It's becoming increasingly difficult to tell which platforms and people have good intentions online, especially with the rise of automated content and anonymous profiles. Some of his Web2.0 companies, such as Uber, Amazon, and Airbnb, offer rating systems for businesses and individuals, but these kinds of systems are rare in his Web3 world.
But Karma3 Labs is hoping to change that with $4.5 million in new funding backing its decentralized reputation protocol OpenRank. Sahil Dewan, founder and CEO of Karma3 Labs, exclusively told TechCrunch that this is the protocol's first funding.
The round was led by Galaxy and IDEO CoLab Ventures. Additional investors include Spartan, SevenX, HashKey, Flybridge, Delta Fund, Draper Dragon, and Compa Capital. This funding will be used to help expand adoption of OpenRank and release early versions of the protocol to developers.
“We are serious about solving the issue of trust and security in cryptocurrencies,” Dewan said. “After the last [crypto] The bull market, DeFi and NFT mania happened, and many people got into cryptocurrencies, but many were getting scammed. ”
There is no reputation system in Web3's decentralized world, so it's difficult to know which organizations and individuals to trust and rely on, Dewan says.
Since the birth of the Internet, peer-to-peer environments have existed where businesses and individuals can publish and purchase anything. But these companies have an advantage. “You can derive value from your users, define the rules of what is right and wrong, and sit back based on data,” Dewan said. “This is not a public good, but a transactional relationship between centralized actors and users.”
Decentralizing the ratings and reputation system is important because no single entity will own the reputation scores and be able to manipulate or change them, Dewan said. OpenRank helps developers and their Web3 protocols launch consumer apps, communities, and marketplaces using open rankings and recommendations without the need for a centralized organization to run it. It is intended to support you. “We wanted to create a protocol and a generalized system so that anyone could build a reputation system, not just as a source of trust,” he said.
This could create a foundation for online peer-to-peer interaction and ownership of community evaluation.
The OpenRank protocol allows developers to use its “reputation graph” to rate, rank, and recommend applications and communities. This means developers, consumer applications, and marketplaces can integrate specific rankings and recommendations, while leveraging rankings and reputations from other ecosystems and communities to build their own foundation. .
First, OpenRank works with MetaMask Snap. Provides ranking and recommendation APIs for Lens and Farcaster. It will also support consumer apps, crypto wallets, and on-chain discovery feeds for reputation-based voting and governance, Dewan said.
“It can be posted internally or used behind the scenes to power search and recommendations. It's up to the developer,” Dewan said. “We're not going to tell them what number to give. We want to create a ranking system that can be used for any utility you want to provide to your end users.”
The protocol also plans to introduce “resistance mechanisms” to prevent malicious actors and fraudsters from trying to trick the system by wash-trading or sharing malicious links.
Reputation also helps reduce search and discovery costs on-chain or within the crypto ecosystem, Duwan said. “If nothing is rated, you don't know what to buy or trust. Without rankings, you don't get the kind of user engagement you see with Web2.”
These rankings may be relative or specific to different people. What you see based on one person's recommendations may not reach others based on your past interests and interactions. “Today, you can't argue with anything that Google or Amazon presents,” he says. “However, there is a market for third-party developers to create new ranking systems that provide guidance to help us select and show the most value to our users.”
In the short term, the startup plans to continue working with its launch partners and open OpenRank for people to discover, buy, and vote for things they trust on-chain. The next goal is to open the protocol to third-party developers who want to implement ranking and reputation systems.
“Over time, we are aiming for a self-service model for OpenRank, so that developers can create their own rankings without permission, without having to struggle with data or computing,” Dewan said.