Shards Protocol Raises $2M from Animoca and YGG to Enhance Web3 Identity Infrastructure

Shards Protocol has successfully secured $2 million in funding to improve Aura, its Web3 reputation system that converts on-chain activities into reputation and rewards.

In a press release shared with crypto.news, Shards Protocol announced the successful raise of $2 million, with support from Animoca Brands, Kyber Ventures, Yield Guild Games, among others. The capital will primarily be used to advance the development and integration of their key product, Aura, within the Web3 ecosystem.

Aura acts as a recognition and reputation layer that changes users’ on-chain activities into verifiable reputations and rewards. Users can display their reputation scores and badges from their Web3 activities directly on their X profiles. The more badges they accumulate, the greater the rewards they can unlock. Additionally, the company is preparing for a token launch and plans to expand Aura’s reach and capabilities throughout the year.

“The company has brought on over 1 million users across all products and generated over $1M in trading volume, but we quickly realized that Web3 required more,” said Stefano D’Silva, CEO and co-founder of Shards, in the press release. “That’s why we introduced our flagship product Aura, a recognition layer that converts your on-chain contributions into reputation and rewards.”

Prominent investors also shared their thoughts on the development. Gabby Dizon, co-founder of Yield Guild Games, one of the backers, stated:

“Aura by Shards is exploring ways to recognize individuals’ on-chain activities and connect them with opportunities. It’s encouraging to see more projects striving to enhance how Web3 communities can grow and organize.”

Previously known as Shards.Tech, Shards Protocol started as an SDK layer aimed at improving retention and in-game spending for game studios. It allowed players and community members to buy and trade fractional shares of game teams through a marketplace. Various games leveraged this technology, achieving retention increases greater than 200% and generating over $400,000 in trading volume during a private alpha phase in 2024.