Original title: Paradigm Shifts: Inside one of crypto’s most trusted institutions with Co-founder and Managing Partner Matt Huang
Original article by Dom Cooke, Colossus Review author
Original translation: Rhythm Little Deep
Editors Note: The article details Paradigm, a crypto investment company founded by Matt Huang and Fred Ehrsam, from its origins and development to its unique positioning in the field of cryptocurrency, emphasizing its story of not only investing in the future but also actively building the core infrastructure of the crypto ecosystem through research-driven and technological innovation, attracting top talent and driving industry progress.
The following is the original content (for easier reading and understanding, the original content has been reorganized):
“Sometimes I feel like I’m running the X-Men Academy,” Matt Huang says of his $12 billion crypto investment firm, Paradigm, a place where he sees exceptional geeks with extraordinary abilities.
Take Charlie Noyes, the company’s first employee. The 19-year-old MIT dropout who didn’t even know how to use a calendar showed up five hours late for his first 10 o’clock meeting, unapologetic; he’s now a general partner. Or Georgios Konstantopoulos, Paradigm’s chief technology officer, who went from being a World of Warcraft addict to one of the most prolific engineers in crypto. Or a developer known only by the X-account “transmissions11,” whose talent Paradigm discovered through a Discord server when he was in high school.
“Sometimes they create such maddening chaos that you want to pull your hair out,” Huang said. “But then you see what they’re capable of, and it’s like, oh my god, no one else in the world can do this.”
On the chilly morning I visited Paradigm in San Francisco, two members of Huang’s team were working on a mechanism that could reshape how hundreds of billions of dollars in digital currencies flow through the financial system. In a top-floor conference room designed to curve like a cathedral whispering gallery, partner Dan Robinson, wearing Paradigm’s green Nike Air Force 1s, tapped the floor and explained their latest breakthrough at the speed of high-frequency trading. Research partner Dave White, wearing hexagonal glasses and a scraggly beard, hunched over his laptop, pausing occasionally to discuss the equations behind the idea he had invented. Huang listened intently, a stocky man in a plain black Japanese sweater who carries himself with the quiet authority of someone who is always ahead of the curve.
“Everything he touches is extraordinary,” said Doug Leone, who headed Huang’s firm at Sequoia from 2014 to 2018. “He’s incredibly smart and incredibly humble. It’s hard to meet Matt and not feel like he’s special.”
Through two giant arched windows above San Francisco’s Union Square, the concrete towers of traditional finance loom to the east, while the cluster of SoMa startups stretches to the south. It’s a great vantage point for a company bridging traditional finance and cutting-edge technology—and for Huang, who has made a career out of spotting revolutionary potential.
In 2012, during a weeklong vacation in Beijing, he visited a startup operating out of two apartment units. The founder, Zhang Yiming, was building a personalized news app—an idea Huang initially thought was doomed to fail. But sitting at an old Ikea table near a dusty refrigerator, watching Zhang speak through a translator, Huang noticed something that transcended language: “I remember having a deep intuition that this guy was extremely capable, focused, and aggressive, but also balanced and didn’t let himself break down. He had a very strong clarity about what he wanted to build, and an ambition to conquer the world.” Zhang was the most impressive person he had ever been around—so impressive that Huang had to invest. That company became ByteDance, the creator of TikTok, and Huang’s stake has now turned into a nine- or ten-figure fortune—he doesn’t do spreadsheets, so he can’t give an exact number.
This instinct for spotting talent is at the heart of Paradigm. In 2018, Coinbase co-founder Fred Ehrsam approached Huang at Sequoia with a vision for a different kind of investment firm. They started out as equal partners, but Ehrsam has since stepped back to split his time between cryptocurrency and his new brain-computer interface startup, and he believes Huang was “born to run Paradigm.”
The son of one of the world’s most prominent financial theorists and a pioneering computer science professor, Huang grew up at the intersection of math, economics, and technology. In six years, his firm has grown from $400 million under management to more than $12 billion by investing heavily in early, foundational crypto projects while building important parts of crypto’s core infrastructure. Paradigm’s researchers—who are also investors—develop foundational innovations and then open source them for the entire industry to use. It’s an unusual approach for a financial firm, but Paradigm isn’t a typical investment firm. It’s more like a combination of a research lab and an engineering team, wrapped in a sophisticated shell of West Coast Wall Street.
Hes very smart and extremely humble. Its hard to meet Matt and not feel like hes special. --Doug Lyons, Sequoia Capital
Back in the penthouse, Robinson and White are working on “bullseye liquidity,” a breakthrough that could change the way stablecoins—digital tokens pegged to the U.S. dollar—are traded. Stablecoins have become a key part of the crypto financial plumbing, but their trading infrastructure is still primitive, with each pair requiring a separate pool of capital. Their innovation brings these fragmented markets together into an efficient system. While this could offer significant advantages to Paradigm’s portfolio companies, like Uniswap and Noble, they plan to make their research public on their blog. “We’re totally fine if someone else implements this idea and makes crypto better overall,” Robinson says.
White paused his work verifying a mathematical proof with OpenAI’s o1 Pro to refine an idea about n-dimensional space. On the screen, Robinson projected a mathematical visualization that looked like a quarter of Captain America’s shield. Huang mostly listened—he always preferred to listen—but when he spoke, it was clear that he had absorbed the complexity of what they were showing him.
Years ago, when they were kids, Robinson recalls, their circle of friends would argue endlessly until Matt spoke up. “He doesn’t talk much,” Robinson says, “but we always end up doing what he says.” Those who know Huang best describe him as a man whose quiet exterior belies his extraordinary abilities. “When you talk to Matt, the insight is high every minute, even when he’s silent,” observes Stripe co-founder Patrick Collison, who added Huang to its board in 2021. His meticulous attention extends to everything he touches—from the speed of Paradigm’s site to his preference for niche Japanese streetwear to the people he hires. “He has a high standard for excellence,” says Coinbase CEO Brian Armstrong. “He has zero tolerance for mediocrity.”
Yet beneath that intensity is a disarming humility. As Leone puts it, “He has a great sense of humor, but because he has so many good qualities, you can’t help but take him seriously.” Perhaps most tellingly, these insights come from others—Huang is the kind of man whose greatest achievements are whispered rather than announced, whose impact is more felt than advertised. “Not every great investor or leader is a good person,” Collison adds. “He passes all the integrity tests of ‘Can this person be the godfather of your children?’ He passes with flying colors.”
Paradigm isn’t a typical investment firm. It’s more like a combination of a research lab and an engineering group wrapped in the sleek shell of West Coast Wall Street.
This combination of technical excellence and quiet integrity has helped Paradigm become one of the most important institutions in crypto. In an industry that has grown from zero to $3 trillion, through multiple speculations and crashes, the company’s open source tools now power 90% of smart contract development. Its innovations have helped hundreds of billions of dollars in digital currencies move more efficiently. Its investments have earned the trust of the world’s most sophisticated investors, including Harvard, Stanford, Sequoia, and Yale.
Awakening
One of Matt Huang’s earliest memories is of walking the streets of Tokyo alone at age nine, navigating the world’s largest city. Every morning, he made the hour-long commute to school through narrow alleyways and busy thoroughfares. This early independence shaped his worldview. “Once you have the contrast of the two experiences,” he says of comparing Tokyo to New York, “it changes your perspective on everything.”
In 1997, his father, Chi-fu Huang, was sent to Japan to set up the Asian office of Long-Term Capital Management (LTCM), and the family moved to Japan. Before the relocation, Chi-fu Huang managed LTCMs Asian trading business in Greenwich, working from 4 pm to 3 am to match market hours. As the only son among four sisters in Taiwan, Chi-fu Huangs parents used their meager savings to send him to the United States alone. From there, he worked his way up to become an economics professor at MIT, then joined Goldman Sachs to create and lead the fixed income derivatives research department, and finally joined LTCM - a team of Nobel Prize winners that perfectly blended academic theory with market practice.
Huang’s mother, Marina Chen, also forged her own path in academia after immigrating from Taiwan. At Caltech, she pioneered parallel computing research under the mentorship of legendary technologist Carver Mead, developing techniques still used in modern processors today. Although she seemed destined for a distinguished academic career as one of the first female computer science professors at Yale, Chen chose to leave academia to focus on raising her three sons, channeling her intellectual passion into their education.
Dinner at the Huang household is like an investment committee meeting. Every night, when the kids hear the garage door open, they scramble to finish their dad’s reading assignments—carefully selected, age-adjusted texts ranging from Principles of Economics to Scientific American. At dinner, they answer questions on their respective topics. Each brother has developed a different mechanism for coping with his parents’ intensity. According to the oldest, Matt, his instinct is to rebel.
Their time in Tokyo came to an abrupt end in 1998, when LTCM’s model failed in the Russian financial crisis. The crash wiped out the Huang family’s savings. Yet Huang rose from the ashes to co-found Platinum Grove Asset Management in 1999 with LTCM colleague and Nobel laureate Myron Scholes. The firm grew from $45 million to $6 billion in less than nine years, becoming one of the world’s largest fixed-income hedge funds before the 2008 financial crisis. This pattern of seeing opportunity in chaos, of building something new out of a systemic collapse, became familiar to his son.
After Tokyo, the New York suburb of Scarsdale became Huang’s fourth home in 11 years. As one of only three Asian students in a predominantly Jewish school, these constant moves and cultural adjustments honed his ability to read social dynamics and connect with different personalities.
In class, Huang couldn’t sit still. His restlessness led to his expulsion from a Chinese weekend school for repeatedly disrupting other students. “Uncontrollable,” his parents later described him at their wedding. Yet when on his own terms, he demonstrated an ability to focus. With his group of “uncool but academically inclined” friends, Huang directed amateur films, debated libertarian philosophy, and mastered gaming. His approach to StarCraft—competing semi-professionally on international servers—presaged his signature attention to detail, a trait that even extends to his current obsession with handstands.
Zhang spoke through a translator, but Huang found himself drawn to the founder’s nonverbal cues — his gestures, expressions and intensity painting a picture that could be understood without words.
All that changed when he discovered math. Math club revealed his natural affinity for the subject, and while he wasnt at the top of the national competition, it proved to his parents that their unruly son could excel in school if properly challenged. Poker and chess became other outlets for his analytical mind.
The reformed student worked his way into MIT, where, in 2006, he found himself in “one of the most geeky places on the planet.” He studied math, taking a semester off to play online poker while operating eight tables at once. But the defining moment (besides meeting his future wife) came when a close friend, Albert Ni, announced he was dropping out to join a small startup called Dropbox as its sixth employee. For someone trained to be a PhD, giving up his bachelor’s degree seemed unthinkable. Yet Ni was no failure—he was one of the most capable people Huang knew, making a deliberate choice to build something new. This led him to read all of Paul Graham’s writing, through which Huang discovered Silicon Valley and the lure of the ultimate traitor: to carve out your own path.
In his last year at MIT, Huang and his roommate applied to Y Combinator and were initially rejected. Graham told them, “We like you guys, but we hate your ideas.” Six months later, with a working prototype, they were accepted. The MIT graduates drove across the country to San Francisco in six days. At YC, they built what Huang now calls a “bad idea” — Hotspots, a TV guide site for the streaming age. This two-year “failed startup” experience still left him with a deep empathy for founders and led to the acquisition of Twitter, where he observed a company that was “poorly managed” before going public.
By 2012, Huang was ready to forge a new path. Silicon Valley had become too obvious, in his view; the consumer space was too predictable for interesting work and big rewards. On a week off from Twitter to consider launching a tech company in China, he traveled to Beijing to meet with six founders. One was Zhang Yiming, who was building a consumer app that seemed doomed to fail. Zhang spoke through a translator, but Huang found himself drawn to the founder’s nonverbal cues—his gestures, expressions, and intensity painted a picture that could be understood without words. “I have to find a way to support this guy,” Huang thought as he left the apartment.
He wrote checks when ByteDance was valued at $20 million and $30 million, his largest personal investment at the time. Now ByteDance is worth $300 billion, and his investment has grown about 10,000 times—$500,000 has become $500 million. He still owns a majority stake, and while he’s “getting more and more indifferent about it,” he admits that “it definitely blows your mind, and it’s probably the best investment I’ve ever made.” That same year, he made seed investments in YC companies Instacart, Benchling, PlanGrid, and Amplitude in San Francisco—all of which are now worth billions of dollars.
When he got an email from a Sequoia recruiter while at Twitter in 2014, he initially thought it was spam. Despite his impressive track record, he had no intention of becoming an investor. But curiosity got the better of him, and his interview assignment — a one-page report on a company Sequoia should invest in — led him to write about Coinbase, which had just seven employees at the time.
At Sequoia, Huang found what he calls “the highest standards I’ve ever experienced.” On his second day at work, Facebook acquired WhatsApp for $19 billion, and the partners gathered briefly in the break room. Champagne was poured but untouched. Within five minutes, everyone was back to work. The multi-billion-dollar exits pale in the shadow of the firm’s storied portfolio, which includes trillion-dollar companies like Apple, Google, and Nvidia. The culture demanded excellence in ways that heightened his already sizable ambitions.
“You start to see how far the axes can be stretched, what great founders look like,” Huang says of his four years there. “If you’re not exposed to that, your whole sense of what’s possible is missing the dynamic range at the top end.” Sequoia also showed him that excellence comes in many forms. Working with investors who have very different styles but align on key dimensions gave him the confidence to develop his own approach: “It was very liberating to realize I could do things my own way.”
Sequoia got a valuable payback. “Sequoia US was getting beat by Sequoia China every year in the poker tournament,” Leon recalls. “He went and won it back for Sequoia US. Thanks to Matt Huang, we brought back Don Valentine’s crazy colorful jacket.” You won’t hear this story from Huang, who never brags about his accomplishments. Like many of his stories, you have to hear it from others, or know what to ask.
Leaving Home
Huang first encountered Bitcoin at MIT in 2010 and was immediately attracted by its elegant fusion of mathematics, economics, computer science and game theory.
“In my heart, I thought it was a very beautiful idea,” Huang recalls. But in the early days, it was more of an intellectual curiosity than an investment opportunity. It wasn’t until 2012 that he bought some bitcoins on Mt. Gox, then a major exchange, and experienced the first big bubble. “You almost have to lose money the first time,” he reflects, “and then you give up and think it’s dead. When you see it’s revived and not dead, you start to get curious.”
Legendary investor Michael Moritz called Huang “the only regrettable loss in Sequoia’s history,” according to multiple sources. “He was the first person in my career to voluntarily leave Sequoia,” Leon said.
At Sequoia, Huang found that few colleagues shared his growing belief in the importance of crypto. The firm supported his interests — he led several crypto investments on its behalf — but he increasingly sought conversation partners outside the firm. He began attending monthly dinners in San Francisco to discuss cutting-edge ideas about the emerging technology with six to eight crypto-curious investors.
It was during this period in 2017 that Fred Ehrsam, who had just stepped down as president of Coinbase, wrote a blog post arguing that cryptocurrencies were the metaverse. Huang, still at Sequoia, contacted him to discuss the idea. “I know I’m not going to build a company around this,” Ehrsam thought, “but it would be fun to pitch this idea to Sequoia for fun.”
What started as an intellectual exercise turned into a 40-email discussion between the two men, digging deeper into the possibilities of crypto. Their backgrounds complemented each other perfectly: Elsam had co-founded and run the most important company in the crypto space, while Huang brought top-notch investment experience.
“Nothing felt quite right until I met Matt,” says Elsam, who has discussed starting a crypto-focused fund with several potential partners. Over six months, they methodically explored collaboration, testing each other’s alignment on everything from investment philosophy to fund structure. They were particularly focused on ensuring a true partnership — everything was split 50-50, a principle that “drove some people crazy” but was essential to the two of them.
Leaving Sequoia was painful for Huang. It was the first place he’d truly felt like he belonged: “It felt like a place I could retire, if they’d kept me.” Legendary investor Michael Moritz called Huang “the only regrettable loss in Sequoia’s history,” according to multiple sources. “He was the first person in my career who took the initiative to leave Sequoia,” Leon said. But Huang was convinced that crypto would become one of the most important technology trends in the coming decades. “It was easy to let go when he told me he thought this was a once-in-a-lifetime opportunity. Follow your dreams and go for it,” Leon said with a hint of regret. “I was mad at myself because he kept talking about Bitcoin, and I usually have a pretty good nose for it. If I was really smart, I would have followed that lead and created an opportunity for him to do a fund inside Sequoia.”
Disrupting the Status Quo: Huang and Elsam
Huang and Elsam founded Paradigm in June 2018 based on two theses: first, that crypto would be one of the most important technological and economic shifts in the coming decades; and second, that the space lacked the kind of investors they, as entrepreneurs, wished they had — investors who were deeply “crypto-native.”
Graham Duncan, founder of East Rock Capital and an advisor to Paradigm—whom Huang credits as the most helpful person in the company’s early days—was struck by their conviction from the start. “It was almost absurd to me that they were always planning what was possible from a scale perspective,” Duncan said. “It was astounding to me, but not at all arrogant. Their time horizon was completely different, and the things they planned eventually happened.”
They raised their first fund in late 2018, bringing in $400 million from top institutions including Harvard, Stanford, and Yale — universities making their first major crypto investments — and Sequoia. The fund had a novel structure: open-ended, with no fixed timeline for capital returns, and allowed to hold both public crypto assets and private investments. Then they made an even bolder move: Unlike most venture capital firms, which call capital gradually, they quickly called for the full $400 million and began buying bitcoin and ethereum evenly, with those positions initially accounting for about 90% of the fund. Bitcoin was bought in at an average price of between $4,000 and $5,000 a coin — a huge bet that the crypto winter that saw bitcoin fall more than 70% in 2018 would eventually thaw.
Their first three employees embodied different aspects of their vision. Charlie Noyce, whom Huang met in a Telegram chat discussing a Bitcoin Cash fork, became their first employee. “From his messages, I thought he was a 40-year-old with a beard, very cynical and rough,” Huang recalled. “When he showed up at the dinner, I was really surprised that he was only 19.”
Noyce has been immersed in the crypto world since he was 12, discovering Bitcoin through the gaming community. He has published papers on crypto applications and won the Intel Science Fair twice before dropping out of MIT and then from there to join Paradigm. He initially had a hard time adjusting to office life—he thought it was normal to “review investment plans via email and come into the office once a week.” When he arrived late on his first day, Huang sat him down and explained career expectations. That patience paid off.
Today, the 25-year-old Noyce is a general partner at Paradigm. Huang compares him to an artist who can make intuitive leaps by compressing a lot of scattered information and ultimately come up with a clear investment thesis. For example, he identified MEV (maximum extractable value) as a key issue for blockchain in 2020 and became the lead investor in Flashbots, whose infrastructure now touches almost every transaction on Ethereum, establishing key market rules for the $450 billion ecosystem.
Dan Robinson, Huang’s middle school friend and “the smartest guy I knew as a kid,” embodied the technical depth needed to advance the frontiers of crypto. After Harvard Law School let him down, Robinson turned to programming and explored crypto while working at blockchain company Stellar. Huang and Elsam tailored a unique role for him that spanned investing, research, and helping build portfolio companies. This compromise became the template for Paradigm’s research-driven approach, and Robinson subsequently invented key mechanisms for crypto’s leading decentralized exchange, Uniswap.
She was the third partner with Matt and Fred and built the firm from the ground up. —Graham Duncan, East Rock Capital
Paradigm managing partners: Huang and Palmedo
Alana Palmedo joined Paradigm four weeks after its founding, when the company was still renting office space by the week, and brought the institutional rigor needed to bridge crypto and traditional finance. While she wasn’t “crypto-savvy,” her experience managing complex operations at the Boston University Foundation and Bill Gates’ investment office, especially during the 2008 financial crisis, proved invaluable. Initially skeptical, she was won over by the thoughtful way Huang and Ersam were building an institutional-grade company, as well as her instinct as a value investor that Bitcoin had fallen so low, “this had to be the bottom.”
“She was the third partner with Matt and Fred and she completely built the firm,” says Duncan, who helped interview Palmedo. She initially managed everything from trade settlement to finance to compliance, then hired experts for each function to free up the investment team to focus on deals. Now, as managing partner, she has built Paradigm’s high-performance culture, demanding radical transparency and daily self-reflection from everyone, regardless of their role. “Everyone has to be in the top 1% in their field,” Palmedo insists.
By mid-2019, as crypto prices began to recover but most investors remained cautious about the space, Paradigm entered the market again. Its initial investor base pledged another $360 million. The timing embodied Huang’s approach: raising capital when others were skeptical, and gaining support from partners who believed crypto would fundamentally reshape finance.
While crypto has yet to fully deliver on its transformative promise, Paradigm’s investments have delivered exceptional returns. Its first flagship fund grew from $760 million to $8.3 billion by the end of 2024, according to public filings. Paradigm has also returned all of its limited partners’ initial capital, paying out more than $1 billion from the fund, according to sources close to the firm.
Long-term vision
Despite Paradigm’s early success, one can’t help but wonder why Huang, who no longer had to worry about money and seemed to have a perfect job at Sequoia, would bother getting involved in the wild world of crypto.
Coinbase CEO and co-founder Brian Armstrong pondered a similar question — “Who would leave a job like that at Sequoia, right?” — and responded, “He’s a silent killer. We need more people like him in our industry who have high integrity and work for the long term and for the right reasons. He has such strong convictions that he takes an unconventional path.”
For Huang, the answer is simple: “I guess I’ve always been a little skeptical of authority, so when I see authority exerting influence, I wonder: Is this the way we want the world to work?”
“Americans look at China and say, that looks like a dystopia,” he said. “I don’t think they fully realize the same thing is happening in the West.”
Take the Obama administration’s Operation Choke Point, for example, where the U.S. Department of Justice sought to restrict certain industries from accessing banking services. Operation Choke Point 1.0 from 2013-2017 targeted industries considered “high risk” like payday lenders and high risk industries like payday lenders and gun dealers. Under the Biden administration, Operation Choke Point 2.0 focuses on “debanking” crypto. Even individuals like Uniswap founder Hayden Adams and Gemini co-founder Tyler Winklevoss have seen their personal bank accounts suddenly closed for no reason.
Huang believes crypto will evolve through three key stages: first as currency, then as a financial system, and finally as an internet platform. Each stage builds on the previous one and enables the next. “Currency is upstream of the rest of crypto,” he explains. “Buying your first Bitcoin or setting up your first wallet is often the first step to using other crypto applications. It’s like getting your AOL account and connecting to the internet for the first time.”
The currency phase has produced amazing results. Bitcoin has grown from a white paper in 2008 to an asset worth nearly $2 trillion today, making it the most valuable startup since its launch. Amazingly, even countries — including the United States — are beginning to adopt it.
Institutions that scoffed at the industry in 2018 (like BlackRock CEO Larry Fink, who once called Bitcoin the “money laundering index”) now embrace the technology. In 2024, BlackRock’s Bitcoin ETF gathered $50 billion in just 11 months—the fastest-growing ETF launch in history. Traditional portfolio models are also shifting, with Fidelity now recommending 1-3% crypto exposure. The classic 60/40 portfolio is becoming a “59/39/2” as institutions carve out dedicated allocations for crypto assets.
The second phase—building a new financial system—is accelerating. Traditional finance operates through multiple layers of intermediaries, while crypto enables near-instant transactions, 24/7 markets, and new financial instruments, all built on permissionless rails. Stablecoins—blockchain-based digital currencies pegged to stable assets such as the U.S. dollar—demonstrate this potential, growing from $500 million in circulation to over $200 billion since Paradigm was founded.
The third stage — as an internet platform — is still the most nascent and least understood. Unlike today’s internet, where platforms control user data and online assets, crypto has the potential to enable true digital ownership and direct interactions between users, without the need for intermediaries. High transaction costs have hampered the growth of everyday applications like social media and gaming, but Huang believes that will change as new scaling technologies drastically reduce costs. The infrastructure that supports NFTs and memecoins today will eventually enable more serious applications, just as YouTube grew from cat videos to one of the world’s most important platforms.
Huang, Elsam and Palmedo pose for a photo outside the top floor of the San Francisco office.
Of course, like every new technology, crypto has its dark side. Scams and hacks are commonplace, meme coins promote short-term thinking rather than the construction that’s truly needed, token prices fluctuate wildly, projects collapse, and the industry as a whole often looks more like a casino than the future of finance.
Huang, however, takes the long view. Just as the early internet attracted brilliant researchers but also scammers and fraudsters, crypto’s open frontier has fostered both innovation and bad behavior. Each new wave, including speculative bubbles that seem irrational from the outside, has brought new talent and capital to build critical infrastructure.
Stablecoins are a perfect example. The ICO (initial coin offering) bubble of 2017 brought mainstream attention to the crypto space and spawned a new generation of wealthy crypto investors. Some of this capital flowed into the development of stablecoins, leading to significant improvements in their infrastructure. On Ethereum, the cost of sending USDC, a popular dollar-pegged stablecoin, has dropped from $12 in 2021 to $1 today. On Coinbase’s popular Layer 2 network Base, the same transaction costs less than a penny. In turn, the circulation has grown exponentially, up 400x since the bubble burst, and real-world use cases have emerged.
SpaceX uses stablecoins to repatriate revenue from emerging markets, converting local currencies into digital dollars that transfer instantly. Scale AI pays its global data annotation network through stablecoin rails, eliminating cross-border friction and costs. Corporate finance teams like Ramp have discovered another advantage: While savings accounts earn minimal interest, stablecoins backed by Treasury bills can capture much of the earnings that banks typically keep for themselves.
The data bears out this narrative. Transaction volume has grown 120% annually for five consecutive years. In 2024, stablecoins processed $5.6 trillion in payments, nearly half of Visa’s $13.2 trillion. This momentum prompted Stripe to acquire stablecoin payments platform Bridge in October 2024. “Stablecoins are the room-temperature superconductors of financial services,” wrote Stripe co-founder Patrick Collison. “Thanks to stablecoins, global businesses will benefit from dramatic improvements in speed, reach, and cost in the coming years.”
Matt has a unique personality. He is calm, rigorous, and patient—traits that are particularly well suited to a complex technology like crypto, where the consequences are delayed. —Patrick Collison, Stripe
This adoption reflects crypto’s broader evolution: Bitcoin launched in 2009 and reached its first million users in 2011. Ethereum launched in 2015 and reached the same milestone in 2017. It was followed by stablecoins in 2019, DeFi in 2021, NFTs in 2022, and social apps in 2023.
Critics often point to crypto’s lack of impact on everyday business. Huang sees stablecoins as the next killer app, but also distinguishes between “single-player” technologies like AI, which offer immediate utility, and “multi-player” technologies like crypto, which require coordinated adoption. “It’s like adopting a new language or settling a new city,” he explains. “It’s useless if you do it alone.” He points to email as an illuminating analogy. Early critics called it “technically interesting but economically naive,” similar to the skepticism toward crypto today.
In conversations with Huang, his calm attitude toward crypto in general is striking. “Matt has a unique personality,” said Patrick Collison, who added Huang to the Stripe board for both his crypto expertise and his broader business acumen. “He’s calm, rigorous, and patient — traits that are particularly well suited to a complex technology like crypto, where the consequences are delayed.”
What makes him unique is his ability to hold both sides of an investment thesis at the same time. “He can take the bear cases, which are usually much more specific than the bull cases,” Collison says, “and then he understands the possibilities of technology and sees how small, new things can become big things in the future.”
Recently, artificial intelligence has become the new frontier of technology, and its clear and immediate applications have captured the world’s imagination. Huang and the Paradigm team even considered expanding their focus to include AI. But they stand firm on their commitment to cryptocurrency, Huang explained: “We will be fine with or without AI. Crypto is a very important technology that needs to coexist with AI, but there aren’t many good defenders. We think it’s important to commit to it and make sure it really succeeds.”
invention
This commitment to ensuring cryptos success has led Paradigm to develop an unusual approach to investing. While most venture capital firms wait to back winners, Paradigm helps create the conditions for winning. That means more than just analyzing trends or writing checks — it means solving foundational technology problems that expand the capabilities of entire industries.
The firm’s research-driven style came about almost by accident. When Huang hired his high school friend and best man, Dan Robinson, it wasn’t clear how a lawyer-turned-self-taught programmer would fit into an investment firm. “We wanted Dan on the team because he’s the smartest guy I know,” Huang says, “but he wasn’t the most commercial, and we weren’t sure how he’d fit into the investment process.” Largely to get him on board, they created a novel role that included time for Robinson to work on open source projects, which they collectively called “exploratory research.”
“It turns out that this particular genre is really important in crypto,” Robinson explains. “Most investment research is about collecting and analyzing existing information. We try to invent new things.” The research team’s breakthroughs often come from exploring theoretical questions, like bullseye liquidity, before the company even realizes it needs the answers.
What’s unique about crypto is how math can create massive leverage. Traditional exchanges can require thousands of servers and hundreds of employees to match buyers and sellers. But when Vitalik Buterin proposed a simple equation (x*y=k) on Reddit in 2016, he laid the foundation for a trillion-dollar market to run autonomously on the blockchain. The challenge is that this elegant solution, while computationally efficient, wastes a lot of capital by spreading liquidity across all possible prices.
Robinson knew Hayden Adams, who developed Buterin’s concept into Uniswap, from the early Ethereum research community. Within weeks of joining Paradigm, he wrote a memo about Uniswap, led to seed investment, and began actively improving it. His contribution to Uniswap v2 enabled trading between any Ethereum-based token, helping the protocol scale from $2 billion in volume to over $1 trillion.
But Robinson and Adams spent much of 2019 searching for a more fundamental breakthrough. Through mathematical exploration, the team discovered a way to efficiently concentrate liquidity within a specific price range - allowing traders to focus capital where it is actually needed. This innovation became Uniswap v3, which increased capital efficiency by up to 4,000 times. A $5 million position now offers the same trading depth as $2 billion spread across all possible prices. By October 2022, Uniswap was valued at $1.7 billion.
While they compete with other companies, Paradigm can actually help you build a crypto company. They have experts in protocol design, security, legal, and even policy. — Brian Armstrong, Coinbase
This pattern of research leading to breakthrough products has been repeated across Paradigm’s portfolio. Last year, when Blur approached the company about adding margin trading, the team faced a fundamental challenge: How to safely lend against illiquid NFTs whose value is difficult to determine? The research team spent four months developing a new lending protocol, Blend. “If you can solve the lending problem for NFTs,” Robinson noted, “you can probably solve lending for any illiquid asset.” Within months of its launch, Blend created and dominated an entirely new lending category.
Unlike traditional venture capital firms that separate technical resources from investment decisions, Paradigm’s researchers are at the heart of every investment. They attend every pitch and help make every decision. This integration means they often spot opportunities that others miss because they are already working on similar technical challenges. When algorithmic stablecoins like Terra became popular, Paradigm stayed away—years of experience trying to design better stablecoin mechanisms taught the firm that these projects did not solve the fundamental problems.
This deep technical work creates a powerful competitive advantage in finding and closing deals and recruiting talent. “When they’re competing with other companies,” explains Coinbase’s Armstrong, “Paradigm can actually help you build a crypto company. They have experts in protocol design, security, legal, and even policy.”
“The biggest part of our process is figuring out what the most important questions are,” Robinson explains. That requires staying on top of the rapidly evolving frontiers of crypto. “Internet generations are short,” Huang points out, comparing Sherlock Holmes to a network of London street kids getting key intelligence. “Even two years can make a difference in understanding crypto culture.”
This insight led to the Paradigm Fellowship program, which aims to identify outstanding young developers while still in school. The program was born in part from the company’s experience with transmissions 11, who the team discovered through Discord while he was in high school. When he dialed into a pitch session from a school assembly, it highlighted both the challenges and opportunities of working with crypto’s next generation of innovators.
Outlining the next breakthrough: Konstantopoulos, Noyce, and Robinson
Encryption Encryption Encryption
On the last Thursday of May 2023, reporters from crypto news company The Block discovered an event that sparked industry controversy. Through the Internet Archives Wayback Machine, they noticed that Paradigm quietly removed all crypto words from its homepage and social media, repositioning itself as a research-driven technology investment company. This seemingly obvious discovery - despite the change being a month old - triggered an immediate backlash. In an industry where loyalty runs deep and betrayal is severely punished, this felt like a betrayal.
“We don’t want to work for you anymore,” one portfolio company wrote on Twitter, referring to the repositioning and Paradigm’s investment in FTX. “This is a scar on our entire industry.” The criticism stung, but it exemplified crypto’s brutal candor. Paradigm not only restored the word “crypto,” it doubled down, adding a flashing neon sign to its homepage that read: “Crypto Crypto Crypto.”
The reality behind the change was more mundane. Two researchers on the team complained that potential AI collaborators wouldn’t respond to emails after seeing “crypto” on Paradigm’s homepage. “We thought, well, all the crypto people already know us, and they never go to our homepage. They read our blog, and every portfolio company and blog post is crypto-related. So what’s the big deal?” Huang explained. “In hindsight, it was clearly a mistake. People see websites as a collective statement that you’re proud of.” (Patrick Collison noted that the Paradigm website “may be the fastest thing you’ve used this year.”)
Yet the event revealed deeper tensions. By November 2022, Bitcoin had fallen 75% from its 2021 peak to below $16,000. Ethereum fell 80%. That same month, ChatGPT launched, sparking an AI craze that made crypto seem like yesterday’s frontier. Major venture capital firms have turned their attention and capital to AI.
The site controversy marks a humbling period for Paradigm. Just 18 months ago, the company seemed unassailable. Its bitcoin position grew 15-fold. Coinbase, one of its earliest investments, went public at an $85 billion valuation. It raised a $2.5 billion venture fund. Yet the frenzy of 2021 will test even the most disciplined crypto investors.
Fred Elsam saw the warning signs. In March 2021, he sent a letter to portfolio companies titled “Surviving the Crypto Cycle.” After noting that prices had doubled in just two months, bitcoin had topped $1 trillion, and “pixelated crypto art was selling for millions,” he warned, “Even senators have laser eyes! The mania is everywhere.” Drawing on his experience at Coinbase—a third of employees left during the 2014-2017 downturn—he laid out specific preparations: stress-testing systems with 10-100x usage surges, considering raising capital when capital is available, and warning new employees about crypto’s brutal cycles.
Its easier to have a valley year than a peak year. The signal-to-noise ratio is high, prices are down, but in the long run, it doesnt bother us. —Matt Huang, Paradigm
His warnings were prescient but not enough. “We made a lot of mistakes during that period,” Huang reflects. “When you focus too much on your competitors, you become like them.” He explains that watching rival a16z raise huge rounds made them question whether they needed to match that scale. Paradigm grew from 18 to 62 people. “We did let the quality bar slip,” he admits. “I remember compromising at times and feeling like if we didn’t do this or hire that person, we would fall behind. In hindsight, those were the wrong decisions.”
Huang isn’t good with spreadsheets and doesn’t remember the company’s biggest peak-to-trough drawdown, but one moment is etched in his memory: FTX. Paradigm invested $278 million in the exchange, one of the largest investments in the company’s history. By 2022, FTX had become the public face of crypto, with founder Sam Bankman-Fried speaking at conferences, testifying before Congress, and appearing on magazine covers. In October of that year, he keynoted Paradigm’s LP conference. Weeks later, FTX collapsed amid allegations of fraud and revelations that customer funds had been misappropriated.
Failure in investing is devastating, but betrayal is more hurtful. In due diligence, Paradigm had identified a key risk: FTX’s relationship with Bankman-Fried’s trading firm, Alameda Research. The team asked direct questions, only to receive false assurances. Huang later testified at Bankman-Fried’s criminal trial, an experience that reinforced an important lesson about founder consistency.
“It was clear at the time that he was not aligned with our vision for improving crypto,” Huang said. “For him, this was a way to make a lot of money and give it away.” The divide became apparent during policy discussions, with Bankman-Fried advocating for compromises that Paradigm believed would undermine crypto’s core promise.
FTX isn’t Paradigm’s only misstep. The company co-led OpenSea’s $300 million Series C round at the height of the NFT craze, valuing it at $1.33 billion. Since then, that NFT marketplace’s trading volume has fallen 98%. Another portfolio company, BlockFi, went bankrupt following the FTX exposure.
“In venture capital, there are always investments that don’t go as well as you hoped,” Huang said. “That’s always an opportunity to reflect, and we do a lot of reflecting.” He insists that bear markets actually provide clearer signals than bull markets. “It’s easier to have a trough year than a peak year. The signal-to-noise ratio is high, and prices are down, but in the long run, it doesn’t bother us.”
The company emerged from this period smaller and more focused. The investment and research team, which grew to 20 people in 2021, was cut to 11. The criteria were tightened, and new investments added a clear filter: founders must be aligned with Paradigm’s mission to advance the frontier of crypto.
The website incident was revealing in another way. The swift negative reaction showed that the crypto community has come to see Paradigm as more than just an investment firm. It’s a benchmark for the industry.
Writing the future
Behind Georgios Konstantopoulos’s desk sits a mini electric guitar that he occasionally plays during impromptu sessions. The image of the company’s chief technology officer breaking into a riff while discussing blockchain architecture captures the core of his approach: technical savvy combined with an intuitive sense of practicality.
In 2019, Konstantopoulos was a sought-after researcher and software engineer, well-known in crypto circles for his development skills. His technical work was so thorough that his name was constantly mentioned by Paradigm’s portfolio companies.
When Huang first met him at a conference, Konstantopoulos was weighing whether to expand his consulting business or join a startup. But Huang, with his usual ability to spot exceptional talent, saw a different path. He proposed creating a Robinson-like role that would allow Konstantopoulos to combine technology research with investment evaluation.
The role evolved in unexpected ways. In 2020, while helping to implement research for portfolio company Optimism, he noticed that many projects were struggling with the same fundamental problems. The challenge wasn’t the ideas, but the tools needed to build them. Instead of supporting companies one by one, Konstantopoulos wondered if he could build open source infrastructure that could move the entire industry forward.
What people tell you is hard is usually not hard. It’s hard because you don’t have control over your tools. —Georgios Konstantopoulos, Paradigm
This philosophy led to his first major contribution, Foundry. Konstantopoulos spent a weekend building a tool that drastically simplified the process of writing secure smart contracts. Think of it as a spell checker for blockchain code — but instead of catching typos, it prevents multi-million dollar vulnerabilities. Within months, it became the industry standard, and today has 90% market penetration, securing over $100 billion in smart contracts (to date).
But Foundry’s success highlights a deeper challenge. Ethereum, the main platform driving crypto innovation, runs on inefficient software that makes scaling nearly impossible. It’s like trying to stream 4K video over a dial-up connection. Konstantopoulos proposed a bold solution: rebuild Ethereum’s core node software from scratch.
“You’re crazy,” his team said. “It’ll take five years.” But Konstantopoulos earned their trust with a unique hiring approach that knew their abilities better than anyone else. Instead of traditional interviews, he found engineers through contributions to open source projects. “Code doesn’t lie,” he said. “I want to see how people think about real problems.”
The resulting project, Reth, was completed in just 18 months. While its functionality may seem simple — download transactions, execute them locally, and write to a database — its impact is far-reaching. By optimizing this fundamental process, Reth is 80% smaller and 10x faster than alternatives. Major platforms such as Coinbase’s Base, WorldCoin, and Optimism (valued at $1.65 billion in 2022) already rely on its superior performance (launched in June 2024).
These technical contributions form a virtuous cycle. Paradigm researchers identify problems when evaluating investments. The open source solutions they build become industry standards. These tools attract the best developers, who either join portfolio companies, become founders, or sometimes even join Paradigm.
The strategy culminated last October with Paradigm’s spinoff of Ithaca, which it invested $20 million in. As CEO (while retaining his role as Paradigm’s CTO), Konstantopoulos aims to commercialize what his team has built. “What other teams would take 20-30 engineers, seed money, and two years to do,” he noted, “we can do in weeks.”
His confidence comes from having built every layer from the underlying crypto to the user interface, with Reth and Foundry in between. “The things people tell you are hard are usually not hard,” he argues, “they only seem hard because you don’t have control over your tools.” This philosophy of radical bootstrapping—building whatever tools the industry needs—has transformed Paradigm’s role in crypto.
As for his own transformation, Konstantopoulos describes it in typical Greek terms: “Matt is the only mentor I can’t surpass.” Most mentors are eventually surpassed, but in Huang, Konstantopoulos found a leader who grew with the team. While most engineers of his caliber would leave to start their own companies, he and others stayed at Paradigm because Huang grew with them. “They pushed me to be a better version of myself every day,” Huang said. “I didn’t want to be surpassed.”
On the back of Huang’s MacBook, one detail stands out: three stickers lined up perfectly, with the Foundry and Reth logos flanking the Paradigm logo. It’s both a reflection of his attention to detail and a window into his vision for the evolution of venture capital. “What if Sequoia didn’t just back Google, but founded it?” he wonders more and more. The question points to a future where the lines between investors and builders are blurred.
Throughout Konstantopoulos’ journey from gaming fan to architect of crypto’s core infrastructure, Huang and Elsam’s original thesis came to life: crypto needs a different kind of investor. Not just brilliant geeks who can evaluate technology, but builders who can shape the future of finance through code. In an industry inherently hostile to central authority, Paradigm has become one of crypto’s most trusted institutions by focusing on creation rather than control. Huang and his team aren’t just investing in the future — they’re writing it line by line.
