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Ethereum co-founder Joseph Lubin defended venture capital involvement in the blockchain ecosystem after two prominent researchers left to join Paradigm-backed projects, calling VC firms a ‘necessary bridge’ that will eventually be replaced by decentralized onchain funding platforms.
Lubin’s comments on X came amid community concerns that Paradigm’s growing influence could centralize development talent and shape Ethereum’s future direction.
In a post on X (formerly Twitter), Lubin acknowledged that venture capitalists aim to make profit from Ethereum and its associated ventures, but he argued that their involvement remains a “necessary bridge” for now.
His comments followed heated community debates over the departure of two Ethereum researchers who recently joined Paradigm-backed projects, sparking fears of centralized influence within the decentralized network.
“We need VCs for now because they represent a comfortable bridge for the world’s capital to flow into our ecosystem,” — Joseph Lubin, Ethereum co-founder.
Lubin explained that while venture capital firms often operate from a profit motive, they also introduce much-needed funding, structure, and credibility to a sector still viewed skeptically by many traditional investors.
According to Lubin, the influence of Paradigm-backed projects must be understood within the context of a developing industry still reliant on traditional funding routes. He noted that venture capital firms help channel global investments into blockchain startups by providing familiar systems of evaluation, due diligence, and investor protection.
“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,” Lubin added, emphasizing his belief that Ethereum’s evolution will eventually phase out the need for centralized intermediaries.
Lubin views the current reliance on VCs as a transitional phase before decentralized onchain funding systems take over. These emerging systems, he said, will democratize investment opportunities — allowing anyone worldwide to back innovative blockchain initiatives without relying on large institutional players.
Ethereum’s strength, Lubin reiterated, lies in its openness, transparency, and neutrality, qualities that have made it a magnet for global collaboration and experimentation.
The renewed debate about Paradigm-backed projects began after two well-known Ethereum researchers, Dankrad Feist and Mallesh Pai — moved to new ventures supported by Paradigm.
Feist, a long-standing member of the Ethereum Foundation, announced his exit to join Tempo, a new Paradigm-backed project building a layer-1 blockchain optimized for payments and stablecoins. Tempo’s goal is to create faster, more efficient global payment rails that can compete with both traditional finance and existing crypto networks.
Meanwhile, Pai, previously with Consensys — joined Paradigm earlier this year as a research adviser, where he contributed to the firm’s growing blockchain research operations before transitioning to Tempo in September, according to his LinkedIn profile.
The quick succession of these moves triggered concern among Ethereum community members that Paradigm-backed projects may be consolidating too much talent and influence, potentially shaping the future of Ethereum’s development agenda.
Some critics on social media argued that corporate-backed blockchains could gradually divert resources and expertise away from the public Ethereum network. Others, however, welcomed the development, suggesting that Paradigm’s support provides researchers greater freedom and funding to experiment with new ideas that may eventually benefit the entire crypto ecosystem.
Lubin dismissed fears that the growing number of Paradigm-backed projects could undermine Ethereum’s independence. Instead, he characterized such movements as a natural — even healthy — phase in the lifecycle of a maturing technological ecosystem.
He maintained that collaboration between open-source developers and venture-backed enterprises has historically driven innovation in emerging sectors, from the early internet to modern blockchain networks.
Lubin believes the key lies in balance: maintaining Ethereum’s decentralized ethos while embracing capital and expertise from entities like Paradigm. In his view, this dynamic will accelerate Ethereum’s integration into the global economy while setting the stage for truly decentralized funding mechanisms to take hold.
“They [VCs] take ideas that begin in decentralized communities and make them ready for traditional investors who control large amounts of global capital,” — Joseph Lubin, Ethereum co-founder.
For now, Lubin insists that the presence of Paradigm-backed projects should not be seen as a threat, but as part of the broader evolution of Ethereum, one that bridges today’s financial world with the decentralized economies of tomorrow.
