Dharma is a user-friendly layer that sits atop the Compound Finance protocol, enabling users to more easily participate in DeFi lending markets.

Getting involved in the DeFi ecosystem requires specialized knowledge and a deep understanding of cryptocurrency exchanges, wallets, and more. Dharma aims to enable non-technical users very new to crypto to earn interest on stablecoins like Dai without any complexity.

With Dharma, US users can begin earning interest immediately, simply by using their debit card. Funds are held in a non-custodial “smart” wallet, which continuously earns interest on deposited assets. The project utilizes dTokens, a wrapped version of Compound Finance’s cTokens.

Dharma has previously offered their own lending platform with fixed interest rates and terms but chose to rework their business model in 2019.


Dharma was founded by Brendan Forster and Nadav Hollander, a software engineer who has interned at both Coinbase and Google. The first whitepaper for the project was published in November 2017.

In contrast to many projects in 2017, Dharma did not hold an ICO. The project instead opted for a traditional seed funding round, raising a modest US$120,000.

The first Dharma product – a margin product called Dharma Lever – began development in late 2018. The product was launched to support the lending and borrowing of ETH and USDC exclusively, focusing on providing a simple user experience.

Dharma Lever differentiated itself from other platforms by offering fixed interest rates and fixed-term loans, in contrast to typical floating rates and durations. Lever saw strong initial growth, passing $1 million in liquidity within its first 24 hours.

Whereas Dharma and Compound Finance initially began as competitors, Dharma decided to settle on becoming a layer on top of the Compound protocol in 2019.

Why Dharma?

Dharma is a platform which caters directly to those with little knowledge of cryptocurrency, but still want to take advantage of promising DeFi interest rates.

As a user-friendly layer on top of the Compound protocol, Dharma adds value to the DeFi lending experience through a few key factors:

Easy Access

Using Dharma is just as easy as creating an email account. All that one needs to get started is their name, country, and email address.

Unlike most DeFi platforms, it requires no existing wallet, browser extensions, or other additional tools. Log-in is done via a simple email address and password.

Simple Wallet, High Security

Dharma provides users with their very own new cryptocurrency wallet, which automatically earns interest on any Dai or USDC that it holds.

It provides a “security backstop”, by requiring confirmation and approval of withdrawals by Dharma. This ensures that a compromised account or device does not result in the loss of funds.

The Dharma team also offers assistance in recovering lost accounts, for those who lose their device or passwords.

Fiat Gateways

Depositing and withdrawing fiat currency into Dharma is extremely simple! US customers can simply fund their wallets using a debit card, and withdraw to their US bank account as desired.

How Does It Work?

To get started, visit https://app.dharma.io/sign-up?

Creating an account is simple – a user simply enters their details and email address and selects a password.

That’s it! From here, a user simply deposits funds to begin earning interest. Click “Make a Deposit”.

A user will select if they want to fund their account with fiat currency via debit card, or simply deposit cryptocurrency from an existing wallet. Bank transfers will be available in the future.

To make a deposit via debit card, a user will enter the amount they wish to deposit and click “Continue”.

A form will appear to enter the appropriate debit card details, to complete the deposit.

Alternatively, a user can simply deposit their Dai or USDC from an existing cryptocurrency wallet. Tokens can be sent using the QR code or personal wallet address in the colored box.


Dai and USDC tokens provided by users are supplied to the Compound protocol. This means that rather than directly holding the actual crypto assets in their wallets, Dharma users are issued with “dTokens”.

dTokens work in a similar manner to cTokens – which represent a claim on the assets supplied to the protocol. In fact, dTokens are simply a “wrapped” version of cTokens. This enables them to work almost exactly the same as cTokens, but with a twist: dTokens retain one-tenth of all interest earned, as revenue for Dharma.

The dToken mechanism works in the background, so users don’t need to worry about them. They’re automatically issued and automatically redeemed for the original assets upon withdrawal.

Which tokens does Dharma support?

Dharma is primarily focused on stablecoin lending. At this time, Dharma supports Dai and USDC.

How to get involved?

To keep up with all the latest Dharma news and releases, follow them on Twitter, or join their Discord.

For in-depth articles and more, follow the official Dharma blog.