Dharma Protocol — Tokenized debt

May 8, 2019 · 3 min read


Banks function with lending money to people. People are the ones that borrow money and banks make a profit out of it thank its interest rates. But with the change that is happening nowadays thank the revolution of blockchain technology, things get a different shape. Blockchain technology also changes the way how people borrow and lend money by removing the intermediaries in this case banks.

This change happens thank to a decentralized application called Dharma, which is a platform where people can meet each other to lend and borrow money, so people that have the money on cryptocurrencies in any wallet or an exchange can put into work their money with Dharma and can earn up to 14% from the interest rate.

The easiest place to lend and borrow cryptocurrencies

Dharma is an open protocol with a highly generic construction that is build up allowing debt agreements in a virtual way of any type to be issued, traded as a token or be crowdfunded. The team behind Dharma seeks to build a common and secured infrastructure for lending applications so they can be easily built and monetized.

There are some design goals of Dharma:

Generic — the protocol must enable the representation of virtually any type of debt agreement as a digital asset.
Private — the protocol must not leak private, sensitive data from debtors and creditors alike on-chain.
Extensible — the protocol must be useful as a primitive on top of which more complex credit applications can be built — be those on-chain collateralized margin lending schemes, smart contract-based credit derivatives, or zero knowledge credit scoring systems.
Transparent — the protocol must enable traders to thoroughly reason about the current value, credit risk, and repayment status of any debt token without having to consult a central authority or administrator.
Un-ambiguous — the protocol must codify a debt agreement’s repayment terms in a manner that is incontrovertible, unambiguous, and easily interpretable by smart contracts and similar automata.
Un-opinionated — the protocol must be agnostic to the means by which constituent applications choose to deter defaults and delinquencies, be those legally binding off-chain loan documents, on-chain collateralization schemes, or mechanisms that are yet to be developed.


The project simply looks promising, also the team behind seems to be professionals in their field and know what is the problem. This is how they came up with a great solution for a problem which people face. It’s a debt, I think this can be one great way to prevent this. Also, people have a win-win situation. Everything seems to be perfect, but its all about proof and proven facts. If people are happy and give positive feedback, this project will have a future if it does not people will be scared to give a try and it will fail.

For more dapps like this have a look on https://stateofthedapps.com

Disclaimer: The content of this post is not intended as financial advice, please observe to do your own research.


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Reviewing DApps based on the blockchain. Check DApps on Stateofthedapps.com!

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