Ethereum co-founder and Consensys founder Joseph Lubin stressed the importance of venture capital (VC) financing for the development of the world’s largest astute contract network, despite growing industry concerns about the influence of venture capital funds on Ethereum.
The primary goal of VCs like Paradigm is to “suck as much value as possible from Ethereum and the broader ecosystem,” while their secondary goals include “advancing systems toward rigorous decentralization,” Lubin wrote in Monday’s issue of X. postadding that “there is no reason to worry.”
Lubin’s comments come shortly after the departure of two key Ethereum researchers, which has sparked renewed concerns about the potential impact of centralized funds on Ethereum’s development.
On Friday, longtime Ethereum Foundation researcher and developer Dankrad Feist announced his departure to join Tempo, a Layer 1 blockchain for payments and stablecoins built by Stripe and Paradigm.
Former Consensys researcher Mallesh Pai joined Paradigm as a research advisor in January and then joined Tempo full-time in September, according to his LinkedIn side.
Despite calls from the industry regarding Paradigm’s growing influence on Ethereum, Lubin hailed Paradigm’s recent hires as another sign of the blockchain industry’s growing mainstream adoption.
“The gold rush in corporate networks confirms the effectiveness of the traditional economy and signals our mainstreaming of it,” Lubin added in X’s post.
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Lubin says cryptocurrencies “for now” need VC funding to fill the global capital gap
Despite growing concerns about VC’s influence in the blockchain space, the industry continues to rely on customary investment funds to attract more mainstream capital for sustainable development.
“For now, we need VCs because they are a convenient bridge through which the world capital can flow into our ecosystem,” Lubin wrote, adding:
“Very soon, better, fairer and more widely available onchain investment platforms with healthy tokenomics will reach sufficient maturity that VCs will have no choice but to set up on these platforms if they want to stay in the game.”
VC participation remains necessary to achieve the “progressive decentralization” necessary to achieve a “secure global information infrastructure,” Lubin explained.
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Paradigm’s Tempo blockchain is building a network with a curated set of validators that will be essentially controlled by Stripe, marking a piercing departure from Ethereum’s decentralized open source ethos.
First, the paradigm announced plans for a payments-focused blockchain network in September, citing “growing demand for optimized infrastructure” that will scale for global payments.
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