Exponential, a decentralized finance investment risk assessment and discovery platform, said today that it has raised $14 million in seed funding to simplify entry into the new crypto ecosystem that has been otherwise fraught with complexity and hazards.

Crypto-focused venture capital firm Paradigm led the round with participation from other big names in the industry, including Haun Ventures, FTX Ventures, Solana Ventures, Polygon, Circle Ventures and more than 80 angel investors.

Decentralized finance, or DeFi, allows for peer-to-peer transactions executed using blockchain technology, which permits people to participate in financial services without the need for middlemen such as banks or brokerages. Using DeFi, software governs the movement of currency tokens between parties, who can buy, sell, trade, invest and lend between each other – all opportunities that normally involve central authorities such as banks.

“There’s just one problem,” said Exponential co-founders Driss Benamour, Driss Benamour and Greg Jizmagian in the announcement. “Investing in DeFi is a labyrinthian hellscape that even the most devoted crypto evangelist can get lost in. Finding legitimate projects, executing trades, moving funds across chains, tracking performance and filing taxes is more than enough to scare off most investors.”

Investing and trading in DeFi is not without risk. According to a report from blockchain security firm CertiK, more than $2 billion was lost to hacks, scams and exploits in the first half of 2022. That included the notorious attack on the Ronin Network, the blockchain network behind the “Axie Infinity” game, looting almost $615 million, and $182 million stolen from Beanstalk Farms in a “flash loan” attack.

That does not take into account even more recent hacks that have struck DeFi markets, such as $160 million stolen from Wintermute, a major cryptocurrency market maker that was hit in mid-September.

To help its customers navigate the choppy investment waters of DeFi, Exponential’s platform provides institutional grade risk assessment with a grading system for wallets, protocols, coins and investment pools. A is the best and F is the worst. Using the platform, users can decide if they should invest their tokens and also get a rating on their current portfolio.

The platform also allows users to find and compare yield opportunities across multiple blockchains and protocols using a curated list created by a team of experts at Exponential.

The co-founders said this is only the beginning, and the vision for the platform is to unlock “financial freedom. Soon the platform will also be adding the ability to invest in DeFi liquidity pools across major blockchains directly on the custodial platform itself. Users will no longer need to wade into complex third-party decentralized exchanges or apps. Instead, they will be able to process their investments directly through Exponential.

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