Joseph Lubin, co-founder of Ethereum and founder of Consensys, emphasized the crucial role of venture capital (VC) funding in advancing the largest smart contract network globally, amid rising industry concerns regarding the sway of investment funds over Ethereum.
According to Lubin, the primary objective of VCs like Paradigm is to “extract as much value as possible from the Ethereum and broader ecosystem,” while secondary goals include “pushing systems towards rigorous decentralization.” He stated this in a Monday X post, asserting there is “no reason for concern.”
His remarks followed the exit of two prominent Ethereum researchers, which reignited worries about the potential dominance of centralized funding in Ethereum’s evolution.
Dankrad Feist, a veteran Ethereum Foundation researcher and developer, announced his move to Tempo, a layer-1 blockchain for payments and stablecoins developed by Stripe and Paradigm.
Former Consensys researcher Mallesh Pai shifted to Paradigm as a research adviser in January before transitioning to a full-time role at Tempo in September, according to his LinkedIn page.
Despite concerns surrounding Paradigm’s growing impact on Ethereum, Lubin regarded Paradigm’s recent hires as indicative of the blockchain sector’s increasing mainstream acceptance.
“The gold rush of corpo-chains serves as validation for the traditional economy and signals our mainstreaming,” Lubin remarked in the X post.
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Crypto needs VCs “for now” to bridge global capital gap, Lubin says
Despite rising apprehensions regarding VC influence on the blockchain landscape, the industry continues to depend on traditional investment funds to draw more mainstream capital for ongoing development.
“We need VCs for now as they serve as a comfortable conduit for the world’s capital to flow into our ecosystem,” Lubin articulated, adding:
“Very soon, improved, fairer, and more accessible on-chain investment platforms with sound tokenomics will develop to a point where VCs will have to establish operations on these platforms if they wish to remain competitive.”
Lubin elaborated that VC involvement is essential to foster the “progressive decentralization” necessary for a “secure global information infrastructure.”
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Tempo, Paradigm’s blockchain, is constructing a network with a selected set of validators that will essentially be managed by Stripe, representing a significant shift from Ethereum’s decentralized, open-source principles.
Paradigm first revealed its plans for this payments-centric blockchain network in September, citing a “growing demand for optimized infrastructure” suitable for global payments.
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