The Dharma platform, which allows cryptocurrency loans through the Ethereum network, announced via Twitter the suspension of its deposit and loan operations, without offering details regarding the reasons, or the possible restart date of its activities.
Dharma recently communicated its decision through a Twitter thread, where they said: “We are working hard to make Dharma the easiest place to borrow and lend cryptocurrencies”. This statement points out that the company will probably activate its loan system in the future.
The Dharma team added that, at the moment, those who have an account can access it and do withdrawals if the funds re not comitted with the platform in any way. Even log-ins and sign-ups are still available within the website.
It is safe to say that future related events around this matter will be interesting. To stay in tune with news related to the platform and new updates, it will be necessary to complete a formal registration in Dharma.io.
The closure of its loan system has generated discontent in the crypto community, especially due to the circumstances in which it happened. However, many users are still waiting for news and announcements regarding a new opening of these services, which for now, will not be possible. Getting a cryptocurrency loan service is as difficult as hiring a lender at the end of your street. These deals must be based on a lot of confidence and if it works well, the company (or the lender) will always be a candidate for a future deal.
Knowing what Dharma was
Despite being a recent launching firm, Dharma was welcomed in the crypto loans sector. The startup participated in financing rounds that produced excellent results and where it collected US $7 million from recognized venture capital firms, including Coinbase Ventures.
Dharma users could lend and borrow digital currencies without custody, which means that they retain access to their currency assets at all times, maintaining control of their private keys. The company made this possible thanks to an innovation called “Dharma Key”.
In addition, Dharma guaranteed lenders a fixed interest rate if a borrower withdrew their debt. For applicants, access to cryptocurrencies without the need for a bank account, a favorable credit score or physical limits offered significant advantages.
No more loans
Meanwhile on Twitter, some users reacted with skepticism or irony to the announcement of the suspension of loans by Dharma. “Trust us and don’t verify anything. Absence of transparency = Absence of trust, ”wrote user @WhiteRabitBTC, who said:“ Enjoy your trip to Zero ”.
Another user who defines himself as bitcoiner, @AnselLindner, comments with a definition: “Scam: a project that intentionally or not will never work.”
Dharma, based in San Francisco, began in February of this year with financing of USD 7 million from venture capital investors. At that time, Dharma Labs marketing manager Max Bronstein referred to the ease and speed of the platform in establishing smart contracts, for borrowers and lenders. Bronstein claimed that all this can be done at half the cost offered by traditional borrowers.
In April of this year Dharma announced the start of its operations. Its system uses smart contracts to stipulate the conditions of loans made between users, which can take or give ETH or DAI credit,
Cryptocurrency loans recorded a significant boom in the last four months, according to data provided by the LoanScan.io portal, which records that between April and the end of July, cryptocurrency loans rose to USD 257 million, while the total of the previous 16 months reached only USD 284 million.