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Hi friends,

We launched Web3Scout: Product Hunt for Crypto to help curate the top Web3 products. Every 2 weeks, we will also feature deep-dives into the top 3 most upvoted & innovative products for our 23K readers 👇

We are actively sourcing these products from (in decreasing order) our founder network, Web3 accelerators (Orange DAO, DeFI Alliance, Outlier Ventures, Beacon Accelerator), new Twitter/discord accounts, launchpads (Product hunt, Launchcaster.xyz) and various meet-ups & community groups.

If you’re building and launching a Web3 product or fundraising, we can help. Please add your product to Web3Scout website so our community can discover you. We will also include you as a featured startup (23K+ readers) if our comm…

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Subscribe now

Hi friends,

We launched Web3Scout: Product Hunt for Crypto to help curate the top Web3 products. Every 2 weeks, we will also feature deep-dives into the top 3 most upvoted & innovative products for our 23K readers 👇

We are actively sourcing these products from (in decreasing order) our founder network, Web3 accelerators (Orange DAO, DeFI Alliance, Outlier Ventures, Beacon Accelerator), new Twitter/discord accounts, launchpads (Product hunt, Launchcaster.xyz) and various meet-ups & community groups.

If you’re building and launching a Web3 product or fundraising, we can help. Please add your product to Web3Scout website so our community can discover you. We will also include you as a featured startup (23K+ readers) if our community upvotes you in the leaderboard or you have an impressive demo :)

Drop #1: Top products covered today 👇

1. Shield, security & Content moderation engine for Web3

2. Steadefi, next-gen leverage protocol on Avalanche

3. Ylide, web3 cross-chain communication protocol

Share Cryptechie💱

1. Shield

Security & Content moderation engine for Web3

👷 Web3 Infrastructure

Shield is building a scam detection and content moderation engine for web3 platforms. They integrate as a scam filter API for NFT platforms and tooling. They offer cutting edge crypto scam detection models and content moderation tools to help web3 platforms protect their users from malicious actors and protocols, enabling users to eliminate scams from crypto wallets and apps.

They are quickly rolling out discord home security systems for NFT communities and DAOs and seeing significant traction with their subscription model - securing 100k+ crypto users via discord bot and API integrations.

Shield will emerge as a tier 1 home security system for web3 companies to protect their communities, and any web3 builder can grow their community securely with Shield at the center.

The company is solving a real web3 pain point: Security is more costly when you don't have it. Most platforms get audited, but users are still exploited by malicious content and scam actors across dapps. User threats are left uncovered (wallet drainers, phishing attacks, malicious actors).

Shield is founded by a team of ex-Facebook, McKinsey, V Combinator, Messari, MIT & Princeton technologists.

Product Demo: https://www.loom.com/share/a2444e28bd9846a8bbe2e833503bfef8

Documentation: docs.getshield.xyz

Stage

Pre-seed

Amount raised

$1.5M

Investors

In Stealth (Top tier Web3 investors)

Social media

https://www.getshield.xyz/

Editor’s Note: This week we also present a unique opportunity to invest in Shield, a web3 security tooling company, alongside top tier crypto investors and many strategic angels. You can view more details and invest here

2. SteadFi

Next-gen leverage protocol on Avalanche

💰 DeFi

Steadefi is a DeFi framework on Avalanche that combines risk management and leverage in order to enable trading strategies that are highly sought after by the market.

Steadefi is a new leverage protocol that boosts yield while managing risks automatically, which ultimately provides predictability to users for greater DeFi adoption. $STEADY is the primary token of Steadefi with limited supply and deflationary properties.

How It Works

TLDR → DeFi yield investors are subject to numerous position risks and yield shortcomings. → Steadefi aims to address these issues through careful risk management, real yields that align with our APYs, and an automated user experience that provides clear market views and historical data. They do so by introducing Auto Hedging, Fixed Rate Lending, and Isolated Lending Pools to leveraged yield farming.  

The Risk and Unpredictability of DeFi

Since summer 2020, DeFi has attracted millions of new users through the promotion of staggeringly-high yields. Unsatisfied with “meager” 10-100% APYs, these same new users (aka ”yield farmers”) continued taking on increasingly riskier investments in order to “maximize their gains” in the shortest time possible. However, while doing so they remained unaware of the extreme risks involved through advanced DeFi concepts such as impermanent loss, market exposure, liquidations, yield volatility, code exploits, or insolvency. Then in spring 2022, with worsening market conditions and sudden downward volatility, this yield farming boom came to an abrupt end as yield farmers soon discovered that the only thing they had truly yielded was “disappointment.” Adding on to this sense of disappointment was that many users began to realize they were chasing those yields without an informed and actionable market view—most assumed it would all be “up only.”

The Steadefi team observed (and participated) in this yield farming boom, and soon used this market experience as a catalyst for the core of our protocol: offering institutional-level risk management and automation for individual DeFi users, while providing them with something they had not found over the previous two years—predictable real yields.

The Position Risks

Sensitivity to Market Movements Investors suffer losses (sometimes extreme) due to the high volatility of the crypto markets, especially when they set themselves in leveraged long OR short positions. Impermanent Loss (IL) An infamous term in the DeFi yield farming space, Impermanent Loss occurs when one asset in a liquidity pair fluctuates relative to the other asset, leading to an overall loss of equity. This type of loss is amplified in leverage yield farming positions as market movements may move the liquidity pair’s volatile asset (AVAX, ETH, BTC) more dramatically when leveraged. Liquidation When investors seek higher yields through leveraged positions, significant market movements against their position can lead to liquidation, which usually entails a 10-20% loss on the principal assets.

Yield Shortcomings

Unpredictable returns and misleading APYs In order to secure TVL, many leveraged yield farm protocols advertise high rates of return (APYs), which inevitably fall short of their investors' expectations. This means that investors are unable to predict what their yields may be in the long term, in addition to feeling "misled" by returns that end up below the original target. Requires excessive position management Most leveraged yield farming protocols require their investors to manually set up their own market-neutral positions and then also manually rebalance them to ward off liquidation or bad debt ratios. This can result in being both time-consuming and overly-complicated for the majority of users. Mismatch of risk vs reward Conservative lenders looking for safe (albeit slightly lower) yields on an asset may suffer exposure to the risks involved with highly-leveraged borrowing. Aggressive lenders seeking higher yields may receive lower "risk-reward" gains as they are forced to share those yields with the more conservative lenders.

SteadFi Approach

Risk Management Our strategy vaults are designed to provide institutional-grade risk management for individual DeFi users (and institutions, of course!). Our Strategy vaults undergo rigorous testing for handling almost any market movement by effectively balancing both long and short positions. These “rebalances” are performed at multiple parameters for ensuring minimal issues with impermanent loss.

Real Yields Our strategy vaults provide real yields, which means our rebalancing mechanisms have been carefully designed and tested in order to provide investors with predictable returns that align closely with our advertised APYs. See our backtesting data here.

Automated Positioning

For our strategy vaults, we have automated all of the processes, including the initial market-neutral setup when depositing assets. Yields gained over time will be automatically compounded into the principal, allowing our investors to simply deposit and relax.   Offering an Informed Market View With the help of clear guidance and an intuitive UI, our users can use historical data and vault analytics to craft and implement a fully-informed market view. After forming their strategies based on their market outlook, the user’s only responsibility is to deposit the correct asset and enjoy their steady returns.

Optimizing Risk-Reward Profiles By creating isolated lending pools dedicated to the risk profile of the lender, we can offer yields that better align with the user’s risk threshold. In this system, for example, a conservative lender's assets will only be used for more low-risk vault leveraging, while a more aggressive lender's assets will only be used for higher-risk vault leveraging. The yield rewards will then match with the use and risk profile of the funds.

Stage

Pre-seed

Amount raised

$1-2M

Investors

Ava Labs

Social media

https://steadefi.com/

Launch timing

Q1 2023

Media

3. Ylide

Web3 cross-chain communication protocol

🌉 Interoperability Protocol

What is Ylide Protocol?

Ylide Protocol is an open-source cross-chain wallet-to-wallet communications solution for Web3 projects. We anticipate that for the mass adoption of the Web3 it is crucial to have native decentralized and secure communications layer. That's what Ylide's purpose is.

Ylide Protocol consists of four main parts:

[ ] Client SDK Ylide Client SDK is a “just-add-water” solution for integrating decentralised end-to-end encrypted communications right into your existing or new application.

[ ] Prebuilt smart contacts It’s a core of our product. Smart contracts used for storing, transferring and managing messages on the blockchain. Contracts pre-deployed by Ylide can be used and seamlessly integrated. Or founders can create a customised solution on the top of it. Ylide will provide contracts for multiple mainstream blockchains with cross-chain facilitation.

[ ] Admin Tools It is a solution to forget about coding at all. Deploy, monitor, manage smart contracts and set custom monetisation parameters of your choice from the handy UI.

[ ] Pre-build products To save even more time of the founders we provide open-source product templates for typical communication use cases, so you can focus on the customisation and skip the hardest part.

Use cases for Ylide

True interoperability Generalized messaging for any type of communication that is open to integration by design and compatible with other apps

Flexible monetisation Financial transactions with arbitrary logic: subscriptions, pay per transaction and split payments

Web3 architecture Decentralized storage, E2E encryption, no more hosting — pay once, and a smart contract will work without interruption

Secure and open-source Audited, verified by numerous clients and available to be verified by you

Blockchain agnostic A multi- and cross-chain solution with optimal routing inside with clear customization management if needed

Something really new Send your users actionable messages acting as a one-click checkout button, pay them to see ads, and countless other possibilities that we haven't even thought of yet

Product MVP

Check out their latest beta version of B2C product called Ylide Social Hub (link: hub.ylide.io): 

- Smart feed with crypto content from Twitter, Discord, Telegram, Medium, and Mirror in one place. - Decentralized mailbox to send and receive encrypted mail across 17 chains. - Quick sign-in with wallet via popular options like Metamask, WalletConnect, and others.

Mail client: mail.ylide.io Demo video: ylide.io/demo-mail

Stage

Seed

Amount raised

<$1M

Investors

Symbolic Capital, Polygon

Social media

https://ylide.io/

Launch timing

2023

Media

Subscribe now

Hi crypto friends,

After speaking to 50+ Web3 founders, I realized it is hard for Web3 founders to get discovered, find early adopters, beta test their product and spread the word. On the other hand, venture capitalists and crypto natives can’t wait to learn about and get their hands dirty trying out these innovative products but don’t know where to look.

To solve this challenge, we launched Web3Scout: Product Hunt for Crypto to help curate the top Web3 products. Every 2 weeks, we will also feature deep-dives into the top 3 most upvoted & innovative products for our 23K readers 👇

We are actively sourcing these products from (in decreasing order) our founder network, Web3 accelerators (Orange DAO, DeFI Alliance, Outlier Ventures, Beacon Accelerator), new Twitter/discord accounts, launchpads (Product hunt, Launchcaster.xyz) and various meet-ups & community groups.

Drop #1: Top products covered today 👇

1. Soul Wallet

2. Pouch.ph

3. EigenTrust

Share Cryptechie💱

1. Soul wallet

ERC-4337 wallet. Supported by the Ethereum community.

💰 DeFi

Problem - EOA sucks

There are two kinds of accounts on Ethereum currently:

• EOA (Externally-owned account), most people use this kind of account on MetaMask

• Smart contract

Key Management

• Tightly coupled between key and account (lost key, lost account)

• Hard to recover (lost recovery phrase lost key)

Access Control

• No access control (same for everyone)

• No multi-sig

• No roles 

• No spending policy (daily limit)

Gas Payment

• Gas must be paid in Ether

• Gas must be paid directly from EOA

UX

• No batch transaction ( approve + send + cancel approvement) 

• Wasteful on-chain revert

Solution

Current Solution

• Hardware wallet

  • Only solve the key stolen problem

• Multi-sig wallet

  • Safe but inconvenient 

  • Rely on EOA

• MPC wallet

  • Only solve the key recovery problem

Soul Wallet Solution: Account Abstraction via ERC-4337

Smart Contract Wallet controlled by the user directly (without needing an EOA). Support both desktop and mobile.

Key management

• Decouple key and account

• Social recovery

Access Control

• Native multi-sig

• BLS aggregation - reduce gas by at least 30%

• Per device key

• Spending limit

• Multi-Role

• Session Keys

Gas payment

• Pay gas via the sponsor

• Pay gas via ERC-20

• Privacy

UX

• Batch transaction

• Automation transaction

• faceID / touchID signature

Product progress

Launched both POC plugin and mobile (supported by @AstroX network) apps.

Reading material

• POC DEMO

• EIP 4337

• Devcon account abstraction

Stage

Seed

Amount raised

$2M

Investors

Vitalik, Strategic Angels

Social media

https://twitter.com/soulwallet_eth

Launch timing

2022

2. Pouch.ph

BTC Lightning ewallet for the Philippines

💰 DeFi

🦺 Payments

Pouch.ph is using bitcoin’s Lightning Network to transform digital payments & remittances for the Philippines, one of the world’s largest remittance corridors, which saw $32B in remittance volume last year. The Pouch.ph eWallet is akin to a digital bank plus global remittance connectivity via bitcoin/lightning, payment processing for merchants, and in-app shopping conveniences for individuals. You can think of Pouch as “Stripe meets Venmo” on Bitcoin’s Lightning Network rails for SE Asia. 

They’ve partnered with CoinCorner in Europe and are having even bigger partnerships in the works

Opportunity Size

The Bitcoin Lightning Network is a decentralized, global payment network capable of near-instant settlement for a fraction of the cost of legacy payment processors. Pouch is using bitcoin’s Lightning Network to transform digital payments & remittances for the Philippines, one of the world’s largest remittance corridors, which saw $32B in remittance volume last year

The Lightning Network is still in its infancy now but growing very rapidly. The lightning network has already begun to disrupt the remittance payment industry and we expect that trend to continue. What is most important here is NOT how large a market size for Pouch TODAY, but rather how large it WILL BE for it in 7-10 years from now, when we believe the Lightning network will disrupt Visa, Mastercard, Western Union, and alike, and become the global market leader in global payments. At that time the market size for Pouch would be a HUGE one. It is like comparing the Lightning network growth with Facebook’s growth. When Facebook was in its infancy and was live only in Harvard and several other colleges in the US, then it was a big mistake focusing on Facebook’s market size at that specific time only, without having a large picture and vision of Facebook becoming a dominant social network in the US and in the world. We believe that the lightning network today is as Facebook was in 2005.    Even just the current Philippines market is a very large one by itself. Pouch’s direct competitors are the two eWallet giants who exclusively serve Philippines. GCash was recently valued at $2B. PayMaya was recently valued at $1.4B. Pouch is targeting this same consumer eWallet/banking & digital payment processing market, with a twist that they can also serve the $32B PH remittance market (with lower prices and a better experience) as a side effect of being lightning-native.

From the Founder, Ethan Rose:

As an American who has sent money home to my wife’s family for the past 7 years, and spending months at a time living in the Philippines, it was clear to me that the century-old “Western Union” remittance paradigm (A $32B industry in the Philippines alone) is overdue to be disrupted. Fees are high (7% on average). Transaction times are slow (3 days on average). And remittance companies block transactions frequently.    My deep passion to build Pouch was born out of a tragedy when I tried to send a medical remittance to a friend to save her 7-year-old son, but he passed away; He was unable to receive life-saving medical care on time because my remittance was too slow.    The Lightning Network is the obvious disruptor, enabling instant payments over a highly scalable & permissionless global network.   I’m a solo founder. Previously I spent my career in Seattle as a software engineer at T-Mobile, Mighty Ai, Uber, and Aurora.   I love coding and I could build anything that I set my mind to. So why the heck would I choose payments in the Philippines? My past experiences have prepared me mentally to dedicate the rest of my life to making the monetary system more fair & free, and the payments system more borderless for Filipinos.   I believe in the lifecycle of a startup where a founder must start as a hacker and pivot to higher leadership. I love the hacking that I get to do today, but I am equally excited to be orchestrating the most talented team in the Philippines who together are far more effective than I could ever be on my own.

Stage

Seed+

Amount raised

$2M+

Investors

Hivemind VC

Social media

https://pouch.ph/

Launch timing

2022

3. EigenTrust

Reputation protocol for Web3

🆔 DIDs

EigenTrust is a Web3 Identity and Reputation protocol and has signed up pilot POC partners - Zerion, Cyberconnect, MintKudos, Lens, Farcaster. They are also in discussions with Metamask, gm.xyz, layer3. On data infra integrations - they’re working with Dune Analytics and Ceramic teams for the data ingestion and storage layer for EigenTrust.   Check out their demo video for the web3 social use case.

EigenTrust - what is it?

The core idea behind EigenTrust is that a person's reputation is defined recursively by the people who trust that person, weighted by those people's reputations.   The Intuition At baseline, you can trust your friends. This gives you a good starting point, but because each person only has so many friends, it's too limited to make a workable system.   As a next step, you can expand that by asking your friends who they trust, and weighing their opinions by how much you trust your friends.   This increases your trust coverage, but it has two problems. The first problem is that it still does not give you enough coverage. And the second problem is that it adds a fair amount of computation for large systems, because you have to do this for every user in the network.   You can address both of these: You can ask your friends whom they trust, and in turn, ask their friends whom they trust, and in turn, ask their friends whom they trust, and do this for a very long time, at each stage weighting their opinions-as of that same stage-by how much you trust them.   In other words, you can initialize a trust vector with a set of seed peers that you trust. And then you can keep multiplying that vector by a matrix that represents the pairwise trust judgments of all the peers in the network. This is a power method algorithm, and it converges to the principal eigenvector of the matrix.   This solves both of the problems introduced by the friends of friends method. Because you ask so many times, you get complete coverage over everyone connected to you, directly or indirectly - in just a single eigenvector calculation.  

What is the market opportunity for reputation systems?

The market for web3 reputation is proportional to the growth of web3 users and their on-chain activity. Just like how web page indexing and ranking became the backbone of internet search and ads, web3 reputation will power key features (search, discovery, recommendations, trust, and safety) for any web3 marketplace or consumer app in the next 5 years.   A peer-to-peer community or marketplace in web3 will rely on an open reputation infrastructure, versus trying to manage an in-house data infrastructure and proprietary algorithms thereby restricting themselves to centralized liability (no community ownership or incentive alignment). In the first 5 years of internet marketplaces (paypal, ebay, et.al), the top 3 expense line-items included trust & safety, fraud, and reputation. The cost to create and manage an in-house reputation infrastructure can range from a few hundred thousand to millions depending on size and scale.   Reputation will become an important public utility infrastructure - just like oracles, data indexers, and decentralized storage infrastructures. The value accrual for such a service comes from real demand for reputation computing, which drives growth, monetization, and retention for apps and marketplaces in web3. Reputation systems can power user loyalty in web3 context where apps and front ends find it challenging to create compelling moats.  

What is the architecture of the protocol? 

The foundational layer of the protocol is a decentralized computation network. The network performs the EigenTrust calculations and makes the reputation data available for developers to use in their applications. This layer will be designed to ensure a constraint free and optimized implementation of the power method which runs in polynomial time.   Another component of the protocol will involve a Data APls layer which will enable developers to select the relevant data that needs to be ingested for reputation computation in their use case. Developers can choose to leverage any on-chain data or bring their off-chain data. This layer will also enable developers or their community to input the seed peers as well as their desired pairwise trust (reputation heuristic) to perform the EigenTrust computation. The results of the reputation computation will be published on the desired data infrastructure (Ceramic, IPFS, etc.).   Finally, the token economy will strengthen sybil resistance, power the reputation compute marketplace, and enable the community to curate and enable an open reputation system for a variety of use cases.  

Application - Proof of Concepts

1. Web3 Social Personalized User rankings

   The goal is to provide a personalized recommendation/ranking for each user in web3 social, we used Farcaster data for our POC. The ranking results can be used for 'Users to Follow'on a web3 social app.   We computed a personalized version of EigenTrust for users, where the pairwise trust matrix was created by taking the existing follow-follower graph. And for each user, they were their own seed node. We ran the EigenTrust algorithm for the existing 3000+ users.   Additional rankings can be created in a similar way for NFTs to explore/buy and content to   follow based on your social graph. All of this is based on the peer-to-peer activity data, and results in the most truthful and valuable UX for users.

2. NFT Collection Rankings

   The goal is to provide a relative (elo) ranking of NFT collections using on-chain data. The ranking results can be used by marketplaces and communities to show reputation of NFT collections.   We started by picking a couple of trustworthy collections as seed peers (>1-year mints, top 30 daily volume, floor price >5 Eth). We used BAYC and Moonbirds as the seed peers. These criteria for seed peers can be defined by the developers or community.   Then we established a system for pairwise trust. In this case, since NFT collections can't directly vouch for each other or trust each other explicitly. We assumed that trust between collections is a function of the cohort of owners' transitive purchases of other collection. To be more specific, we said that one collection "trusts11 another collection if a certain number of people bought NFTs from the second collection after having bought NFTs from the first.   After 12 iterations, the Principal Eigenvector converged to a global trust score for these collections. Relatively well known collections like MAYC, Azuki, and VeeFriends were highly ranked1 and copy-cat or fake collections got a score of 0.

Stage

Pre-seed

Amount raised

$3.5M

Investors

Galaxy Digital, Spartan

Social media

Launch timing

2022