Dharma Protocol

Dharma Protocol was an open framework, launched on the Ethereum blockchain by the start-up Dharma Labs in 2017–2018, for creating, signing and trading loans as tokens. A loan's terms were written into smart contracts, and the right to be repaid was represented by a token that could be transferred, an early attempt at tokenization of debt. The protocol relied on off-chain parties, called relayers and underwriters, to find borrowers and assess risk, a design that saw limited uptake as pooled models such as Compound became dominant in decentralized lending. Dharma Labs then shifted to a consumer app that let users earn interest on stablecoins through DeFi protocols with a simple bank-like interface. In January 2022 the company was acquired by the NFT marketplace OpenSea, and the Dharma app was later wound down. Also see decentralized finance.