[Dharma] – Crypto Lending Ethereum based Platform Dharma Launches V2 in Closed Beta

Fibo Quantum

Cryptocurrency lending platform Dharma has launched its Version 2 platform in closed beta testing this week only accessible to existing users of the platform. As part of the new version, the Ethereum-based platform will be partner with decentralized finance marketplace Compound, also based on Ethereum.

With the new partnership, Dharma will focus on what it does best while outsourcing what it does not excel in such as liquidity. Since its launch back in February 2019, Dharma has seen reducing usage of its platform leading to a pivot of some sought. Dharma was initially launched as a peer to peer lending platform with fixed interest rates.

Now, according to Brendan Forster, who is the co-founder and COO of Dharma Labs, the startup will be focusing on its latest mission statement: achieving status as the easiest place to save your money from anywhere in the world. It plans to rollout lending later but for now, version 2 will be focusing on attracting lenders to the platform which will be integrated with Compound in order to enable matching of orders.

According to data sourced from Loanscan, we can see that Dharma’s loan origination came down from $6.9 million during its launch in April to a low of $1 million only three months later. On the other hand, Compound’s loan origination rose in a comparable time gap of May to July from $12 million to $43 million. Dharma and Companied have always been competitors. Both are offering services to the same market and both are based on the popular Ethereum network. However, it seems that in order to survive, Dharma has had to pivot and focus on areas of strength.

“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,” said Arianna Simpson, the founder of Autonomous Partners and investor in Dharma. “This is a natural step in the maturation of the industry.”

In a statement, Forster said of the pivot as a natural evolution to its platform which was slowly picking up more negatives than positives. He said that,

“[Dharma] was successful but what we heard from our users was that it was too narrow of a use-case. What they wanted was far more tailored around the saving of money, rather than the lending directly of money… That led to a several-month-long investigation in which we first attempted to build our vision for the savings products on Dharma V1 but ultimately decided … to build Dharma V2 on the Compound protocol.“