Ethereum developer Federico Carrone has expressed concerns that the increasing influence of entities like Paradigm on the network could represent a potential “tail risk” for the Ethereum ecosystem.
In a post on Sunday, Carrone, an Ethereum core developer who is known as “Fede’s intern” on X, argued that even though Paradigm has “created valuable things for the community,” he fears the increasing power of a venture fund primarily motivated by profit and influence.
“For the last two years, I’ve warned that the sway of @paradigm within Ethereum could emerge as a significant tail risk for the ecosystem. I believe that this concern will become more evident to everyone in the coming months.”
Carrone further noted that while Paradigm’s recruitment of prominent Ethereum researchers and financing of open-source libraries deemed “critical to Ethereum” may appear beneficial, it is concerning for those who believe Ethereum should embody a “philosophical and political” movement transcending any corporate interests.
Over the years, Paradigm has made several strategic moves in Ethereum, including developing the Rust-language-based Ethereum software, Reth.
One of their most recent notable initiatives includes the incubation of a new layer-1 blockchain, Tempo, in collaboration with fintech giant Stripe.
This upcoming Tempo project will focus on stablecoins and payments, with Stripe effectively managing the network. This corporate control stands in contrast to Ethereum’s decentralized and open-source principles.
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Carrone’s key concern revolves around the conflicting objectives of decentralized and centralized entities, emphasizing the risks of allowing any fund—not just Paradigm—to exert excessive influence over the Ethereum ecosystem.
“Ethereum must exercise caution regarding a technical dependency on a fund that is strategically maneuvering its influence.”
“When corporations gain too much visibility and power over open-source projects, community priorities may begin to shift from long-term vision towards corporate incentives. That is where misalignment starts.”
Cointelegraph attempted to contact Paradigm for comment but did not receive a response by the time of publication.
Paradigm crypto ventures
Founded in 2018 by former Sequoia Capital partner Matt Huang and Coinbase co-founder Fred Ehrsam, Paradigm is a crypto and AI investment firm.
The firm has invested broadly across the sector, encompassing areas such as DeFi, NFTs, blockchain security, infrastructure, and startups.
In its initial announcement regarding Tempo in September, Paradigm outlined its aim to advance crypto technology and adoption through a “blend of investing, building, and researching.”
“This approach helps us identify friction points and opportunities, allowing us to stay on the cutting edge of what’s possible,” the announcement stated.
Apart from financial investments, Paradigm has undertaken several initiatives demonstrating a strong commitment to the crypto community. This includes submitting an amicus brief in support of Tornado Cash co-founder Roman Storm and hiring well-respected blockchain investigator ZachXBT as an adviser to promote research and bolster protection for its VC investments.
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