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Author: Admin | 2025-04-27
What is Dharma?San Francisco-based Dharma Labs is a peer-to-peer crypto lending platform built on Ethereum. Dharma serves the market for short-term (90-day) fixed-rate loans. Users can lend and borrow in ETH and DAI, a decentralized stablecoin built on Ethereum. Lenders can earn interest on the crypto they supply.Dharma plans to introduce more cryptocurrencies in the future. The company does not take custody of cryptocurrencies — it simply helps match lenders with borrowers.A relative newcomer to the decentralized finance space, Dharma launched in April 2019. According to Dharmalytics, Dharma has already brokered over $10 million in crypto loans to date across over 2,900 unique loans.Dharma does not have a native token and raised $7 million in investment from Green Visor, Coinbase Ventures and Polychain, among others.How Does Dharma Work?Dharma has pivoted significantly since its early days. It was initially meant to be a platform where third parties could underwrite loans and help identify borrowers. Now, it operates more as a peer-to-peer lending service that matches borrowers and lenders while acting as the sole underwriter for loans. However, the user experience — for lenders and borrowers — is mostly unchanged.Borrowing and LendingUsers can currently borrow and lend ETH and DAI, though Dharma may support USDC and Bitcoin in the future. Since there is greater demand to lend crypto, borrowers are matched with lenders fairly quickly.Once matched, borrowers can receive their loan in less than 30 seconds, which illustrates the speed benefits of decentralized finance compared to traditional lending institutions such as banks. Funds for borrowing or lending can be transferred from any crypto wallet, including Coinbase.As of now, Dharma only supports fixed-term and fixed-interest loans. All loans have 90-day durations with a fixed rate of interest. In the future, Dharma plans to provide more flexibility over loan terms.A key differentiator for Dharma is that it offers fixed interest rates for lenders and borrowers unlike other crypto lending platforms such as Compound, BlockFi, or Celsius Network. Fixed rates offer lenders predictability and stability, and make sense given the relatively short loan duration of 90 days.A key point to note is that borrowers have
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