It is increasingly difficult to distinguish between platforms and individuals with good intentions online, especially with the rise of automated content and anonymous profiles. While some Web 2.0 companies like Uber, Amazon, and Airbnb offer rating systems for businesses and individuals, such systems are scarce in the web3 world.
But Karma3 Labs aims to change that with $4.5 million in funding supporting its decentralized reputation protocol OpenRank. This marks the protocol's first fundraising round, as revealed exclusively to TechCrunch by Sahil Dewan, founder and CEO of Karma3 Labs.
The funding was led by Galaxy and IDEO CoLab Ventures, with additional investors including Spartan, SevenX, HashKey, Flybridge, Delta Fund, Draper Dragon, and Compa Capital. The funds will be used to drive the adoption of OpenRank and facilitate the launch of the protocol's initial version for developers.
Karma3 Labs is committed to addressing trust and safety issues in the crypto space, following the DeFi and NFT craze that brought both excitement and scams into the market. With no reputation system in the decentralized world of web3, it is challenging to determine which entities and individuals are trustworthy.
OpenRank aims to offer developers and web3 protocols the capability to launch consumer apps, communities, and marketplaces with open rankings and recommendations, without having to rely on a centralized entity. This decentralized approach prevents manipulation or alteration of reputation scores by a single entity, fostering peer-to-peer interactions and community ownership of online ratings.
The protocol provides Reputation Graphs that developers can leverage for ratings, rankings, and recommendations in various applications and communities. OpenRank is already collaborating with Metamask Snaps, offering APIs for Lens and Farcaster while supporting on-chain discovery feeds for consumer apps, crypto wallets, and reputation-based voting and governance.
OpenRank plans to implement mechanisms to deter bad actors or scammers attempting to exploit the system. Ratings not only aid in reducing search and discovery costs within the crypto ecosystem but also enhance user engagement by providing valuable rankings.
In the short term, Karma3 Labs intends to expand its collaborations and enable any third-party developer to implement a ranking and reputation system using OpenRank. The ultimate goal is to establish a self-serve model for OpenRank, allowing developers to create their own rankings effortlessly.
