There’s a reason why regulators and the media refer to the land of decentralized finance as the “Wild West.” Over $2 billion in cryptocurrency was stolen from DeFi projects this year, according to blockchain data firm Chainalysis, with back-to-back hacks, rug pulls, faulty code, bad actors, and crime galore within the space.
Countless DeFi platforms have, in turn, collapsed, and some investors lost their life savings. But other DeFi-focused companies continue to emerge—and with fresh VC funding in tow.
Among them is Exponential, which announced on Monday that it had raised $14 million in a Paradigm-led seed round to build a new DeFi investment platform. Other contributors included Haun Ventures, FTX Ventures, Solana Ventures, Polygon, Circle Ventures, plus over 80 angel investors.
The Exponential platform, which has remained in beta until now, has a rating system—an A is best, an F is worst—for countless pools, coins, etc., within the DeFi space. Users can use the rating system to decide on investments, and also to get a rating of their existing holdings. (Investors still are encouraged to do their own research.)
Exponential’s ratings are based on a number of metrics, including protocol or chain design, past issues, dependencies, and so forth, cofounders Driss Benamour, Greg Jizmagian, and Mehdi Lebbar told Coins2Day, contending that the platform’s ratings can’t be manipulated on a whim.
“No one person can change a risk rating. It takes multiple people, and we use that same concept of multi-sig both for moving money and for changing things,” said Jizmagian, the CTO. “You design around the fact that there could be a rogue employee, that there could be those situations.”
As for the funds, the team aims to use most of it on hiring, particularly for those in senior roles at Uber, Amazon, PayPal, and Robinhood. “To pull this off, you need Web2 and Web3 to come together. In our team, you’ll have folks who come from a traditional Web2 background and people who are degens as well,” Benamour said.
Benamour, the CEO, and Lebbar, the president, are veterans of Uber, and Jizmagian of Amazon, but together they were interested in Web3, the so-called decentralized iteration of the internet. Mainly, they said they saw an opportunity within the DeFi realm—problems and all.
Exponential, in addition to the ratings platform, also plans to release a custodial wallet.
“We believe,” Benamour said, “it’s the way to unlock DeFi to the next billion people.”