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Karma3 Labs secures $4.5m funding to develop OpenRank

Karma3 Labs has managed to gather $4.5M in initial funding. It was spearheaded by Galaxy and IDEO CoLab Ventures. Their goal is to create OpenRank, a newly conceived reputation system with no central authority.

OpenRank allows developers and web3 protocols to enhance user apps, communities, and marketplaces. It offers an open, secure ranking and recommendation layer. It encourages users to make safe on-chain decisions without relying on central authorities.

Empowering decentralized trust systems

OpenRank has been put to some interesting uses early on. For instance, it’s been used to create a community rating system for App Marketplaces such as Metamask Snaps.

It’s also been employed to develop ranking and recommendation APIs for tools like Lens and Farcaster. In addition, it’s been used to build on-chain discovery feeds for consumer applications and wallets and reputation-based voting and governance mechanisms.

Trust and reputation systems are as vital for web3 as for web2. These systems play a significant role in decentralized peer-to-peer utility, which countless examples demonstrate.

Think about it this way: Uber revolutionized taxi services with driver ratings; AirBnB shook up the hotel industry with host ratings; eBay changed the shopping scene with seller ratings; Reddit opened up community forums with user karma badges; Google tapped into the decentralized web with PageRank.

However, one key challenge these services face is the issue of control – in all cases, a single organization controls the reputation scores. We need reputation systems that aren’t controlled centrally to avoid this concentration of power. These systems should be open to everyone, adaptable to different situations, resistant to fraudulent scores, and, importantly, built with open-source software.

OpenRank’s vision

Imagine a situation where anyone could use a system like Twitter’s Community Notes. But instead of being owned by one company, it’s open and affordable for any developer. Plus, developers get to choose their algorithm. That’s what this protocol is aiming for.

Sahil Dewan, founder and CEO of Karma3 Labs, expressed the need for a robust reputation system to pave the way towards an internet characterized by fairness and transparency. Dewan shared his excitement about onboarding builders and developers for OpenRank, asserting their need for a decentralized reputation protocol to empower on-chain social and consumer experiences.

OpenRank provides developers with unrestricted access to Reputation Graphs. These graphs are helpful for rating or suggesting practical applications or social communities.

You can create these graphs using on-chain data or any data from peer-to-peer social connections. With graph algorithms like EigenTrust, OpenRank allows for trusted and reliable calculations on these reputation graphs.

OpenRank uses complex systems, known as zero-knowledge proving, to carry out graph algorithm computations. It means developers can use any on-chain data – that is, data linked in a public or private network – relevant to their application without concerns about the expense or trustworthiness of the computation.

OpenRank’s funding success

According to Mike Giampapa, a General Partner of Galaxy’s venture team, OpenRank is a crucial development in web3 social and on-chain interactions. Drawing a comparison, Giampapa highlights the evident influence PageRank has wielded in web2, suggesting that an equally significant reputation primitive can be built on-chain.

Expressing his anticipation for the future endeavors of Karma3 Labs, he speaks highly of their creation, OpenRank. Giampapa concludes by sharing his pride in spearheading the company’s seed round.

Karma3 Labs’ recent funding round secured a remarkable $4.5M. This round was led by Galaxy and IDEO CoLab Ventures and included contributions from numerous parties, such as Spartan, SevenX, HashKey, Flybridge, Delta Fund, Draper Dragon, and Compa Capital.

In addition, this finance influx included angel investors from Xooglers Fund and skilled individuals from Coinbase, ConsenSys, IPFS, Dune Analytics, and the Harvard Crypto Lab.

With these new funds, OpenRank can take off. They plan to use it to increase their early adoption rates and to launch protocol v1 for developers. This is more than routine business expansion; it’s a leap toward the future of reputation computation that is permissionless and verifiable.