Ethereum co-founder and Consensys CEO Joseph Lubin has weighed in on the ongoing debate about venture capital (VC) influence in the blockchain ecosystem, emphasizing that while concerns about centralization are valid, VC funding remains a vital part of Ethereum’s evolution. His comments arrive amid growing scrutiny over the role of investment firms like Paradigm in shaping the direction of major blockchain projects.
Key Takeaways
- •Joseph Lubin reaffirmed the importance of VC funding for Ethereum’s continued development.
- •He acknowledged Paradigm’s influence but argued it supports mainstream adoption.
- •Lubin stated that decentralized on-chain funding alternatives will eventually replace VCs.
- •Recent moves by Ethereum researchers to join Paradigm-linked projects have reignited centralization concerns.
- •Paradigm’s new Tempo blockchain diverges from Ethereum’s open-source ethos by favoring a curated validator model.
Lubin addressed the topic on X, stating that firms like Paradigm primarily aim to extract value from the Ethereum and broader crypto ecosystem but also contribute to “progressing the systems towards rigorous decentralization.” He dismissed growing community concerns, saying there was “no reason for concern.”
His remarks followed the recent departure of two key Ethereum researchers, which sparked renewed discussion about the increasing sway of centralized investment funds over Ethereum’s development. Last week, longtime Ethereum Foundation researcher Dankrad Feist announced his move to Tempo, a new layer-1 blockchain designed for payments and stablecoins, built by Stripe and Paradigm. Former Consensys researcher Mallesh Pai also joined Paradigm earlier this year before taking a full-time position at Tempo.
Despite the criticism, Lubin viewed these transitions as signs of growth, suggesting that such moves reflect blockchain’s expanding integration with mainstream finance. “The gold rush of corpo-chains is validating for the traditional economy and signals our mainstreaming,” he wrote.
VCs Still Play a Key Role in Connecting Global Capital to Blockchain Innovation
Lubin acknowledged that the crypto and DeFi sectors still depend on traditional venture funding to attract global capital. “We need VCs for now because they represent a comfortable bridge for the world’s capital to flow into our ecosystem,” he explained. However, he predicted that emerging decentralized investment platforms will soon make VCs obsolete.
“Very soon better, fairer, more broadly accessible on-chain 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.”
Lubin argued that venture participation is essential for achieving “progressive decentralization” and building a secure global infrastructure for the blockchain economy. Meanwhile, Paradigm’s Tempo blockchain is introducing a payment-focused network governed by a curated group of validators—an approach more aligned with corporate control than Ethereum’s open-source model. Paradigm announced its plans for Tempo in September, citing the growing need for scalable global payment infrastructure.