Ethereum core dev raises alarm over growing corporate sway in governance

Some members of the Ethereum community are voicing their concerns about increasing corporate and venture capital influence in the platform and how this influence is beginning to distort the blockchain network’s founding ethos.

Federico Carrone, a core Ethereum contributor who goes by Fede’s Intern on X, said that the growing sway of investment firm Paradigm posed “a relevant tail risk” to the network’s future. 

His statement is a response in agreement to a post by David Hoffman, co-founder of Bankless, who wrote about long-time Ethereum Foundation researcher Dankrad Feist’s exit to join Tempo, a new Layer 1 blockchain incubated by payments giant Stripe and backed by Paradigm, and what it means for the foundation.

“Ethereum should be extremely cautious about developing a technical deep dependency on a fund that is playing cards in a very strategic way,” Carrone wrote. 

While acknowledging that Paradigm has contributed valuable research and open-source tools, he warned that venture capital’s incentives, which are based on maximizing returns for limited partners, are “not necessarily aligned” with the decentralized vision that are associated with Ethereum.

Ethereum sees a clash of capital and conviction

Founded in 2018 by Coinbase co-founder Fred Ehrsam and former Sequoia partner Matt Huang, Paradigm has risen to become one of crypto’s most influential investors, with stakes in Coinbase, Uniswap, Optimism, Phantom Fireblocks, and Kalshi among a host of others. 

The firm also funded “Reth,” a Rust-based Ethereum execution client, and has recently channeled resources into Tempo, a payments-oriented blockchain that aims to serve as a settlement layer for stablecoins and bank-to-bank transfers.

Tempo, which recently announced that it has raised $500 million at a $5 billion valuation from Greenoaks, Thrive Capital and others, is positioning itself as a high-throughput chain designed for institutional adoption. Its backers include Stripe, Paradigm, Sequoia, Ribbit and SV Angel.

The project’s entry has prompted questions about Ethereum’s ability to compete for talent and attention. 

“This week, we lost Ethereum researcher Dankrad Feist,” Hoffman wrote on X. “There’s always been this fear that for-profit organizations would pay top dollar to poach talent incubated in Ethereum’s open-source community.”

Hoffman added that while many new chains claimed to complement Ethereum, Tempo’s model, privately owned, compliance-first and designed for financial institutions, could “consume as much of the pie as possible,” potentially diverting liquidity and innovation away from the open-source network.

The decentralization dilemma

In his thread, Carrone invoked past cautionary tales of open-source capture, noting that “when corporations gain too much legibility and influence over open-source projects, priorities start to drift away from the community’s long-term vision and toward corporate incentives.” He said that’s how misalignment begins.

To counterbalance that trend, Carrone said he and others had launched Ethrex, an independent Rust-based execution client, to provide an alternative to Reth — which he described as effectively controlled by a venture-backed entity. 

“We don’t think Ethereum should depend on a critical component controlled by a fund playing on all possible fronts,” he said.

Yet the philosophical divide remains, as Hoffman pointed out in his post. He said, “Ethereum is special. Tempo is a privately owned corpo-chain. Both will improve the world, but only one is uniquely suited at being the credibly-neutral global settlement layer, with no equity-owners and knows no laws.” 

The sentiment echoes concerns that Tempo’s design could prioritize regulatory compliance and censorship controls over permissionless access, a departure from Ethereum’s founding ideals.

What’s at stake for Ethereum?

Carrone’s warning arrives at a moment of resurgence for crypto markets and a renewed push by traditional finance to integrate blockchain infrastructure. With Stripe’s re-entry through Tempo and Paradigm’s sprawling portfolio, the line between decentralized ideals and corporate pragmatism is getting blurred.

Paradigm, for its part, has not publicly commented on Carrone’s remarks. The firm’s representatives have previously stated that their work strengthens open-source infrastructure and fosters experimentation across the Ethereum ecosystem. 

Tempo executives have also maintained that the new network will complement, not compete with, Ethereum, enabling stablecoin payments to scale to mainstream users and businesses.

As Carrone put it, “Time will tell if we were wrong or not. I think with time things will become more and more clear.”

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