- Joseph Lubin emphasizes the necessity of venture capital (VC) for Ethereum’s development despite concerns over centralization.
- VC firms like Paradigm aim to extract value from Ethereum, while also supporting decentralization efforts.
- Recent departures of key Ethereum researchers to Paradigm-backed projects have raised questions about VC influence.
- Paradigm’s new blockchain, Tempo, focuses on payments and stablecoins and is controlled by a limited validator set, diverging from Ethereum’s decentralization.
- Lubin anticipates that future on-chain investment platforms will replace traditional VCs for funding blockchain projects.
Joseph Lubin, co-founder of Ethereum and founder of ConsenSys, addressed concerns regarding venture capital funding in the Ethereum ecosystem on Monday. He highlighted that venture capital firms remain important for the ongoing development of the world’s largest smart contract platform. Lubin reassured that despite criticisms, there is no need for alarm about VC involvement.
Lubin noted that firms such as Paradigm seek to maximize value extraction from Ethereum and its ecosystem. He added that these investment groups also contribute to pushing systems toward stronger decentralization. These remarks followed the announcement that several prominent Ethereum researchers left to work at Paradigm and its related projects.
On Friday, Ethereum Foundation researcher Dankrad Feist announced his move to Tempo, a layer-1 blockchain focused on payments and stablecoins backed by Stripe and Paradigm. Another former Consensys researcher, Mallesh Pai, transitioned to Paradigm earlier this year and joined Tempo full-time in September, according to his LinkedIn page. Despite concerns over the growing VC influence on Ethereum, Lubin regards these hires as evidence of blockchain’s wider acceptance in mainstream finance.
Lubin explained that traditional VCs currently serve as a useful bridge for global capital to flow into blockchain ecosystems. He stated, “Very soon better, fairer, more broadly accessible onchain investment platforms with healthy tokenomics will mature sufficiently so that VCs will have no choice but to set up shop on these platforms, if they want to stay in the game.” He emphasized that VC involvement remains needed to advance decentralization, which is key to building secure and global information infrastructure.
The Paradigm-backed Tempo blockchain operates with a curated set of validators controlled by Stripe. This model contrasts sharply with Ethereum’s decentralized and open-source principles. Tempo was introduced in September to provide optimized infrastructure designed to support global payment needs on a scalable platform. More details on the payments-focused blockchain are available in the official Paradigm announcement.
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