Paradigm Review: 5-year-old Investment Fund Specializing In Crypto Projects

April 16, 2023 - Around 13 mins mins to read

Paradigm, a crypto mogul, has shaken the blockchain and crypto sector by announcing a $2.5 billion venture fund for crypto firms and protocols in 2021. Let’s learn details about this project with Coincu through this Paradigm Review article.

Paradigm Review: 5-year-old Investment Fund Specializing In Crypto Projects 6

What is Paradigm?

Paradigm is an investment fund that focuses on cryptocurrency startups. The fund’s investing strategy is flexible, long-term, and staged. They often invest in the early phases of a new project and will increase their investment in such initiatives later on.

The company’s headquarters are in San Francisco. The fund invests in cryptocurrency assets and enterprises from inception to maturity.

Maybe this is seen as the fatal meeting of the two Paradigm co-founders, Coinbase’s Series B round of funding with Sequoia investment fund. At the time, Fred Ehrsam was a co-founder of Coinbase, and Matt Huang was a Sequoia Capital partner as well as an angel investor.

They felt complementary in many respects after numerous further meetings and discussions and created the investment fund Paradigm together. They wish to collaborate on high-quality initiatives in the cryptocurrency sector.

After an extraordinarily successful era of investment and expansion, they announced a massive investment fund ($2.5 billion) in 2021. This sum surpasses the $2.2 billion mark established by the z16z fund in the middle of the year. Assist them in becoming the largest cryptocurrency fund ever.

Paradigm is a “Crypto-native” investment fund, which means it is fully focused on crypto projects/companies from the beginning. The investment limit of Paradigm will vary from $1 million to $100 million, depending on the size of each project.

According to the company, the money may help the project in a variety of ways, from technical (mechanism design, smart contract security, engineering) to operational (recruitment, regulatory strategy).

Team

Fred Ehrsam (Co-founder, Managing Partner)

Fred Ehrsam is a Paradigm co-founder and managing partner. Fred previously co-founded and served as President of Coinbase, the biggest cryptocurrency startup in the United States, from 2012 until 2017. Fred purchased his first Bitcoin in 2011 and is now an angel investor in some of the most prominent firms in the field.

Fred formerly worked as a currency trader at Goldman Sachs in New York. Fred graduated from Duke University with honors and departmental distinction in computer science and economics.

Ehrsam was named one of TIME’s 30 Under 30 Who Changed the World in 2014. He was also included in Forbes’ 30 Under 30 list that year.

Matt Huang (Co-founder, Managing Partner)

Matt Huang is Paradigm’s Co-Founder. Matt was a partner at Sequoia Capital from 2014 to 2018, focused on early-stage venture capital investments in mobile and internet firms and directing the firm’s efforts in the field. The electronic money industry. Prior to joining Sequoia, Matt was the Founder and CEO of Hotspots, a YCombinator-backed startup that was purchased by Twitter in 2012.

Matt is also an angel investor in firms such as Toutiao and Instacart, and he purchased his first Bitcoin in 2012. Matt received his bachelor’s degree in mathematics from the Massachusetts Institute of Technology. He is also a KOL on Twitter, having over 87k followers on his own account.

Alana Palmedo

Alana Palmedo is a partner and the COO of Paradigm. She is in charge of all elements of the company’s operations, financial, legal, business growth, and investor relations. Alana has an MBA from MIT Sloan as well as a BBA from Pacific Lutheran University. Alana started her work with Cascade Investment, LLC, in 2008. She then joined the Boston University Investment Office’s investing staff.

Nathan Apsel

Nathan Apsel is Paradigm’s Chief Financial Officer (CFO). Nathan previously worked as the CFO of 8VC before joining Paradigm. Nathan formerly worked as a Senior Manager at PricewaterhouseCoopers (PwC). Nathan graduated from the University of Oregon with a MAcc and a B.S.

Reena Jashnani-Slusarz

Reena Jashnani-Slusarz works as General Counsel at the company. Prior to joining the company, she was the head of legal and compliance at Elementum Advisers, LLC. Previous to that, she was Deputy General Counsel and Chief Operating Officer of Mesirow Advanced Strategies, Inc. Reena began her legal career in the Investment Funds division at Sidley Austin LLP. Reena received her B.A. from Michigan and her J.D. from the University of Illinois.

Georgios Konstantopoulos

Georgios Konstantopoulos is the Chief Technological Officer and Research Partner of Paradigm. He works on Paradigm portfolio firms and does research on open-source protocols. Georgios was formerly an independent consultant and researcher specializing in cryptography, information security, and mechanism design. The Aristotle University of Thessaloniki awarded him a Master of Engineering in Electrical and Computer Engineering. Now, the Paradigm Review article will learn about the project’s portfolio.

Portfolio

Following more than four years of existence, Paradigm has only invested in more than 50 projects, a small amount that demonstrates the fund’s careful selection of salary rather than wide investment. Moreover, the fund will go the extra mile to assist the project from its inception until it is “brought to light.”

Paradigm’s portfolio demonstrates that they invest in a variety of sectors rather than concentrating on a single application.

It has been at the fore of a group of “crypto” venture capital companies aiming for mobile investing or betting in the high-potential digital sector. FTX, Coinbase, BlockFi, Maker, Uniswap, and Sky Mavis are among Paradigm’s most well-known investments.

The portfolio of Paradigm includes the following sectors: Company, NFT & Metaverse & Game, Layer, Infrastructure, Dex & Derivatives, Lending, Financial Service, Wallet, Privacy, Synthetic Asset, and others.

Moreover, Paradigm invests in a variety of Ethereum-related initiatives. In addition, the fund launched a toolkit for projects in this ecosystem, displaying their significant trust in the development of Ethereum and applications on this potentially powerful platform.

Because of the diverse nature of the projects in the portfolio, below are just a few highlights from Paradigm’s investing process. After that, we will look at a few notable initiatives from each industry.

Company

Amber has secured $28 million in Series A investment from crypto titans Paradigm and Pantera, as well as Polychain Capital, Dragonfly Capital, Blockchain.com, Fenbushi Capital, and Coinbase Ventures.
BlockFi is a startup that offers cryptocurrency investors wealth management tools that are all enabled by blockchain technology. BlockFi is a major firm with a market capitalization of $3 billion as of March 2021.
Coinbase is a firm that specializes in delivering goods for the cryptocurrency industry; they began with the Coinbase exchange.
Genesis Digital Assets is one of the world’s biggest and most experienced Bitcoin miners. The $431 million transaction was invested by Paradigm in September 2021.

NFT, Metaverse, and Game

Axie Infinity is one of the biggest NFT gaming ecosystems, with over 2 million participants worldwide. Axie Infinity was funded $ 152 million in Series B in early October 2021, headed by a16z and with participation from various funds, including Paradigm.
ArenaX Labs is the parent business of AI Arena, an Ethereum-based game in which users worldwide may purchase, train, and combat AI-powered NFT characters.
Fractional, an NFT selling platform that enables users to “buy, sell, and mine NFT jigsaw pieces,” has secured $7.9 million in a seed round headed by Paradigm and co-invested in by Robot Ventures, Delphi. Digital, Variant Fund, Divergence Ventures, Flamingo DAO, and Mechanism Capital.
Royal is the creator of an NFT-based music platform that allows for the purchase of song ownership. It also enables musicians to make music, turn it into non-fungible tokens (NFTs), and sell it using digital asset technology. Royal attracted up to $55 million in cash from prominent investment groups such as a16z, Founder Fund, Coinbase…
Parralel: An NFT sci-fi game, successfully secured $50 million from Paradigm with a value of $500 million.
Zora is an Ethereum-based marketplace for NFTs. To construct the platform, the project has secured $2 million in funding.

Projects on Layers 1 and 2

Paradigm has invested in Layer 1 projects in addition to Bitcoin and Ethereum:

Tendermint is the lab that created the Cosmos Hub and the Cosmos ecosystem. In March 2019, Paradigm led a $9 million Series A investment in Tendermint, with participation from Bain Capital, 1confirmation, and a number of other venture capital firms.
Mina (created by O(1) Labs): Mina Protocol has received $15 million from funds headed by Coinbase and Paradigm in April 2019. This is the project’s Series A.
Optimism: An Ethereum Layer 2 Optimistic Rollups Solution. Optimism received $3.5 million in January 2020 from Paradigm and IDEO CoLab Ventures. Optimism successfully received $25 million in Series A funding in February 2021, headed by a16z and with assistance from Paradigm.
StarkWare: Another Layer 2 Ethereum solution that uses the ZK-Rollups method, with Layer 2 projects like as dYdX, Sorare, and Immutable under development,… The project will be completed in March 2021. Paradigm led the $75 million Series B round, including participation from Three Arrows and
Alameda Research. In November 2021, the project announced the successful Series C investment, obtaining $ 50 million at a value of $ 2 billion, lead by Paradigm.

DEX

Uniswap: In July 2020, the Uniswap exchange secured 11 million USD in funding from a16z, Union Square Ventures, Paradigm, and ParaFi Capital.
Osmosis: In October 2021, Paradigm, Robot Ventures, Nascent, Ethereal, Figment, and Terraform Labs CEO Do Kwon announced a $21 million investment in Osmosis. The fundraising round was headed by Paradigm. In the Cosmos ecosystem, this is a DEX.

CEX

FTX: In July 2021, the FTX exchange received $900 million with a value of $18 billion, with firms such as Paradigm, Sequoia Capital, Ribbit Capital, Third Point, Lightspeed Venture Partners, Coinbase Ventures, Softbank, Sino Global Capital, and Multicoin Capital contributing.
Bitso: In May 2021, the Bitso exchange secured $250 million in Series C funding with a value of $2.2 billion.
CoinSwitch Kuber: In January 2021, the CoinSwitch Kuber exchange secured $15 million in Series A funding headed by Ribbit Capital and Paradigm.
Tagomi – Unknown: In March 2019, Paradigm engaged in a $12 million capital-raising round for Tagomi, which also included Pantera Capital. This is a platform for institutions to purchase and sell premium currencies. Tagomi was then bought by Coinbase in 2020.

Synthetic Assets/Derivatives

dYdX: In June 2021, dYdX announced a $65 million Series C investment led by Paradigm. CMS Holdings, CMT Digital, Electric Capital, HashKey Capital, and StarkWare are among the funds taking part.
Opyn: In February 2021, Paradigm led a $6.7 million fundraising round, which included Dragonfly, Synthetix co-founder Kain Warwick, and Aave founder Stani Kulechov.
Coinbase Ventures, Paradigm, and IOSG contributed $12 million to Synthetix in a fundraising round in February 2021.

Lending

In their Portfolio, Paradigm has a strong interest in this subject. In 2019, they invested in two major brands in the top protocol lending, MakerDAO, and Compound. Then, gradually, go on to the following initiatives such as Euler, Yield Protocol, and so on.

Infrastructure

Tendermint – Series A: Tendermint is the lab that created the Cosmos Hub and its ecosystem. In March 2019, Paradigm led a $9 million Series A investment in Tendermint, with participation from Bain Capital, 1confirmation, and a number of other venture capital firms.
Skynet Labs – Strategic: In March 2020, Paradigm and investment funds, including Bain Capital Ventures, Bessemer Venture Partners, A.Capital, Collaborative Fund, Dragonfly Capital Partners, Hack VC, INBlockchain, and First Star Ventures invested $3 million USD in Skynet Labs, the project behind the Sia network’s hosting platform.
Gauntlet Network – Seed: In October 2020, Gauntlet Network secured $4.3 million in seed funding headed by Paradigm. This is an infrastructural component that aids in the development of DAO autonomous governance.
Chainanalysis – Series D: In March 2021, Chainanalysis raised $100 million in Series D at a $2 billion valuation. It is a data platform that makes data available to projects, individuals, and organizations.
Placeholder and Paradigm invested 11 million USD in March 2019 in Erasure Bay, a decentralized market for data for prediction.
Flashbot: A project funded and developed by Paradigm to explore and mitigate the detrimental effect of MEVs on Ethereum. It is unclear how much money they get from Paradigm, although Paradigm is the project’s only financial partner.
Keep Network: A project that converts Bitcoin into Ethereum for usage in the Ethereum ecosystem, as well as a security layer solution for blockchains that enables users and apps to store data. They were funded $7.7 million in April 2020, with participation from Paradigm Capital, Fenbushi Capital, and Collaborative Fund.

End User Services

TaxBit – Series B: In August 2021, TaxBit successfully raised capital of 130 million USD at a valuation of $1.33 billion in Series B of the project. The deal was led by IVP and Insight Partners, including participation from Tiger Global, Paradigm, 9Yards Capital, Sapphire Ventures, and Madrona Venture Group.
Diem – Seed: Diem completed a funding round of unknown value in March 2020, with the participation of Paradigm.
MoonPay – Series A: At the end of November 2021, MoonPay announced the completion of Series A of a $555 million funding deal at a valuation of $3.4 billion. The deal was spearheaded by Tiger Global Management and Coatue, with participation from Blossom Capital, Thrive Capital, Paradigm, and NEA.
Matrixport – Unknown: In December 2019, Matrixport completed a funding round with the participation of Paradigm at an unknown valuation, unknown amount.
Fireblocks – Series B: In November 2020, Paradigm led the $30 million Series B, with participation from Cyberstarts, Tenaya Capital, Swisscom, Galaxy Digital, Digital Currency Group (DCG), and Cedar Hill Capital. In this investment, Fred Ehrsam also joins the board of directors of the Fireblock project.
Argent – Series A: In March 2020, Argent announced it had completed a $12 million Series A funding round, spearheaded by Paradigm and featuring the Compound founder. This is a wallet application for storing and trading decentralized crypto assets.

Conclusion of Paradigm Review

The projects in Paradigm’s portfolio are all listed on key exchanges like as Binance and Coinbase, validating the company’s goal, and the tokens associated with the projects have witnessed tremendous development.

With the purpose of being the earliest and most valuable partner for crypto entrepreneurs and communities, the fund also pledges to “incubate ideas” in the future. In addition to investing in the early phases, the business said that it would subsequently work with category leaders and help organizations at every level.

Since Fred Ehrsam was a co-founder of Coinbase, the connection between Paradigm and Coinbase Ventures seemed to be quite solid when he went to develop Paradigm, as several of Paradigm’s early transactions featured Coinbase Ventures.

Despite the loss of the FTX acquisition in 2022, Paradigm’s reputation is unlikely to suffer much. This fund is well-known for giving technical assistance to the project. As a result, numerous initiatives will look forward to their assistance. Hopefully the Paradigm Review article has helped you understand more about the project.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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