Dharma Brokers Whopping $6.4M In Cryptos

It appears that almost all crypto loan platforms are experiencing a massive boost. This is most especially the case since Ether holders are interested at migrating portfolio losses, all of which they endured during the bear market from last year.

Millions of Crypto Loans

Interestingly, one of today’s decentralized finance (DeFi) applications is Dharma Labs. The San Francisco-based startup appears to be an industry leader, with its recent facilitation of over $6.4 million worth of cryptocurrency loans. This figure reportedly started since the company launched its peer-to-peer lend platform back on April 8.

In terms of comparison, the aforementioned startup has managed to accumulate over $10 million worth of ETH in its system. As for the industry incumbent BlockFi, it was successful in obtaining around $18 million in both BTC and ETH deposits, a narrative it wrote over the past few months.

In an interview, Brenda Forster, the COO at Dharma Labs, said there are around 650 individuals – a figure that is completely based on the noncustodial mobile app’s user accounts – that have acted as either a lender or borrower so far. He added that these relatively short-term, fixed-rate loans give borrowers the ability to lockup ETH and, at the same time, borrow DAI or vice versa. The DAI, in particular, is deemed to be a dollar-pegged stablecoin. As for lenders, he said that they are able to earn approximately 2.7 percent interest, with a timeline of only 90 days.

The Role of Dharma Loans

It is safe to say that these Dharma loans are starting to be a core part in the overall DAI system. It is worth noting that Polychain Capital is also said to be among the investors in the startup. Coinbase Ventures, on the other hand, was part of the $7 million funding round of the company earlier this year.

With the continuous rise of DAI fees, it is no wonder why the interest rates of Dharma rose significantly. For starters, both of these loan platforms completely rely on the exact same smart contract. And by doing so, they are able to determine the price feed that is responsible for defining the collateral’s liquidation rate. So if Ethereum’s price tends to drop a bit too low, then it is very possible for users on either of these platforms to potentially lose their valuable deposits. This is the main reason why both Dharma and Maker communities are always relying on each other, as only by doing so will they be able to implement arbitrage opportunities and stability.