Ethereum’s Joe Lubin Predicts On-Chain Platforms Will Replace Venture Capital
Ethereum co founder Joseph Lubin has been speaking out about the concerns some people have about venture capital money in the crypto space.
Quick overview
- Joseph Lubin emphasizes the important role of venture capitalists (VCs) in bridging traditional finance with the decentralized innovation of Ethereum.
- He acknowledges concerns about VCs undermining decentralization but believes their involvement is a necessary transitional phase.
- Lubin envisions a future where on-chain investment platforms will allow direct investment in blockchain projects, reducing reliance on VCs.
- The debate around Paradigm's influence highlights concerns about centralization versus the potential for accelerated innovation within the Ethereum community.
Ethereum co founder Joseph Lubin has been speaking out about the concerns some people have about venture capital money in the crypto space. He was particularly talking about Paradigm, one of the biggest and most influential investment firms around. In a chat on X , Lubin said – VCs are always in it to make a profit, but they still have a really important role to play in getting mainstream investors into the world of decentralised innovation.
As Lubin sees it, a lot of traditional investors just dont get blockchain technology – or at the very least dont fully get it. Venture capital firms, he says, fill a gap by applying the systems they already know and understand to vetting out new projects, managing risk and bringing in the big dollars that the Ethereum ecosystem really needs.
“We need VCs for now” Lubin wrote “because they are a comfort bridge for the world’s capital to flow into our ecosystem”
Lubin admitted that some people are worried that the involvement of VCs could end up undermining the whole decentralised thing – but he reckons that this is just a transitional phase. What he is saying is that Ethereum shouldnt be afraid to work with traditional finance, even though it will eventually build its own tools that will replace it.
Key points:
- VCs are a temporary necessity not a permanent fixture
- Venture capital is helping translate crypto innovations into something that traditional markets can understand
- Ethereum is eventually working towards a world where people can invest in blockchain projects without needing to go through a VC.
Getting Rid of VCs – On Chain Investment
Looking ahead Lubin reckons that eventually people will be able to use “fairer on-chain investment platforms” to invest directly in blockchain projects, without needing the help of a VC. These platforms will allow anyone in the world to get involved, and will use tokens and smart contracts to get round the need for big firms and intermediaries.
“Very soon we will have better and more accessible on-chain investment platforms with healthy tokenomics” Lubin said “and the VCs will have to adapt to that”
He thinks that what makes Ethereum strong is its independence, transparency and openness – making it a place where anyone can contribute and invest without needing to go through the gatekeepers of old.
Paradigm – VCs and Centralisation
Lubin was talking at a time when there is a big debate going on in the Ethereum community about Paradigm’s growing influence. This has come to a head because two top Ethereum researchers have recently joined Tempo, a blockchain that is backed by Paradigm and has a focus on payments and stablecoins
- One of the people who left to join Tempo is Dankrad Feist, a veteran of the Ethereum Foundation
- Mallesh Pai, who used to work at ConsenSys, is now a Paradigm adviser and is due to move to Tempo full time in September
Some people in the community are worried that Paradigm’s influence could lead to centralisation and influencers outside of the community steering the direction that Ethereum is heading in. Others reckon that Paradigm’s money will actually speed up innovation, by giving these people more resources to explore new types of blockchain model
Lubin said that he didnt think there was anything to worry about – he thinks that Paradigms activity is a sign that the Ethereum ecosystem is maturing, not a sign that it is being taken over.
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