Yesterday I wrote about dYdX, a protocol for decentralized financial derviatives.
Today is another project building a protocol on top of Ethereum. This one is Dharma, an open protocol for tokenized debt.
Like dYdX, Dharma has some notable investors too including Y Combinator and Polychain Capital.
Per Dharma, an under-recognized advantage of blockchains is that they necessarily engender the creation of universal, permissionless standards for tokenized asset classes.
The ERC20 token standard created the common rails on top of which a diverse ecosystem of secondary markets for tokens could be built in a permission-less and interoperable manner.
Just the liquidity of tokens alone is a great leap forward from the traditional equity fundraising.
Dharma is a generic, permissionless protocol for issuing, underwriting, and administering debt instruments as cryptographic tokens.
The protocol aims to build a common informational interface by which exchanges, brokerages, and traders can reasonably price a tokenized debt's default risk without having to rely on a singular centralized data broker.
The architecture is inspired by the 0x protocol.
Dharma aims to make the loan markets more transparent and avoid incidents like Well Fargo’s recent $1 billion fine for loan abuses.
The project is led by founder and CEO Nadav Hollander. Prior to founding Dharma he worked at Google and Coinbase.
What’s interesting is this project has no planned token sale so far. But that could change in the future.
For now it’s another cool project being built on Ethereum.
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