This is because their business model cuts two ways: they get customers who are trying to hold onto their coins for the long run and customers who are betting that prices will continue to fall.
FortuneZ reported last week that crypto lending company Nexo added Litecoin to its collateral options.