Reputation DAO, a verifiable, decentralized and programmable reputation service for DeFi, has today announced it has raised US$4.75 million (EUR€4.365 million) in seed funding investment from DACM, AirTree Ventures, Koji Capital and Framework Ventures. Sergey Nazarov, co-founder of Chainlink, has also joined Reputation DAO as an advisor.
DeFi markets continue to grow rapidly, with the total value locked rising to $200 billion at the beginning of 2022. However, the absence of reputation and identity services in DeFi, combined with lending platforms requiring >100% collateralization, means that the potential capital that can flow into DeFi is limited.
Reputation DAO is building the fundamental infrastructure, powered by Chainlink, for a comprehensive credit system to emerge in DeFi – the equivalent of a credit scoring system in traditional finance – to unlock under collateralized lending to a wider set of use cases and take DeFi mainstream.
Reputation DAO is the latest project launched out of Mycelium, an Australian-rooted global network building next-generation transaction technology, including Tracer DAO. Founders Pat McNab and Ash Morgan started building Reputation DAO in late 2019 to open up the black box of existing credit and reputation systems in DeFi, to create a transparently governed system enabling secure, confident interactions within the DeFi economy.
“Whilst DeFi is forming an alternate rail for finance to evolve, there’s an abundance of financial data relating to risk, credit and identity that could be leveraged to unlock new applications within DeFi – such as unsecured lending,” says Pat McNab, Co-Founder of Reputation DAO.
“Interoperability between DeFi and traditional finance is integral to onboard trillions of dollars in capital and billions of users. Reputation DAO provides the conduit for this data to flow into smart contracts, providing greater security, rates and guarantees.”
The funding will drive the development of the reputation infrastructure and scoring product. By scaling their analytics engine, Reputation DAO can map off-chain data such as AML/KYC, traditional credit scores and social media data to enhance the assessment of account-specific risk metrics that are delivered into smart contracts to facilitate hundreds of billions in loans.
Richard Galvin, co-founder & CEO, DACM, “Credit scoring is a critical function of both bank and external providers in the traditional finance system. This clarity, for both borrowers and lenders has not been a function of DeFi to date. With the maturing of the ecosystem and the rise of DAOs that will need independent, and reliable information, we think Reputation DAO is fundamental infrastructure for the sectors next growth phase.”
Sergey Nazarov, co-founder, Chainlink, “DeFi is already redefining the global financial industry, but one of the missing links hindering its growth is the lack of a comprehensive credit system. By enabling the secure transfer of real-world data to blockchains, Chainlink is helping Reputation DAO unlock the reputation infrastructure necessary to accelerate global DeFi adoption.”
Reputation DAO (f.k.a. Chainlink Oracle Reputation) is building verifiable, decentralized and programmable reputation services for DeFi. Reputation is building a bridge between DeFi and traditional finance, enabling individuals to leverage their real-world financial data and identity when interacting with smart contracts. With a powerful data streaming engine, Reputation DAO analyses account, oracle and DAO specific data on-chain. Reputation is the key to unlocking DeFi and bringing numerous new decentralized applications to life.
DACM are a leading digital asset fund manager with global operations. Co-founded by Richard Galvin and Gabriel Abed in 2017, DACM manage around $500m in venture capital, long only and market neutral strategies for clients from around the world. DACM have generated world leading returns for their clients utilizing a combination of deep technology and infrastructure research, coupled with proprietary commercial research and valuation techniques. The DACM Digital Asset Fund was the number 1 performing long only crypto fund globally in 2020 and 2021.