Dharma Labs Raises $7 Million From Green Visor, Coinbase and Polychain

Offering a trustless lending product that "simply 'can't be evil,'" Dharma Labs just raised $7 million from some big-name investors.

AccessTimeIconFeb 5, 2019 at 2:00 p.m. UTC
Updated Aug 18, 2021 at 10:41 p.m. UTC

Presented By Icon

Election 2024 coverage presented by

Stand with crypto

If ethereum is the protocol for decentralized global finance, then it's going to need a lending tool built just for crypto.

That's the thesis of Dharma Labs, which built the Dharma protocol for decentralized lending businesses. Its first product, Dharma Lever, is in a closed alpha release now, enabling loans for traders and large crypto holders.

  • Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
    Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
  • Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny
    Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny
  • The first video of the year 2024
    The first video of the year 2024
  • The last regression video of the year 3.67.0
    The last regression video of the year 3.67.0
  • Now the startup has secured $7 million to build out the product in a round led by Green Visor Capital, a fintech-focused venture capital firm. Other participants include Coinbase Ventures, Polychain Capital, Y Combinator, Passport Capital, Blockchange and Ripple's Xpring fund.

    Dharma CEO Nadav Hollander said in 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."

    Dharma Lever's website promises a few advantages over the existing solutions for credit in crypto, a service that is expected to be primarily used for traders to make investments on margin. It works directly from a trader's wallet, without the need for a special extension.

    Loans are all made trustlessly, governed by smart contracts. Dharma Lever also promises better loan rates over those offered on exchanges.

    "Without a central point of failure, Dharma’s financial services simply ‘can’t be evil,’" the company said, with a wink toward Google.

    The company plans to use the investment to expand its engineering and growth teams, according to a statement.

    Growing ecosystem

    The gold rush has gotten a lot slower, but more shovel shops are opening.

    There's been a slew of new companies emerging to offer crypto versions of existing, well-established financial products. For example, Compound is building a money market for crypto. Paradigm is building a decentralized order book. Caspian is building a more sophisticated backend for crypto trading and investment operations.

    This increasing robustness could be key. Research out of the University of Queensland suggested that crypto lacks the adequate liquidity to find accurate prices.

    Indeed, Mike Walsh, general partner at Green Visor, said in a press release:

    "In an industry where economies are natively digital, we believe Dharma's technology will become a necessary piece of infrastructure for future growth."

    Fellow-investor Coinbase Ventures echoed that sentiment. Emilie Choi, the Coinbase VP who runs the ventures arm, told CoinDesk:

    "Dharma’s lending product makes it easy for developers and people to create loans that are trustless and managed on-chain. We view companies like Dharma, and their Lever product, as a sign that the crypto ecosystem is maturing, and an important step on the path to a more open financial system."

    Noting that Hollander, Dharma's founder, is a former Coinbase engineering intern, Choi added, "We’re proud to support our alumni as they progress in their crypto careers and make new and novel contributions to crypto."

    Update (Feb. 5, 18:05 UTC): Blockchange and Ripple's Xpring fund were also involved in the funding round.

    Zack Seward contributed reporting.

    Lao lanterns image via Shutterstock

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information have been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. CoinDesk has adopted a set of principles aimed at ensuring the integrity, editorial independence and freedom from bias of its publications. CoinDesk is part of the Bullish group, which owns and invests in digital asset businesses and digital assets. CoinDesk employees, including journalists, may receive Bullish group equity-based compensation. Bullish was incubated by technology investor Block.one.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.