Investing in Dharma
At Ripple, we made a very deliberate decision early on to focus our solutions on a single problem, use case and customer. The thesis was that focus would increase our team’s chances of being the best at solving that problem, and thereby gain real world traction. Our belief is that crypto can be applied to transform global payments and our conviction about crypto’s potential impact in financial services more broadly has only grown, in sometimes surprising and non-linear ways.
One thing we have learned is that liquidity is the lifeblood of financial products. As an example, in payments, a liquid market between US Dollars and Mexican Pesos enables more efficient remittances. Crypto has a few interesting attributes when it comes to liquidity:
- Permissionless: The open access inherent in crypto networks allows anyone with internet access to increase liquidity;
- Programmable: A broader design surface allows developers to create new solutions that can improve liquidity;
- Composability: Programs can interact atomically as composable building blocks, furthering their distribution and allowing independent developers to create complex solutions from other simple ingredients in the crypto ecosystem;
- Incentives: Tokens can incentivize behaviors to coordinate and bootstrap solutions faster and more efficiently.
For these reasons, we believe crypto wins at solving liquidity and ultimately will fundamentally transform finance.
A primary enabler of liquidity in financial markets is credit. It is a core primitive that allows people, businesses and eventually software to create and provide liquidity where it is most needed and as a result drives the trillions of dollars in volume in the global capital markets. The most liquid capital markets products, such as foreign exchange, are built on the back of credit and leverage. Over the past decade, we have witnessed cryptocurrencies change the way we think about storing and exchanging value and we are now beginning to see how the characteristics that make crypto so powerful — open networks and protocols, trust minimization and instantaneous settlement — can be extended into the far larger and impactful world of credit. We are excited to be backing the Dharma team who are central in progressing this vision.
Dharma’s development has patterns we recognize, including: work on a protocol / infrastructure layer that coordinates peer-to-peer credit interaction through a network of relayers; and the recently announced Lever as a solution to package and deliver this liquidity to a target customer and use case. We are strong believers in the team and their approach. Their work to solve problems for crypto capital markets with margin lending is well positioned to bootstrap the reshaping of the credit markets.
We are excited to support the Dharma team and invest alongside Green Visor Capital who have a uniquely informed perspective on the evolution of fintech. Our conviction is that Dharma’s innovation in the credit markets will ultimately have a tremendous impact on how the world accesses liquidity, resulting in entirely new forms of financial solutions not previously possible.