“Dharma is the easiest place to save money from anywhere in the world.”
That is the new mission statement for the Dharma decentralized finance (DeFi) platform as described by Brendan Forster, co-founder and chief operating officer of Dharma Labs, who created the Dharma protocol.
On Thursday, Dharma Labs announced that it would relaunch its services in closed beta from a new savings product.
“We let people save in stable currencies,” Forster told CoinDesk. “What allows the new product is the instantaneous deposit of stable currencies and the instantaneous gain of interest in those stable currencies.”
After raising $ 7 million in February 2019, Dharma Labs launched its first product in the ethereum blockchain in April. At that time, Dharma was intended to facilitate the loan and the loan between cryptocurrency pairs at fixed interest rates and for fixed periods.
Now, by using existing crypto liquidity groups on the Compound lending platform, Dharma V2 moves away from fixed interest rates and loan terms to dynamically changing variables and does not require users to block their funds. The company’s new site announces interest rates of up to 11.2 percent.
According to Forster, the importance of such a pivot is based on “ease of use.” Despite the initial success that Dharma showed in its first weeks, Forster said that Dharma users wanted more flexibility, which the original Dharma protocol could not provide. .
“[Dharma] was successful, but what we heard from our users was that it was a case of too limited use. What they wanted was much more adapted to saving money, instead of direct money lending, “Forster said.” That led to a multi-month investigation in which we first tried to build our vision for savings products in Dharma V1, but finally we decided … build Dharma V2 on the Composite protocol. ”
In addition to this, Dharma investor and founder of Autonomous Partners Arianna Simpson said:
“Working with Compound allows Dharma to focus on the parts of the business which they do best, which in my view include design, product, and user experience, and instead outsource part of the stack. This is a natural step in the maturation of the industry.”
Taking advantage of the strengths of other DeFi platforms and creating synergies within the broader ethereum ecosystem is exactly how Compound founder and CEO Robert Leshner also characterized the next phase of Dharma.
“The Dharma team is building an extremely easy-to-use interface that has the opportunity to incorporate the next 100,000 decentralized finance users,” Leshner told CoinDesk. “Compound is delighted that there are more entrance ramps.”
As of today, all existing Dharma users will be subject to the closed beta product. In addition, new cryptocurrency deposits will not be allowed on the original Dharma V1 platform. Dharma V1 will only continue to operate until all existing loans have been paid.
This process of gradual elimination of Dharma V1, according to Forster, actually began in July. With existing Dharma loans in maturity and without the creation of new ones, the total value of cryptocurrencies locked in Dharma fell from a maximum of $ 30 million to just under $ 10 million.
According to Forster, what may have seemed an unusual drop in the value of the platform for any observer in the DeFi space was actually an intentional result of relaunching the Dharma platform as a variable savings product.
In the coming months, Dharma Labs will expand Dharma V2 to also include loan services, non-custodial smart wallets and fixed entry and exit ramps. Forster’s goal is for Dharma to be classified as one of the most popular DeFi applications in the ethereum ecosystem.
“It’s a matter of months before we reach that peak and, in all honesty, we have our sights set substantially higher than that,” said Forster. “In short, we want to create a bank without borders.”
As such, it is not only the ethereal ecosystem in which Dharma could have a great impact, according to Simpson, but cryptography in general.
“Dharma is playing a very important role in making the DeFi ecosystem usable by a class of consumers that is much broader than the first crypto users who were previously the only ones who had the technical sophistication to use most of these products and services, “said Simpson, adding:
“By making a much better user experience, Dharma is expanding the number and type of people who can interface with decentralized finance, and crypto more generally.”
Team photo via Dharma Labs