Shards Protocol lands $2m from Animoca, YGG to grow Web3 identity layer

Shards Protocol has secured $2 million in funding to advance Aura, its Web3 reputation system that turns on-chain activity into reputation and rewards.

In a press release shared with crypto.news, Shards Protocol announced that it has raised $2 million in funding backed by Animoca Brands , Kyber Ventures, Yield Guild Games, and others. The capital will primarily fund the development and integration of their flagship product, Aura, within the Web3 ecosystem.

Aura is a recognition and reputation layer that converts users’ on-chain activity into verifiable reputation and rewards. Users can flaunt their reputation scores and badges from their Web3 activities right on their X profiles. The more badges they mint, the more rewards they can unlock. The company is also preparing for a token launch and plans to expand Aura’s reach and functionality throughout the year.

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

Key investors also commented on the development. Gabby Dizon, co-founder of Yield Guild Games, one of the backers, said:

“Aura by Shards is exploring ways to recognize what people are doing on-chain and connect them with opportunities. It’s always good to see more projects building toward better ways for web3 communities to grow and organize.”

Previously known as Shards.Tech, Shards Protocol started as an SDK layer aimed at boosting game studios’ retention and in-game spending. It allowed players and community members to buy and trade fractional shares of game teams through a marketplace. Multiple games integrated this technology, seeing retention increase by over 200% and generating more than $400,000 in trading volume during a private alpha phase in 2024.