Joseph Lubin Defends Venture Capital’s Role in Ethereum Growth

Ethereum co-founder and Consensys CEO Joseph Lubin has emphasized the importance of venture capital (VC) funding in advancing the world’s largest smart contract network. His comments come amid growing debate over whether investment funds hold too much influence over Ethereum’s direction.

In a post on X on Monday, Lubin acknowledged that firms like Paradigm seek to “suck as much value as possible from the Ethereum and broader ecosystem.” However, he added that their secondary goal, promoting decentralization, aligns with Ethereum’s long-term vision. 

Lubin reassured the community that there is “no reason for concern,” arguing that venture funding remains vital to the network’s continued growth.

Departures Spark Centralization Concerns

Lubin’s remarks follow the recent departures of two prominent Ethereum researchers, which reignited fears about the influence of centralized investment firms. Last week, longtime Ethereum Foundation developer Dankrad Feist announced he was leaving to join Tempo, a layer-1 blockchain focused on payments and stablecoins, created by Stripe and backed by Paradigm.

Similarly, former Consensys researcher Mallesh Pai joined Paradigm as a research adviser earlier this year before transitioning to a full-time role at Tempo in September, according to his LinkedIn profile. These moves have raised eyebrows among community members wary of large funds potentially steering blockchain development toward corporate interests.

Despite these worries, Lubin interpreted the trend differently. He suggested that the entry of major financial players into blockchain technology signals growing legitimacy and mainstream adoption. “The gold rush of corpo-chains is validating for the traditional economy and signals our mainstreaming,” Lubin wrote.

A Bridge Between Capital and Decentralization

Addressing the ongoing tension between decentralization and institutional funding, Lubin argued that VC participation remains a necessary bridge. “We need VCs for now because they represent a comfortable bridge for the world’s capital to flow into our ecosystem,” he explained.

Lubin added that, over time, more equitable on-chain investment platforms will mature, allowing investors to participate directly in decentralized finance without intermediaries. 

“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,” he said.

However, Paradigm’s Tempo project represents a different approach from Ethereum’s open-source model. Built with a curated set of validators effectively controlled by Stripe, it contrasts sharply with Ethereum’s decentralized ethos. Paradigm first unveiled plans for Tempo in September, citing a need for scalable infrastructure to support global payment systems.