Dharma Labs

Dharma Labs was a San Francisco-based crypto company founded by Nadav Hollander and part of Y Combinator's Summer 2017 batch. Its initial product was Dharma Protocol, an open suite of protocols, standards and developer tools for issuing and administering tokenized debt agreements on the Ethereum blockchain. Following three external security audits of its smart contracts, the company released a public beta of Dharma Protocol v1 on Ethereum mainnet, with developer documentation at docs.dharma.io and a consumer-facing borrowing and lending interface called Dharma Plex. The tools were described as fully open source and free to use, with no native Dharma token required of users.

The company later shifted to a consumer mobile wallet. Dharma marketed itself as an Ethereum wallet able to move money between any US bank account and decentralized exchanges such as Uniswap, positioning the app as a fiat on-ramp into DeFi and describing its scope as access to 74,000-plus tokens purchasable with USD, plus DeFi yield opportunities. Contemporaneous coverage described the product as a smart wallet where users could store, borrow and lend digital assets and connect bank accounts to purchase and swap tokens.

In January 2022, OpenSea announced it was acquiring Dharma Labs. Terms were not disclosed; press reports cited Axios rumors of a $110-130 million price. Dharma announced its app would shut down within 30 days, with users urged to transfer or sell tokens held in their wallets and the company promising to cover network fees; users who did not empty wallets in that window would retain access via an open-source DApp while paying their own gas fees. Founder and CEO Nadav Hollander became OpenSea's chief technology officer, and COO Brendan Forster became head of strategy. YC's profile lists Hollander as most recently CTO at OpenSea and now working on something new.

Founding story

Founder Nadav Hollander traces the idea to a 2015 Stanford course on Bitcoin and cryptocurrencies taught by Dan Boneh, followed by an engineering role at Coinbase. There he noted that users' crypto largely sat idle in cold storage instead of being deployed like dollars in a savings account, and saw programmable blockchains such as Ethereum as a way to build borrowing and saving infrastructure without an intermediary company sitting in the middle.

Business model

Initially an open-source protocol and developer-tooling play: Dharma published smart contracts, standards and tools that third-party developers could use to build lending applications tapping a shared pool of credit liquidity, explicitly without a native token. The later business was a consumer mobile wallet app acting as a fiat on-ramp between US bank accounts and decentralized exchanges. Sources do not state how the wallet monetized.

Not established by the sources for the crypto wallet and protocol business.

Traction

YC lists a team size of 14. Marketing copy claimed access to more than 74,000 tokens purchasable with USD. No user or revenue figures appear in the sources.

Latest developments

OpenSea announced the acquisition of Dharma Labs on 18 January 2022; Dharma said it would shut down its app within 30 days, halting token swaps and purchases and asking users to move or sell holdings. Nadav Hollander joined OpenSea as CTO, succeeding Alex Atallah in that function, and COO Brendan Forster became head of strategy. Reported deal value was undisclosed, with press citing rumors of $110-130 million.