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Launch HN: Dharma (YC S17) an open protocol for borrowing/lending cryptoassets
184 points by nahollander on May 22, 2018 | hide | past | web | favorite | 162 comments
Greetings HN!

My name’s Nadav Hollander, and I’m the founder of Dharma Labs (https://dharma.io). At Dharma, we are creating a suite of protocols, standards, and developer tools for issuing and administering tokenized debt agreements on the Ethereum blockchain.

After three extensive external security audits of our smart contracts, we are releasing the public beta of Dharma Protocol v1 on the Ethereum mainnet -- developers can take a crack at building decentralized lending applications at docs.dharma.io, and non-developers can try out borrowing and lending a wide variety of crypto-assets using Dharma Plex (https://plex.dharma.io).

I first became interested in the cryptocurrency ecosystem in 2015, when I took Dan Boneh’s class on Bitcoin & Cryptocurrencies at Stanford. Though the technology was (and still is) quite immature, I fell in love with the nascent space, and subsequently worked as an engineer at Coinbase.

At Coinbase, I was struck by the fact that a huge amount of users’ cryptocurrency was sitting idle in cold storage, instead of being deployed in some capacity as dollars would in a savings account. The advent of generic, programmable blockchains like Ethereum presented an intriguing possibility -- what if we could build borderless infrastructure for borrowing and saving that wouldn’t require a company like Coinbase to sit in the middle?

That’s why I started working on Dharma -- a framework for originating, issuing, crowdfunding, and trading debt on blockchains like Ethereum. In essence, what we do is create tools, standards, and smart contracts that developers can use to build profitable lending applications that can tap into a borderless pool of credit liquidity. These tools are all fully open source and free to use -- there is no native “Dharma token” that users are forced to leverage in some capacity.

We look forward to hearing HN’s feedback / thoughts!




Congrats on getting to this point! Been following Dharma closely for a little while now as we (Kiva) have an interest in trying to increase financial inclusion and decrease lending costs for the world's poor and have been hoping Dharma may end up being one piece to the future of our work.

Could you possibly speak to how you intend to enable KYC (Know Your Customer) / AML (Anti-Money Laundering) to work with Dharma? The best bet so far has seemed to be trying to incentivize it through providing automatic fees to external parties to perform these actions and holding the money in escrow until it goes through. However, it would be great if you could share if you'll have discussed this problem at all.

I'd love a world where we didn't have to deal with KYC & AML, but we do, and the sooner we figure out how to make it work in an efficient and inexpensive manner for the world's poor, the sooner we can reach the UN Sustainable Development goals around financial inclusion.


Thank you! :)

We've pretty deliberately opted out of baking jurisdiction-specific protections (be they KYC / AML, accreditation, etc.) into the protocol insofar as we really want this to be a universal standard that's jurisdiction-agnostic -- to give a somewhat crass analogy, most developers would agree that it does not make sense for content-protection against, say, child pornography, to sit at the level of TCP / IP. Jurisdictions vary widely in how they treat lending law, and so we've opted to be as flexible as possible on a technical level.

With that being said, we're actively working on making sure that, at layers above the protocol, developers have an easy time plugging in / restricting functionality on the basis of regulatory parameters. There are several interesting projects in the decentralized identity space that are tackling ways of natively attesting to KYC / AML screening on blockchains like Ethereum, and we're actively in conversations with them to make sure we maintain compatibility.


I also work in the exchange space like you used to and my thinking is pretty much fully aligned with the way you pose the issue and I'm very excited about your intention behind Dharma. I also agree with your current thoughts on approaching KYC and AML (please see my post in response to this one's parent). I'll reach out to you via your website if you don't mind since HN doesn't have PMs, would love to figure out if there's a way I can contribute.


I am an engineer at a Coinbase competitor company and I have been thinking about this problem (massive amounts of crypto assets lying dormant) and possible leverage (global access to a universal debt market) and I have been researching Kiva since it seems to be the early player in this space. My 2c - Yes KYC and AML is important but it doesn't make sense relying on national identity documentation and storing everyone's PII in your own database. There's a ton of companies working on identity solutions where the user retains ownership of their sensitive information. With GDPR catching on and similar regional legislation popping up pretty much everywhere outside the EU, KYC and AML information pose a significant liability (and rightly so!) to companies in the fintech space. Especially so for early entrepreneurs who want to innovate but don't have the risk and compliance teams to deal with such sensitive information.

The proper solution is not to hold people's PII at all and depend on a provider (ThisIsMe, Civic, Consent, IDNow, etc, etc, etc, etc) combined with the customer's social graph information. If you want to know your customer, you need to know the people who knows your customer. After-all, who knows you better than your family and friends?


Yes, I whole-heartedly agree, the user should own their PII and who has access to it, but the KYC and AML checks still have to happen. Having a provider do it is also great, but Civic (as one of your examples) has explicitly stated they can't do it in international low-income contexts, and they are unlikely to ever be able to in a way that makes financial sense.

That's why folks in this space need to be thinking about how to solve this problem. There's not a clear, easy answer (or if there is it has not been communicated out enough otherwise everyone would be using it).


I remember putting money into Kiva around 2007, it was increments of $50 IIRC.

Unfortunately, I lost a job and the ability to work, spent 401k, went bankrupt and lost access to the email address to my Kiva account. It seems ironic as I no longer have even $5. I don’t really worry about money anymore with serious endocrinological, ophthalmological and neurological problems... sleeping 12 hours and awake for 60 hours might place small limitations on life.


I propose one more tiny step. Instead of having to use these cumbersome cryptocurrencies as payments method, you could also use these IOU's of selected trustworthy institutions as payment tokens. I mean, Instead of you needing to get your currency back from Coinbase and then transfer it to your coffee shop owner, you would just say to Coinbase that hey, you do not need to pay me this cryptocurrency, pay the coffeeshop instead. Wouldn't that be much more efficient?

This is actually one of the more frustrating issues for me in cryptocurrency discussions. The underlying monetary policy is of fixed or predefined money supply, that is supposed to somehow stabilize the price/value of the cryptocurrency in the long term because of hand waving, wishful thinking and reasons, all the while having exactly no way to stop fractional reserve banking emerging nor regulating it or the additional monetary supply it will create. This being one of the main reasons why current crop of cryptocurrencies will never be used as economy-wide payment method and why their price will always stay chaotic (unless the price stabilizes to zero...)


There's something I don't understand about Smart Contracts.

Normal contracts are written by lawyers. They are reviewed by both parties' lawyer. Sometimes, after the contracts are signed, the lawyers disagree what a particular provision or clause means.

At which point, they either negotiate or sue. In which case, a human judge weighs up the case and decides.

How do disagreements work with smart contracts?

I assume some contracts will be buggy - mostly because programmers are just as fallible as lawyers. So how are disagreements resolved in an equitable way?


    How do disagreements work with smart contracts?
If you are big or popular or have connections, then the guys in power will bend the rules in your favour. Google 'The DAO' for an example.

Otherwise, an algorithm will decide.


Not quite. The ecosystem was much smaller back then. Nowadays, I'm not sure one company would be able to make a case for forking the currency.

Besides, you can still buy ETH classic, if you disagree with the decision. It's just not worth much.


Ethereum EIP-999 (https://news.ycombinator.com/item?id=16843991 and https://github.com/5chdn/EIPs/blob/master/EIPS/eip-999.md) is exactly that, a discussion of patching Ethereum to unlock a a few hundred million dollars that are inaccessible due to a software bug.


It's almost definitely not going to happen.


I am 100% sure that if I went and "the code is the contract"ed whatever ends up being DAO2.0 out of 5% of all existing ETH, that Vitalik would come save it "just this once" one more time... I absolutely do not believe for one second that there wouldn't be another fork. And I say this as someone with a substantial interest in the currency.


Well, the point is, Vitalik can't do that. The community would have to agree with him.

If the situation were sufficiently dire, then presumably it would be easy to get community support. But the opposite is true too.


Nope, won't happen again. Look at EIP-999. It's backed by Vitalik but is still dead.


EIP-999 isn't backed by Vitalik but it was backed by major figures in Ethereum, including at least one co-founder. And yes it's dead.


> How do disagreements work with smart contracts?

In the case of Ethereum that's easy: you hard fork the currency.


It's code. If there's a bug it does what the bug says.

What happens when there's a disagreement with your program that prints "Hello W0rld"? It prints "Hello W0rld".


It depends, I guess. If what you're talking about is a disagreement between two parties about the object of the contract or its conditions, I don't see why you couldn't resolve it the same way you would with a paper contract. I don't know if any country's definition of contract is broad enough to include smart contracts, but you could possibly bring this to court, perhaps?

If the two parties can agree on a new stipulation of the (smart) contract, a new contract can be issued.

As an aside, this is painful, as a smart contract's address will usually be linked to some user facing application or just your own wallet.

A way to facilitate this is through the use of a proxy contract, which is a contract that exists only to forward instructions to a secondary contract (the main one). The main contract can then do whatever is meant to do.

Now if there is a disagreement or a bug, after an agreement is reached, you can deploy your new contract, change the address on the proxy contract and you're done.


Consider finance options contracts. It's math, there aren't ambiguities, "that's not a bug, it's a feature". Also consider that if lawyering was not an available tool in software contracts, there would still be a game theoretic equilibrium, just a different one, but markets would still function. Before contract law there were other coordinating forces, such as royalty and religion, and things worked out well enough. http://home.uchicago.edu/~rmyerson/research/stratofc.pdf


> such as royalty and religion

That's because they had the power to go to war to enforce their contracts. Etherium holders do not have such power, so ultimately, relies on the country's laws to enforce the smart contract.


Game theory is the more fundamental thing that power ultimately derives from. From the paper I linked:

"Focal arbitration power is power to redefine property rights, which of course may be profitable for the focal arbitrator himself. But a society's generally understood rules for recognizing leaders can impose constraints what a leader must do if he wants to retain his generally recognized position of authority."


With any new lending platform I have to ask: What happens if I borrow assets, spend them, and never pay back the lender?


In the current implementation / use cases we're focused on, your collateral, which is held in a smart contract, would become eligible for seizure by the lender.


And what is the collateral here? My house? A car? Money?

If my collateral is another liquid asset it doesn’t make sense to borrow, and if it isn’t how exactly does the lender go about seizing it? I want this explanation to reach a satisfactory conclusion.


The collateral can be any other asset that is represented by a cryptographic token. Right now, few crypto-assets map to real world assets in some capacity, but we're willing to make a bet that this will change faster than most expect.

Already, though, there are many interesting assets in the world of crypto that are particularly well suited to being put up for collateral -- namely, the emerging class of crypto-collectibles such as CryptoKitties.


> namely, the emerging class of crypto-collectibles such as CryptoKitties.

You can’t honestly be serious about this. Please get outside the Silicon Valley bubble and look around.


Look at the number of people that collect all kinds of crap: DVDs, video games, stamps, baseball cards, in-game virtual items, comics, art, etc. You can argue that some of it has more utility -- art is culture! you can watch a DVD! -- but the mindset of collecting goes beyond that, and certain utility, like games or trading cards, maps just as well to the crypto collectible world. Cryptokitties is an early example, but I am 95%+ confident something like it will be a HUGE hit within the next few years. So yeah, why not use the crap you already collect to secure a loan?


You have no idea how much you underestimate what CryptoKitties started. Cryptocollectibles will most likely be the first killer app. It's not about the kitties, it's about the underlying mechanic of owning a truly unique digital item.


Why would there ever be a cryptographic token representing my house or car? It just doesn't make any sense. The map is not the territory.


I'm not a crypto-apologist, but this use case I can see (sorry if it's a little rambling).

Each property/car could essentially be represented by its own smart contract, initially held by the mortgage lender. When you pay an instalment of your mortgage, it executes the contract to "release" the equity to you.

When it comes to selling, to change the name on the contract, the buyer would pay based on the split between the lender and the owner, or pay to the owner who has to close the contract with the bank (in the event of moving to a new property, the bank and owner get their relevant proportions on Property 2's smart contract, and it goes again).

You could then "lend" out the equity you've earned from the bank, and use it as collateral for something else, getting it back once you've satisfied the terms of that agreement (meaning, if you don't, the person you lent it to is a creditor on the selling of the house/closing of the contract).

It's essentially automating/giving an interface to an existing contractual relationship. I think this interface might actually be clearer for some people who are financially uneducated, as it expresses their ownership percentage, debt obligations, and potential secured borrowing options in one go. Whilst a lot of it could be done without the crypto side of things if everything happens with the same bank/group of people, with buying and selling assets, you're working on trust with a bunch of different organisations and people, the ledger aspect could help with this.


That's all well and good until someone steals my private keys and and now I'm out a house.


"You wouldn't download a house" memes aside, like a lot of the move from analogue to digital, there was always a chance someone could have socially engineered you out of the deeds to a house, the technology just opens up the attack potential exponentially.


What's the point? This doesn't gain anything over existing legal contracts.


> What's the point?

>> I'm not a crypto-apologist

> This doesn't gain anything over existing legal contracts.

>> I think this interface might actually be clearer for some people who are financially uneducated, as it expresses their ownership percentage, debt obligations, and potential secured borrowing options in one go. Whilst a lot of it could be done without the crypto side of things if everything happens with the same bank/group of people, with buying and selling assets, you're working on trust with a bunch of different organisations and people, the ledger aspect could help with this.

I'm not arguing for it, merely point out the potential use case people would push for, and if it were to be pushed, I outlined why I think it could beat out existing legal contracts.

Would appreciate a rebuttal to my points.


> Would appreciate a rebuttal to my points.

People already have a hard time dealing with contracts written in their own native tongues, why would they prefer having to read and validate source code? Even if a few standard blockchained contracts emerged for real estate deals that could be validated into human language, regular people are terrible at using and trusting software that they use irregularly. In some jurisdictions it is possible to buy and sell houses without involving lawyers or bankers, but most people use their services anyway because they are legally obligated to act in their client's interests, and they are experts at such things. Obviously you will also have to include the government-administered land title registry, an institution that have slowly evolved over centuries and works very well. There is no good reason to decentralize land titles, even if it were possible.

So even if bringing public-key encryption and software interpreters into a real estate deal were to introduce some efficiencies compared to dealing with word docs and paper copies that any country lawyer could amend and attest to without having to hire a Solidity developer and praying that it's one that can handle a weird contract addendum without introducing a bug, which is a big if, the costs and complexities would barely budge because there is a lot more that goes into a real estate transaction than validating contracts.

Crypto-apologists (I know you're not one) seem to include a lot of people who have never stressed out over a real estate deal, or worked on a helpdesk.


All fair points - but there's no reason not to involve legal counsel in smart contracts either (if we're talking in hypotheticals about a bank being ok issuing a smart contract for a mortgage, then I think we have to make the assumptive leap Solidity developers are two-a-penny), and the benefit of the solution I proposed is that your everyday interaction with your state of the contract is more visible than it is with the current system.

My proposal is less about the legal setup, and more about the ongoing interaction with the contract, which might aid with financial education, especially around equity (see how many people are caught up in interest-only mortgages), and debt leverage.

Whether you use a ledger or not depends on how it could actually work, but there aren't many other solutions that give transparency among multiple disparate parties, without a reliance on a credit agency (which, as we all know, has caused some... issues...).

Not sure whether I'm keen on that vision of the future or not, but I can definitely see the day where physical assets are represented by some digital manifestation/token.


Since there are many tokens (and increasing) that people must hold to be part of some network, tokens that are effectively shares of a business and stuff like that, these may make a good deal as collateral. People do lend out their stock, for example, today.


If the borrower is the one setting the collateral, what's to prevent me from putting up something that's rapidly depreciating like my collection of e-Beanie Babies and effectively stealing the loan?


I'm sure the lender could make the right decision there if they had enough knowledge and were able to view what the collateral is.


Other cryptocurrency, I am guessing.


How can this make sense? If the collateral is X, then the borrowed amount (Y) has to be less then X. Why lend anything in the first place, when that means you can only spend Y while otherwise you could have spent X which is more?


Say I own 1 bitcoin at $10k/BTC. I want to go buy a mining rig for $5k. I could sell 0.5BTC and buy the rig. BUT, I believe that BTC is going to $20k, and I don't want to sell. So I go to person X and say lend me $5k against what is currently $10k of BTC. He has 2x collateral coverage... so he makes the loan. if BTC falls to $7500, he may have the option to sell and recover his loan. I get my money so I can create more "money" out of thin air (or rather electricity and metal). When BTC goes to $20k I am rich. RICH.


This can easily be done on CME futures market, we don't need dharma for this. Futures can be used in multiple ways to swap inherent volatility with a fixed stream of return.


What happens if after immediately getting his $5k BTC I buy a sweet rig for $15K BTC and the price of bitcoin drops to $4k?

I guess I can’t spend the collateral in the first place?


This can happen on the stock market too. When bitcoin drops to around $5k, you get margin called and bitcoin will get sold on the open market.


This happens quite regularly in the world of margin trading.

Imagine the following:

1. I own ETH, and want to hold my ETH position so I can enjoy price increases, but I need liquidity to live my day to day life and, well, it's hard to pay for things with ETH. 2. Instead of selling ETH and exiting my position, I put ETH up for collateral and borrow a stable-coin (like DAI) against it. That way, I maintain my price exposure to ETH, but have liquid cash to use for my day-to-day needs.


Oh! So this is not about lending buying power. But about lending in the context of betting on currencies.

A lends 10 Xcoins to B. B puts 11 Ycoins into escrow. A will either get back 11 Xcoins or 11 Ycoins.

If Xcoins rise in price relative to Ycoins, B is happy and A is sad.

If Xcoins fall in price relative to Ycoins, B is sad and A is happy.


And if you don’t use coins for day to day living expenses?


You could cash out the borrowed coins for cash.


My company[0] will be using Dharma later this year to put personal loans on the blockchain. Dharma is the best of the bunch in our opinion, and we are very pleased with the support the Dharma team has provided.

[0] https://airfox.com


I didnt see this mentioned on the website, but what about the legality of this ?

Is this legal in the US ? Or where is it legal , illegal to use ?


Yes -- two parties are permitted to lend money to one another in a mutually agreed environment. It's important to note, though, that developers who build end-user applications on top of Dharma ought to be cognizant of lending regulations / securities law in the jurisdictions they are active in. However, we've opted to build Dharma in a non-jurisdictionally-biased manner -- we think that jurisdiction-specific regulatory restrictions are better implemented at the application layer rather than the protocol piping.


That is a dangerous position to put yourself in. AML and Terrorist financing laws make everyone responsible, you generally cannot claim innocence if you take no precautions and are involved in some kind of incident.

Good luck.


No, this is akin to building a protocol. The creators of HTTP are not in trouble when someone uses the web for illegal activities.


HTTP is not intrinsically tied to finance, though. This is specifically a protocol for financial transactions, for sure it would fall under AML laws.


I’m sorry but you are mistaken. I think you should research this technology more.


Are you a finance law attorney? This is marketed as a financial protocol. Completely different than HTTP.


An RFC and source code does not constitute participation. That is dharma at this point.


That this choice happens to reduce the technical and regulatory complexity of your product is I'm sure just a happy co-incidence :)


What stops someone from putting up some collateral, disappearing with the loan and then just creating a new account?


The collateral is held in a smart contract -- if the borrower disappears and fails to make a repayment, his collateral becomes eligible for seizure.


Are the collaterals always worth equal or more than the amount borrowed?

I asked that assuming people put up 1 eth as collateral to borrow 2 eth.


Usually collateral is supposed to be equal or more than the amount borrowed, especially in a situation like this where there is no 'credit score' to use to determine likelihood of default.


The protocol doesn't have a credit score. That's a concept better suited for the application layer built on top.


Right, which was why my point was that the collateral is probably going to be at least equal in value to whatever is borrowed.


Dharma Protocol doesn't require that the value of collateral be greater than the principal of the loan, but we do expect the market will demand full- or over-collateralization.


So, you've reinvented fractional reserve banking, minus all the protections we've built into the modern version of it we all use today through decades of hard lessons? Should be fun.


Welcome to the crypto “space”. It is a bunch of people who don’t understand math, finance, politics, monetary policy, legislation, government, economics, computer science, or seemingly life itself. All sit around and rediscover why society is shaped the way it is...


This service sounds incredible! However, naming it "Plex" seems like a bit of a hiccup since most just think of Plex as the most pervasive home media server in existence...


Or that currency I used to buy my first space ship. In eve online.


ISK was the currency, PLEX was the subscription, right? Or did you use PLEX to buy it?


What is the advantage of using the blockchain rather than creating a fully centralized debt exchange?


I guess easier access to global markets, and reduced counter party risk with the exchange. Having the loans fully or over-collateralised (in the absence of credit scoring and real world debt collection) definitely reduces potential applications though.

Congrats on the launch still, great name ;)


I'd recommend reading this blog post we put out. It explains better than I can in a short comment: https://blog.dharma.io/dharma-an-open-protocol-for-generic-t...


I am interested in knowing if there are advantages to using blockchain generally outside of Bitcoin - I don't understand it in this case from reading the post. A centralized exchange could be fully transparent, publishing every transaction, and handle every type of debt, if it wanted to.


Censorship resistance is a big factor - since no one entity controls the Ethereum blockchain or smart contracts that have been deployed to Ethereum, there is no way to shut down the service. This paves the way to a single global capital market that is much more inclusive and efficient than the haphazard and heavily intermediated capital markets we have today.


It absolutely is not censorship resistant. It is 100% mob rule. Smart contracts are complete horseshit and this one will be no different. See also: the DAO. Can’t work and never will.


A privately owned centralized debt exchange company can go out of business.


And one of these can fork itself to leave you stranded if the mob (or top of the pyramid) switch to another more popular fork. You’ll be left holding a bag of worthless tokens. You’ve traded the entire legal infrastructure for mob rule.

This project, like all crypto projects, is fundamentally flawed. The only difference is this one somehow managed to con a bunch of VC folk into funding it.


If a blockchain forks you have copies on both forks. What are you talking about?


Investor buy-in.


Congrats for the Dharma team for this anticipated launch! Been following them for a while, great team and very focused exection!

Our company [0] is building an API platform to transact on digitized real estate assets, and we intend to leverage Dharma as much as possible in the future.

[0]: www.fabrica.city


How is paying the debt back enforced or incentivised?


Right now we expect most loans will be fully collateralized by other crypto-assets. So the default deterrence would be that if you don't pay back your loan, you lose your collateral.

We also support unsecured loans (i.e., loans that are not fully collateralized). We consider these pretty experimental and lenders should do a lot of diligence before investing.

For unsecured loans, counterparties can agree to any kind of default deterrence that they want. Could be off-chain legal agreement, could be a reputation scheme, etc.


What exactly is the use case for a 100% secured loan?


Even if you 100% collateralize, you can get 2x leverage. That leverage can be applied to all sorts of use-cases, but we think one of the main ones that will be common today is speculative margin trading (e.g., short selling)


So basically, like all crypto it’s just another layer of speculative trading, fraud and scams all the way down?

Congratulations, I guess...


Collateral is staked ahead of time


Your product looks interesting and I really like the website. I'm going through the Tutorial and it is AMAZING. I like that you put in the time to make it game.

Do you think that your product would be useful for Insurance contracts on the Ethereum blockchain?


Thank you! Glad to hear that you enjoyed the tutorial.

There are numerous ways in which Dharma debt agreements can interface with insurance contracts:

1. We've already seen some members of our developer community working on trustless credit default swaps -- which are functionally insurance contracts that use the programmatic endpoints of Dharma debt agreements to assess claims on defaults. 2. For non-fully-collateralized insurance contracts, Dharma debt agreements can serve as the mechanism for tracking and administering the tokenized bonds that capitalize the insurance contract.


Is there any simple explanation of what exactly it is? I tried to understand it by reading various places on site but too heavy words used like credit liquidity, tokenized debt. When you are targeting normal people can you explain how exactly this works? Is it like I give bitcoin/ethereum and you give me fiat money and when I repay fiat money you give my bitcoin/ethereum back?


This looks really neat! - I was talking to a friend about something similar to this a few weeks ago.

It looks like you'd need to trust the counterparty right now unless they put up substantial collateral. Do you intend to add something similar to a credit rating / history to make it possible for random strangers to lend to each other? Or do you have other ways to handle this?


Thanks for the kind words!

In the short-term, as you correctly alluded to, we're focused on loans that are fully-collateralized on-chain. In the future, however, we hope to integrate trusted third-party underwriters into the network in order to open the door for unsecured loans. There are many technical / game theoretic challenges to be solved on this front, though, so we've included unsecured loans as an "experimental" feature set in this initial release.


Is a public marketplace in the works? Right now you have to paste a json string from the counterparty.


Yup -- there are several. The most mature relayer project on Dharma we're aware of is Bloqboard (bloqboard.com), though I believe they are not ready to launch on mainnet quite yet.


Shouldn’t money be Dukka, not Dharma? Or is money too often an amoral scapegoat for many individual acts of greed?


When one lends cryptocurrency I assume the loan comes with an interest? Given the fixed supply of bitcoins or what have you, where will the coins to pay the interest come from? Or does it work differently in cryptocurrency world? Genuinely curious.


I'm not the op, but fractional reserve lending isn't the only form of lending, and fixed supply isn't the only form of cryptocurrency.


Beat me to the reply :)

Indeed, even with a fixed supply token, a borrower would simply have to come across the necessary amount of principal + interest in the loan term.


But that's kind of the point, isn't it. With the fixed supply the "+ interest" would be harder to come by. Wouldn't it lead to elevated levels of defaults?


One way or another, the borrower has to come up with the principal + interest or they will forfeit their collateral. So they will want to use the loan in some sort of income generating capacity: financing a project, speculative trading, etc. If they are able to use the loan to earn more than the interest rate they've committed to, they'll make money overall. If not, they'll lose money.

Bottom line: we don't think the monetary policy of crypto-assets will have much of an impact on default rates in the short term.



https://plex.dharma.io/request spins forever... website down?


Are you using a web3 browser? Chrome+metamask, cipher, toshi, brave, etc.


What does this have to do with helping all sentient beings to awaken in this lifetime?

Consider a name change.


How is this different than SALT and MakerDao?


Similar to the question about SALT and EthLend, these are both applications. See our answer there fore more details.

Re. MakerDao, they offer one type of loan, the Collateralized Debt Position, in which a borrower collateralizes ETH and the principal is denominated in DAI. And they have built in many automated mechanisms to keep DAI stable against the value of a US Dollar.

Dharma can support a similar use-case (getting liquidity on crypto-assets without selling them) -- you would collateralize any currency and borrow in DAI. That way you can get fiat liquidity today, but if you pay back your loan on time you can still benefit from appreciation of the asset you collateralized.

In addition, Dharma is capable of supporting other lending use cases: short selling, speculative leverage, venture debt, corporate bonds, muni bonds, etc. etc. We are a platform for any kind of debt agreement and for companies that want to issue these debts.


How is this different from EthLend or SALT


EthLend and SALT are both lending applications. While we have created a lightweight lending app in Dharma Plex, our core offering is Dharma Protocol.

Dharma Protocol is a suite of developer tools that enables entrepreneurs to create apps like Ethlend or SALT easily and securely. It's open source and entirely free to use.


Ah thanks for the response. What's the business model?


We discuss our business model a bit in this blog post: https://blog.dharma.io/dharma-isnt-currently-doing-a-token-s...

Happy to discuss more, but that's a good start


You don't really though? Unless I missed the bit on how you want to get payed. All I see is 'building a great open source infrastructure', which while I applaud and is noble, is not widely accepted to pay rent so far


Ha, you're right, sorry. We think we'll be able to sell value added services to our ecosystem (for example, consulting services, insurance, data feeds, etc.).

We will also investigate token models to see if there is a way to make the underwriting process less trustful, and this token model may be a revenue generator as well.


lot of components did not load on initial landing of the page on FireFox Nightly 62.0a1


Thank you for pointing this out -- I've flagged our team and we're looking into it.


How do you make money?


You may ponder longer on the name. As the comments in this thread show, not everybody is happy with your capitalizing on a word that for centuries was at the center of Buddhism.


Love the idea


`dharma` is the term we buddhists use to designate the (sacred) teachings of Buddha. Would you use `Coran` or `Bible` to name your project? Probably not. It would have been a good idea to take more time to reflect on your choice of name.


I'm also a Buddhist (a savaka, technically). I have no issues with the name. If the name causes one person to learn what the Dharma is and to stop harming themselves and others, that's a great thing.

It looks like a cool project too.


The main things that give me pause are (a) unadorned use of the word out of context and (b) the general level of scamminess I associate with crypto projects.


I take all cryptocurrency projects case by case. This one appears straight up as it's proposing an actual protocol and the associated token actually addresses a problem. Being YC backed ups its cred too.

But yeah, 95% of all ERC-20 tokens are BS.


..or the name becomes so diluted by it's usage everywhere, where appropriate and not (like a name of lending platform), that it loses all meaning. Like word Zen by now.

The only reason people began using words like Zen, Dharma, Buddha, Nirvana for commercial products that had nothing to do with the meaning of these words is because these words had certain power to them that businesses wanted to capitalize on. Like a brand, if you will. That power was given to these words by countless compassionate acts and lives of many remarkable individuals, so that these words may guide someone who is seeking close to the answers.

Making a financial platform using that name is just disrespectful. It's like naming your dog with your mother-in-law's name. Not an end of the world, but still, pretty distasteful.


> The only reason people began using words like Zen, Dharma, Buddha, Nirvana for commercial products that had nothing to do with the meaning of these words is because these words had certain power to them that businesses wanted to capitalize on.

Or Karma. That one really has been beaten to death online (and offline too).

But in the end they're just words, they mean what we want them to mean and words were always fluid, you can't nail them down and expect them to remain nailed down over a long period of time.

Just a few more examples: gay, mouse, dial, heaven, respect and so on. That some people assign more value to some words than to others is the root cause of a lot of misery in the world.


This.


The word dharma means one's duty according to their place in their cosmic order. Assigning it to sacred teachings of anyone is not correct. There is a word _dhammam_ in pali lang that is from around the area buddha lived, which has different meaning from dharma, is used to refer budhha's teachings.


I'm sorry but Dharma in its original context, that being India, is far more a broad term than simply a religious one. For example the conduct of the corporate form in Ancient, and Medieval India was often defined by certain publicly stated terms that the corporation/guild and its members had to follow, this was called "Sreni Dharma" (Sreni being the guild/corporation, and Dharma being the terms it must conduct itself by).

So Dharma is a very broad term, and quite apt in this case.


Thank you for voicing your uneasiness with the name. Dharma in Hinduism connotates ""right way of living". I am aghast that what is sacred to us reduced to a marketing tag line.

Couldn't these people look up wikepedia, https://en.wikipedia.org/wiki/Dharma , to realize this name for a crypo app is not going to go well ? Or are they intentionally tone deaf ?


The idea of Hinduism is nonexistent. What unifies all "religious" and scientific/mathematical theories in India, is the fundamental idea of Dharma. Sikhism, Jainism, Buddhism, and the various schools that are characterized as "Hinduism", all in one way or another layout vast theories about "Dharma" is, and give their own varying definitions of it.

Calling this a "Dharma Protocol" is more apt than people think, and I'm glad that you used the term.


The fundamental ideas of Sikhism , Jainism and Buddism are not equivalent and Dharma in in each of these religions means aderence to their idea of the righteous way.These ideas are distinct and practitioner of these religions would dissmiss your theory of unified dharma. There are several Sikh scholars that I know of who could help you with your understanding of Sikhism and how it is different from Hinduism. However, a visit to a Sikh temple would be a better idea.

>>idea of Hinduism is nonexistent This assertion is breathtakingly arrogant . Granted that Hinduism does not fit neatly within the traditional Judeo Christian definition of religions but this is absurdly ignorant. The Brits and the Portugese tried tried very hard to erase Hinduism and failed.( The Portugese went so far to claim Hindus dont have souls -- but that is a discussions for another day). Please note that I do not speak for Hinduism but your assertions are too absurd to ignore.

To give you an analogy -- you are saying the idea of apples is nonexistent. There are RoyalDelicious, Gala, Honeycrisp etc etc, -- but there is no apple .

My initial objection was to crpto snake-oil salesmen using eastern sounding names to disguise their snake oil and sadly they will succeed until this baloon pops.


I never said that each were equivalent, I'm saying that they're using the same vocabulary to describe and translate their ideas. That's it.

That is to say there is no universal, central, or dogmatic theory of "dharma", nor perhaps a central agreed upon theory of Dharma, just a vague conception of what it is for each individual interpreter. Whether that interpreter be Buddha, Nanak, Shankaracarya, or the various other Indic philosophers is irrelevant. What unifies them simply is the technical language used to describe their philosophy, and define their own ideas.

So no. I'm not saying all religions in India are the same. All I'm saying is that the various philosophers within that geography used a similar set of vocabulary, and a similar set of ideas to construct their own thought structures in competition, opposition, or in general progression with each other.

So in that sense, there is at least something that makes them closer to each other than they are separate.


>> What unifies them simply is the technical language used to describe their philosophy, and define their own ideas

Nearly all religions use the same technical language to spread their ideas. Islam, Hinduism,Sikhism, Christianity -- all of them -- talk about God, meaning of life , yada yada yada. Does that make them closer and their philosophical differences trivial?

You had begun your argument by saying that the idea of Hinduism doesn't exist . Now you are claiming all religions are closer than they are separate. You are changing the subject.

Though I would agree that most adherents of any religion would not like their language to be used for selling Crypto hokum. If these guys had called themselves "Gospel protocol", almost everyone would see through them.


Here how about this. What do you think of the term "dharma" being used in the context of the corporate form/guilds in India? It is a well documented fact that Srenis would have to declare their Dharma by which they, and their members, had to abide by, and was sanctioned by the Monarch. This was simply called Sreni-Dharma.

Furthermore that's a false equivalence as they do not use the same vocabulary. I challenge you to find any of the Sanskrit based word in any other religions around the world other than the ones found in India, and no translations do not count. That is to say Indic religions have their own jargon.

So no. Not ALL religions are closer to each other. Just the ones in India. There's NOT a single unifying factor that united Indian religions. So yah. There's a great difference between Vaishnavs, Shaivites, Mimamska, Nyaya-kins, Shaivites in Kashmir, Tantrics of Himalayas, Lingayats, Arya-samaj, Bhakti, ISKON, etc. There's, I believe, literal thousands of philosophically nuanced schools of thought that are incredibly different from each other. So again, please tell me where Hindus are the same. Again the ONLY thing, remember, ONLY, is the vocabulary, ideas, etc. that these philosophically distinct ideas share. That's it.


>>It is a well documented fact that Srenis would have to declare their Dharma by which they, and their members, had to abide by, and was sanctioned by the Monarch. This was simply called Sreni-Dharma.

I am not sure as to how this is relevant. Shrenis were guilds and shrenidharma obviously refers to a code of conduct for members. This could have been relevant to use in this context except that it is clearly half assed attempt to use an ancient word. Dharma should have been used as suffix in this context; shrenidharma = guild + rules. Other exmaples of use are atithidharma, kuladharma etc... So not only are they appropriating "Dharma" to make themselves look cool, they are also using it incorrectly.

>>There's NOT a single unifying factor that united Indian religions...so again, please tell me where Hindus are the same

This is simply not true. Take tantra for example ( I am not sure about Himalayan Tantra ) Tantrik traditions and scriptures are derived from both Shaivites and and Vaishnavs, with neither schools laying exclusive claims on Tantrik tradtions. I am not alluding to Buddhist Mahayana 's tantrik traditions.

Arya Samaj grew as a reformation of the 19th century Hinduism. My grandfather was a Arya Samaji but not my grandmother who was a vaishnav. The one thing that western scholars of Hinduism often miss is the fluidity of devotion -- by that I mean Hindus are equally at ease in perfoming pujas of deities from diffent schools. In hindu households, you will find Rama, Shiva , Ganesha , Durga and Krishna and they would all be worshipped. The differences of interpretation of Geeta and Vedas are left to scholars to argue but to claim that they have nothing in common is just wild exaggeration.


Sikhs worship Shakti and Gurunanak makes references, even praises, "Hindu" gods, ideas, and symbols. Does that make them Hindus as well?

Furthermore, you do agree that Dharma isn't just a religious term. Right?

But I do agree with you on appropriation. Indians need to own the term, and define what it is, so that Sanskritic/Indic terms used in the west are well defined. In that sense a sort of sanskritization* of English can take place, just as there's a latinization of Indian languages.


Perhaps you are conflating the relationship between Sikhism and Hinduism with relationship between Vaishnavs and Shaivites. Sikhism categorically rejects Hinduism and I would respect their wishes. Vaishnavs, Shaivites, ISKON jostle/debate to be viewed as the true interpreters of the scriptures. They do not reject their relationship. And that makes them Hindus.


Speaking as another Indian, I am not offended at all.


There are a ton of products named “The X Bible” where X = photoshop, c++, whisky...

I don’t think it’s particularly controversial but then again I’m not a Christian.


In general, no, we don't find it offensive. The word "bible" is simply from the Greek word for book or books.


I believe almost all of these 'sacred' terms have totally pedestrian etymological roots.

Bible = book. Koran = recitation. Dharma = decree or custom. Karma = fate. Christ = anointed.

Another interesting semi-related one I remember about the Bible: the "Virgin" Mary was translated from the Hebrew "almah", which just means a young unmarried woman (not necessarily a virgin in the way we define it).


Interesting, I didn't know the origins of the words Koran or Dharma.

I don't know much about biblical hermeneutics, but wasn't the New Testament written in Greek? Also, based upon Church tradition and history, even if the word didn't explicitly mean virgin, it is certainly understood to mean it with relation to Mary.


https://en.wikipedia.org/wiki/Almah#Bible_usage

It looks like the Greek version is the point where 'almah' got translated as 'parthenos', a word that more specifically means virgin.

It's definitely become a key part of the tradition. I'm now agnostic, but went to a Catholic school growing up, so I know well how much importance is placed on it. I've just always found it interesting how such a core belief of the most popular religion in history might (or might not) have been based on a simple mistranslation.


How would you feel about Bible.io being a company page for a crypto project promoting the Bible protocol? You have to admit it sounds a little confusing, no?


What if it were, say, “the C Bible?”


Sure, naming a cryptocurrency protocol "Bible" would be confusing at first. But if it was meant to be the Bible of protocols or the one protocol to use, I would understand the gist of its name.


There is JesusCoin https://jesuscoin.network/


As a lighthearted differentiator I was going to have “The RSS Koran” instead of “The RSS Bible” but I got death threats


Maybe you don’t realize but this name is offensive to Buddhists...

It’s like an insurance company calling itself “Gospel”


'Dharma' in Hinduism means 'Religion'. It's just a use case of the word, and as a Hindu, I don't find it offensive at all and I'm sure others feel the same.


> It’s like an insurance company calling itself “Gospel”

Is that offensive? Doesn't seem like it to me.


Does “disrespectful” instead of “offensive” satisfy your need to play semantics?


Please don't cross into incivility in Hacker News comments.

https://news.ycombinator.com/newsguidelines.html


What about it is disrespectful, and why should anyone care? It’s true that if you look hard enough, you’ll always find an offended party, but so what?


This is a successful global branding strategy...NOT!


No, it doesn't, since I don't think it's disrespectful either.


Insurance would be fine (though Christians might suggest "Numbers" as a more accurate biblical name.)

I think as a business they'd have more of an objection to Christianity being associated with moneylending.


There are no buddhists in the US, so that's fine for now.


Nadav,

"Dharma" is widely recognized as the term to denote the teachings of Buddha. I feel the use of the term in this new context is cultural misappropriation.

Would you care to address that concern with your thoughts on the topic?


Not the author here, but Dharma has several other meanings in Indian languages. A predominant one is virtue, righteousness, and duty.

I hardly think of this usage as cultural misappropriation; just loanwords from a different language.


... said schaefer, on a site that calls its comment scoring "karma."


One persons's cultural mis-appropriation is another one's wealth. Mis-appropriation is how words spread historically, I don't think you're going to stop that from happening.




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