Open reputation protocol Karma3 Labs has secured USD 4.5 million in fresh capital to increase trust in web3 with ratings and recommendations. The USD 4.5 million funding round was led by Galaxy and IDEO CoLab Ventures.

Additional investors include Spartan, SevenX, HashKey, Flybridge, Delta Fund, Draper Dragon, and Compa Capital. The capital will be used toward growing the adoption of OpenRank, Karma3’s decentralized reputation protocol, and helping launch the protocol’s initial version to developers. Navigating trust in the digital age It’s becoming harder to discern which platforms and people have good intentions online, especially as automated content and anonymous profiles are on the rise.

Some Web 2.0 companies like Uber, Amazon, and Airbnb offer rating systems for businesses and individuals, but those types of systems are few and far between in the web3 world. Officials from Karma3 Labs said they are focused on solving trust and safety issues for crypto. After the last [crypto] bull market, the DeFi and NFT mania happened, and a lot of people came into crypto, but a lot of people were getting scammed.

There’s no reputation system in the decentralized world of web3, so it’s hard to figure out which entities and individuals to trust and depend on. Since the internet’s inception, there have been peer-to-peer environments that allow businesses and individuals to publish and buy things. But these businesses have an advantage: They can take the value from users, define the rules of what’s right or not, and keep the data.

It’s not a public good, but transactional relationships between centralized parties and users. Fostering trust through decentralized reputation systems Decentralization of ratings and reputation systems is important because it prevents a single entity from owning the reputation scores and being able to manipulate or alter them. OpenRank aims to help developers and web3 protocols launch consumer apps, communities, and marketplaces with open rankings and recommendations, without the need for a centralized entity running it.

Karma3 Labs aims to create a protocol and generalised system, not as a source of trust, but for anyone to come and build reputation systems. This could create a foundation for peer-to-peer interactions and community ownership of ratings online. The OpenRank protocol allows any developer to use its ‘Reputation Graphs’ for ratings, ranking, or recommendations for applications or communities.

This means developers, consumer applications, and marketplaces can integrate specific rankings and recommendations, while also leveraging rankings and reputations from other ecosystems and communities to build a foundation for their own. How OpenRank works? To start, OpenRank is working with Metamask Snaps; providing ranking and recommendation APIs for Lens and Farcaster; and helping with on-chain discovery feeds for consumer apps, crypto wallets, and reputation-based voting and governance. Ratings also help reduce the cost of searching and discovering that’s on-chain or in the crypto ecosystem.

The protocol also plans to put ‘resistant mechanisms’ in place to prevent bad actors or scammers who try to cheat the system by wash trading or sharing malicious links. These rankings can be relative and specific to different people. What may pop up on one person’s recommendations might not reach others, based on their past interests and interactions.

.