Dharma — a peer-to-peer cryptographic platform, built on Ethereum. Dharma serves the market for short-term (90-day) fixed rate loans. Users can borrow in ETH and DAI, a decentralized stablecoin, built on Ethereum. Lenders can earn interest on the crypto they supply.
Contents:
- Brief description of the blockchain project Dharma
- How does the Ethereum platform work?
- The future of dapp
- Additional information
Brief description of the blockchain project Dharma
It is the world's first crypto bank. Using Dharma, you can deposit and withdraw stablecoins, cryptocurrencies, pegged to the amount of $ 1 USD, any time of the day or night and receive interest instantly. According to Dharmalytics, Dharma has already provided over $ 10 million in crypto loans to date for over 2,900 unique loans.
Users can currently borrow and lend ETH and DAI, although Dharma will support USDC and Bitcoin in the future. Since there is an increased demand for cryptocurrency, borrowers are approaching lenders rather quickly.
How does the Ethereum platform work?
Once matched, borrowers can get their loan in less than 30 seconds. Borrowing or lending funds can be transferred from any crypto wallet, including Coinbase. At the moment, Dharma only supports loans with a fixed term and a fixed interest rate. All credits are valid for 90 days. In the future, Dharma plans to provide more flexibility, regarding the terms of the loan.
Dharma's key differentiator is that it offers fixed interest rates to lenders and borrowers unlike other crypto lending platforms such as:
- Compound;
- BlockFi;
- Celsius Network.
The key point to note - borrowers must pay interest on the loan for the full 90 days of the loan, even if they repay the loan early.
Other features:
| Collateral requirements and risks | Borrowers are currently required to post collateral in DAI or ETH, equal to 150% of the loan principal. This collateral can be liquidated in the event of default or when the value of the collateral falls to 125% of the loan principal. |
| User interface and experience | The user interface looks convenient, the lending process is fast enough. Everything is simple and straightforward on the platform. |
Borrowers should be aware of the risk of price volatility. If the price of a token, pledged as collateral, suddenly falls, the borrower may face a margin call or even default on the loan.
The future of dapp
Project currently oversees factors such as margin requirements, liquidity reserves, interest rates and general administration of the platform. However, Dharma unveiled plans to introduce a governance system, similar to MakerDAO that could make Dharma more decentralized.
Project is trying to attract more borrowers by promoting new leveraged options and partnering with other companies. For example, Dharma works with hedge funds. It also predicts that large ICO startups with significant ETH balances may have employees, willing to be paid in DAI. In the short term, there will be more lenders than borrowers. To attract borrowers and increase its market share, Dharma, along with its competitors, offers lower loan rates.
Additional information
The site lacks White Paper and RoadMap. However, there is a large section with answers to questions. If you still have any wishes, you can send them to the developers via twitter or email. Also, the site has round-the-clock technical support. Smart contract audit is not provided.