Ethereum core developer Federico Carrone has voiced concerns over the increasing influence of major venture capital firms like Paradigm, warning that their growing presence could pose a “tail risk” to the ecosystem.
In a post shared on Sunday, Carrone, known as “Fede’s intern” on X, said that Paradigm has indeed “created valuable things for the community.” However, its expanding footprint within Ethereum’s development may not align with the network’s decentralized and philosophical roots.
“I’ve been saying for the past two years that the influence of paradigm within Ethereum could become a relevant tail risk for the ecosystem,” Carrone wrote. “I believe this will become increasingly clear to everyone in the months ahead.”
Concerns Over Corporate Influence in Ethereum
Carrone’s main worry stems from what he sees as the growing corporatization of Ethereum, where venture-backed entities could gradually shape the network’s direction based on profit and control, rather than its founding ideals of decentralization and open governance.
He noted that Paradigm’s hiring of top Ethereum researchers and funding of crucial open-source libraries, while beneficial in the short term, could lead to technical dependencies that give the firm excessive leverage over ETH evolution.
“Ethereum should be extremely cautious about developing a technical deep dependency on a fund that is playing cards in a very strategic way,” he warned.
Carrone added that when corporations become too “legible” and influential within open-source projects, community-driven innovation risks being replaced by corporate priorities. “That’s how misalignment begins,” he cautioned, referring to potential divergences between Ethereum’s long-term goals and private investment interests.
Paradigm’s Expanding Footprint
Founded in 2018 by Coinbase co-founder Fred Ehrsam and former Sequoia Capital partner Matt Huang, Paradigm has become one of the most influential investment firms in crypto and AI. The fund has backed major projects across DeFi, NFTs, blockchain security, and infrastructure, often positioning itself at the center of emerging technologies.
Recently, Paradigm made headlines for its involvement in developing Reth, an Ethereum client built in the Rust programming language, and for incubating Tempo, a new payments-focused Layer-1 blockchain created in partnership with fintech giant Stripe.
Tempo’s design, which reportedly places Stripe in a position of control, stands in contrast to Ethereum’s open, community-driven ethos. This contrast, Carrone implied, exemplifies the potential dangers of corporate entities steering blockchain development toward centralized models.