As NFTs have gained popularity, that also applies to NFT fraud† Copycats can quite easily upload images to an NFT marketplace, mint them and sell them to clients for profit without verifying that those images are their own intellectual property. The problem has become even more widespread as NFTs have cropped up in chains like Solana, which offer low gas rates compared to Ethereum and therefore fewer barriers to entry for would-be fraudsters.
While NFT marketplaces must comply with copyright laws, NFT fraud can be difficult to spot, especially since crypto wallet addresses cannot always be traced back to the real identities of their owners. Doppel, a startup founded in February this year by ex-Uber engineers Kevin Tian and Rahul Madduluri, has just secured $5 million in seed funding led by the venture capital arm of crypto exchange FTX to track down fake digital assets. Polygon Studios, Solana Ventures, OpenSea Ventures, Dapper Labs, SVAngel, South Park Commons, Script Capital, Spartan Group, Paxos, 6529 Capital, Quiet Capital and AlphaLab Capital all participated in the round, along with investors such as Balaji Srinivasan and Gokul Rajaram , the company said.
In just a few months since its inception, Doppel has already nailed one of the biggest names in the space as a client — Dapper Labs, the company behind the NBA’s Top Shot NFTs, Tian told gotechbusiness.com in an interview. Tian said the company is also testing its product with Yuga Labs, creator of the Bored Apes Yacht Club (BAYC) collection and is in the early design phase with a few other customers.
Doppel indexes NFT data across various blockchains, including Ethereum, Solana, Polygon, Flow and others, and uses models that include keywords and metadata to detect fraud, Tian said. Tian and Madduluri, who first bonded playing basketball together, noted that of the 100 million NFTs they’ve already indexed, 37 million have been flagged as potentially fraudulent by their algorithm.
The startup is already integrated with OpenSea, the largest NFT marketplace, and is working to integrate with others, Tian said. The top near-term priorities are building out new integrations and support for additional blockchains and adding off-chain data to their model, he added. An example of how Doppel could use off-chain data is to browse a brand’s product catalog and search for NFTs that match those products, Tian explained.
Tian noted that while Doppel helps companies identify fraud, it’s up to each individual company to determine how it wants to handle fraud cases once discovered.
The company’s goal is to support both Web3-native companies and Web 2.0 companies looking to build out their NFT strategies, Tian said. He said Doppel is actively trying to sue luxury fashion brands as customers.
Doppel’s system can detect fraud in under a minute, said CTO Madduluri. He predicted that the biggest challenges Doppel faces as it continues to grow will be technical in nature.
“It’s an incredible amount of data to consume and organize, and there are a lot of players trying to address that. We have that challenge, plus the challenge of building good AI models from that data to identify potential counterfeits,” said Madduluri.
In terms of competition, Madduluri said projects including: beehive and scale are more broadly working on trust and security within the digital asset space. Reverse image search API providers such as: NFT Port are also operating in a similar space to Doppel, he added. Still, Madduluri explained, these companies have different approaches to Doppel’s. The advantage of Doppel, he said, is that it addresses the problem with a deeper, end-to-end approach rather than simply providing tools for developers, as it both extends the indexers to get data as well as a SaaS-like product for companies based on that data.
The team of three, made up of both co-founders in addition to the company founder, will grow with two to four new engineers in the coming months, Tian said.
Despite a recent drop in cryptocurrency prices, the duo are confident in the staying power of NFTs.
“We are not concerned about the market. There are always cycles in this space, but we truly believe that long-term NFTs will last and be part of almost every company’s strategy,” said Madduluri.