If ethereum is the protocol for decentralized global finance, then it’s going to need a lending tool built just for crypto.

That’s the thesis of Dharma Labs, which built the Dharma protocol for decentralized lending businesses. Its first product, Dharma Lever, is in a closed alpha release now, enabling loans for traders and large crypto holders.

Now the startup has secured $7 million to build out the product in a round led by Green Visor Capital, a fintech-focused venture capital firm. Other participants include Coinbase Ventures, Polychain Capital, Y Combinator, Passport Capital, Blockchange and Ripple’s Xpring fund.

Dharma CEO Nadav Hollander said in statement:

“In the same way that Uber made it both easy and cheap to get a ride from anywhere in the world, we believe Dharma Lever will make accessing margin lending easy and cheap for anyone in the world.”

Dharma Lever’s website promises a few advantages over the existing solutions for credit in crypto, a service that is expected to be primarily used for traders to make investments on margin. It works directly from a trader’s wallet, without the need for a special extension.

Loans are all made trustlessly, governed by smart contracts. Dharma Lever also promises better loan rates over those offered on exchanges.

“Without a central point of failure, Dharma’s financial services simply ‘can’t be evil,’” the company said, with a wink toward Google.

The company plans to use the investment to expand its engineering and growth teams, according to a statement.

Growing ecosystem

The gold rush has gotten a lot slower, but more shovel shops are opening.

There’s been a slew of new companies emerging to offer crypto versions of existing, well-established financial products. For example, Compound is building a money market for crypto. Paradigm is building a decentralized order book. Caspian is building a more sophisticated backend for crypto trading and investment operations.

This increasing robustness could be key. Research out of the University of Queensland suggested that crypto lacks the adequate liquidity to find accurate prices.

Indeed, Mike Walsh, general partner at Green Visor, said in a press release:

“In an industry where economies are natively digital, we believe Dharma’s technology will become a necessary piece of infrastructure for future growth.”

Fellow-investor Coinbase Ventures echoed that sentiment. Emilie Choi, the Coinbase VP who runs the ventures arm, told CoinDesk:

“Dharma’s lending product makes it easy for developers and people to create loans that are trustless and managed on-chain. We view companies like Dharma, and their Lever product, as a sign that the crypto ecosystem is maturing, and an important step on the path to a more open financial system.”

Noting that Hollander, Dharma’s founder, is a former Coinbase engineering intern, Choi added, “We’re proud to support our alumni as they progress in their crypto careers and make new and novel contributions to crypto.”

Update (Feb. 5, 18:05 UTC): Blockchange and Ripple’s Xpring fund were also involved in the funding round.

Zack Seward contributed reporting.

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