Original Title: Paradigm Shifts

Original Author: Dom Cooke, Colossus Review

Translation by: Hailsman, ChainCatcher

“Sometimes I feel like I’m managing the X-Men Academy,” Matt Huang describes his $12 billion crypto venture capital firm Paradigm as a gathering place for smart mutants with superpowers.

For example, Charlie Noyes, who is Paradigm's first employee. This 19-year-old MIT dropout can't operate a calendar; he was five hours late to his first 10 AM meeting and showed no remorse, but that hasn't stopped him from becoming a general partner; or Paradigm's Chief Technology Officer Georgios Konstantopoulos, who transitioned from a World of Warcraft enthusiast to one of the most prolific engineers in the cryptocurrency space; or the developer known only by the nickname transmissions11, who was discovered by Paradigm on their Discord server while still in high school.

“They can be outrageous at times, especially good at creating chaos that drives you crazy,” says Matt Huang, “but once you see what they can accomplish, you think, wow, no one else in the world can do this.”

On a cold morning, I visited Paradigm's office in San Francisco, where two of Huang's team members were working on a mechanism that could reshape the flow of hundreds of billions of dollars in digital funds within the financial system. In a top-floor conference room, shaped like a cathedral's echo chamber, partner Dan Robinson explained their latest breakthrough at high-frequency trading speed while tapping his “Paradigm green” Nike Air Force 1 shoes on the floor. Research partner Dave White, wearing hexagonal glasses and sporting a messy beard, leaned over his laptop, occasionally stopping to discuss the equations behind his invented concepts. Huang listened intently, his athlete's physique wrapped in a simple black Japanese sweater, exuding a quiet authority that always seemed a step ahead.

“Everything he touches is good,” says Doug Leone, who was Huang's boss at Sequoia Capital from 2014 to 2018. “He is incredibly smart and extremely humble. Very few people have met Matt Huang and not felt he is exceptionally outstanding.”

Through two massive arched windows above San Francisco's Union Square, the concrete towers of traditional finance loom to the east, while startups in the SoMa area stretch to the south. This is a fitting view for a company that connects traditional finance with cutting-edge technology—and for Huang, whose career has been marked by discovering revolutionary potential.

In 2012, during a week-long vacation in Beijing, he visited a startup operating out of two apartment units. The founder, Zhang Yiming, was developing a personalized news app—Huang thought the idea was destined to fail. But sitting next to a dusty refrigerator and an old IKEA table, watching Zhang speak through a translator, Huang noticed something beyond language: “I remember having a deep intuition that this person was extremely capable, focused, ambitious, and yet able to maintain balance without breaking down. He had a very clear vision of what he wanted to build and a strong ambition to conquer the world.” Zhang was the most impressive person he had ever encountered—so impressive that Huang had to invest. That company later became ByteDance, the creator of TikTok, and Huang's stake has turned into a nine- or ten-figure sum—Huang doesn't keep spreadsheets, so he can't tell you the exact number.

That instinct for discovering talent is at the core of Paradigm. Paradigm started in 2018 when Coinbase co-founder Fred Ehrsam approached Huang at Sequoia Capital with a vision for a different kind of investment firm. They began as equal partners, but Ehrsam later stepped back to allocate time to cryptocurrency and his newly founded brain-computer interface startup. Ehrsam remarked that Huang is “the person born to operate Paradigm.”

Huang's parents are a world-class financial theorist and a pioneering computer science professor, and he grew up at the intersection of mathematics, economics, and technology. In six years, his company grew from managing $400 million to over $12 billion by making early, concentrated investments in foundational crypto projects while also building significant parts of the crypto core infrastructure. Paradigm's researchers are also investors, developing foundational innovations and then open-sourcing them for the entire industry to use. This is an unusual approach for a financial firm, but Paradigm is not a typical investment company. It is more like a combination of a research lab and an engineering team, wrapped in the refined exterior of West Coast Wall Street.

“He is incredibly smart and very humble. It’s hard not to feel that Matt is very special after meeting him.”

–Doug Leone, Sequoia Capital

Back in the top-floor conference room, Robinson and White were working on “bullseye liquidity,” a breakthrough technology that could change the way stablecoin trading works. Stablecoins have become a crucial part of the cryptocurrency financial system, but their trading infrastructure remains primitive, requiring independent capital pools for each trading pair. Their innovation consolidates these fragmented markets into a single efficient system. Although this could provide significant advantages for Paradigm's portfolio companies (like Uniswap and Noble), they still plan to publish their research findings on their blog. Robinson said, “If someone implements this idea and improves the crypto ecosystem as a whole, we’re totally fine with that.”

White paused his collaboration with OpenAI on o1 Pro—he was validating a mathematical proof—to refine a concept about n-dimensional space. On the screen, Robinson displayed a mathematical visualization that looked like a quarter slice of Captain America's shield. Huang spent most of his time listening; he always preferred to listen, but when he spoke, it was clear he had fully absorbed the complex content they presented.

Years ago, when they were kids, Robinson recalled that they would argue endlessly until Huang spoke up. “He doesn’t say much,” Robinson said, “but we always end up doing what he suggests.” Those who know Huang best describe him as someone with extraordinary abilities hidden beneath a quiet exterior. Stripe co-founder Patrick Collison noted, “When you talk to Matt Huang, his insights per minute are very high, even though there are many times he doesn’t say a word.” He brought Huang onto the board in 2021. His attention to detail extends to everything he touches—from the speed of the Paradigm website to his favorite obscure Japanese streetwear to the people he hires. Coinbase CEO Brian Armstrong said, “He has very high standards for excellence and does not tolerate mediocrity.”

However, beneath this strong personality lies a disarming humility. As Leone said, “He has a great sense of humor, but because he has so many wonderful qualities, you can’t help but take him seriously.” Perhaps most telling is that these insights come from others—Huangg is the kind of person whose greatest achievements are whispered rather than trumpeted, whose influence is felt more than publicly proclaimed. Collison added, “Not every great investor or leader is a great person. In all the character tests of ‘Can this person be the godparent of your child,’ Huang passes with flying colors.”

Paradigm is not a typical investment company. It is more like a combination of a research lab and an engineering firm, wrapped in the refined exterior of West Coast Wall Street.

This combination of technical prowess and quiet integrity has helped Paradigm establish itself as one of the most important institutions in the crypto space. In an industry that has grown from zero to $3 trillion through speculation and waves of crashes, Paradigm's open-source tools support 90% of smart contract development. Their innovations have helped hundreds of billions of digital dollars flow more efficiently. And their investments have earned the trust of the world's most astute investors, including Harvard, Stanford, Sequoia Capital, and Yale.

Awakening

One of Matt Huang's earliest memories is walking alone on the streets of Tokyo, a nine-year-old navigating the world's largest city. Every morning, he would traverse narrow alleys and bustling streets, spending an hour commuting to school. This childhood independence shaped his worldview. “Once you have N=2,” he said when comparing Tokyo and New York, “it changes the way you approach everything.”

In 1997, Matt Huang's father, Chi-fu Huang, was tasked with establishing the Asian office of Long-Term Capital Management (LTCM), and the family moved to Japan. Before the move, Chi-fu Huang managed LTCM's Asian trading operations in Greenwich, working from 4 PM to 3 AM to align with market hours. Born in Taiwan, Chi-fu Huang was the only boy among five children, with four sisters. His parents sent him alone to the United States with their meager savings. He worked hard, eventually becoming an economics professor at MIT, then moving to Goldman Sachs to establish and lead the fixed-income derivatives research department, and finally joining LTCM—a firm with Nobel laureates that represented the perfect blend of academic theory and market practice.

Huang's mother, Marina Chen, carved her own path in academia after immigrating from Taiwan. At Caltech, she pioneered parallel computing research under the legendary technologist Carver Mead, developing technologies still used in modern processors today. Although Chen was one of the first female computer science professors at Yale and seemed destined for outstanding academic achievements, she chose to leave academia to focus on raising and educating her three sons.

Huang's family dinners resembled an investment committee. Every evening, when the children heard the garage door open, they hurried to complete the reading assignments their father had set—carefully selected articles appropriate for their ages, ranging from economic principles to Scientific American. At dinner, they had to answer questions about the assigned topics. Each child developed different coping mechanisms in response to their parents' strong demands. According to the eldest, Matt Huang, his instinct was to rebel.

In 1998, LTCM's model failed during the Russian financial crisis, abruptly ending their Tokyo branch. This crisis drained the Huang family's savings. However, Chi-fu Huang emerged from the wreckage and co-founded Platinum Grove Asset Management in 1999 with his LTCM colleague and Nobel laureate Myron Scholes. In less than nine years, the company's assets grew from $45 million to $6 billion, becoming one of the largest fixed-income hedge funds in the world before the 2008 financial crisis. This pattern of seeking opportunities amid chaos and creating new things during systemic collapse was not unfamiliar to his son.

Scarsdale, a suburb of New York, became Huang's fourth home after Tokyo in 11 years. As one of only three Asian students in a predominantly Jewish school, these constant relocations and cultural adaptations honed his ability to understand social dynamics and interact with people of different personalities.

In class, Huang could not sit still. He was restless, repeatedly disrupting the order of other students, which led to his expulsion from Chinese weekend school. “Uncontrollable,” his parents later described him at his wedding. However, when he lived according to his own will, he demonstrated the ability to focus. Huang stood out in his “not cool, but academically inclined” friend group; he made films, debated liberal philosophy, and excelled at gaming. His attitude towards StarCraft—competing semi-professionally on international servers—foreshadowed his attention to detail, which would become his hallmark, extending even to his current obsession with handstands.

Zhang Yiming spoke through a translator, but Huang was already captivated by the founder's non-verbal expressions—his gestures, facial expressions, and intense emotions painted a picture that could be understood without words.

Everything changed when he discovered mathematics. The math club gave him a natural affinity for the subject; although he was not a top competitor in national contests, it showed his parents that their uncontrollable son could excel in school if appropriately challenged. Poker and chess also became another outlet for his analytical thinking.

This transformed student earned his way into MIT through hard work. In 2006, he found himself in “one of the places with the most weirdos on Earth,” studying mathematics. He took a semester off to play online poker, simultaneously running eight tables. But the decisive moment (aside from 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 groomed for a PhD, giving up a bachelor's degree seemed unimaginable. However, Ni did not fail—he was one of the most capable people Huang knew, making a careful choice to create something new. This prompted Huang to read all of Paul Graham's essays, through which he discovered the allure of Silicon Valley and the ultimate rebellion: forging his own path.

In his final year at MIT, Huang and his roommate applied to Y Combinator, initially facing rejection. Graham told them, “We really like you. But your idea is terrible.” Six months later, they successfully joined YC with a viable prototype. The MIT graduates drove across the country to San Francisco in six days. At YC, they created a project Huang now refers to as a “bad idea”—a TV guide website for the streaming era called Hotspots. This “failed startup” lasted two years, and the experience gave him a deep resonance with founders. Later, Hotspots was acquired by Twitter, which was in its pre-IPO phase, and he observed that it was a “badly managed” company.

In 2012, Huang was ready to carve a new path. In his view, Silicon Valley had become too mundane; the consumer space was easily predictable, and it was hard to find interesting work and compelling returns. During a week off from Twitter, he traveled to Beijing with the idea of starting a tech company in China, meeting with six founders. One of them was Zhang Yiming, who was developing a consumer app that seemed destined to fail. Zhang spoke through a translator with Huang, but Huang found himself captivated by the founder's non-verbal expressions—his gestures, facial expressions, and focus painted a picture that could be understood without words. As Huang left the apartment, he thought, “I have to find a way to support this person.”

He invested in ByteDance at a valuation of $20 million and $30 million, marking his largest personal investment at the time. Today, ByteDance is valued at $300 billion, and his investment has grown about 10,000 times. He still holds most of his shares, and although he is “increasingly indifferent” about it, he admits, “It will definitely mess with your mind because it might be the best investment I've ever made.” That same year, in San Francisco, he made seed investments in YC startups Instacart, Benchling, PlanGrid, and Amplitude—all of which have since become billion-dollar companies.

In 2014, while working at Twitter, a recruitment email from Sequoia Capital appeared in his inbox. He initially thought it was spam. Despite his impressive track record, he had no intention of becoming an investor. However, curiosity won out, and his interview assignment—a one-page document on which companies Sequoia should invest—prompted him to write an article about Coinbase, which at the time had only seven employees.

At Sequoia Capital, Huang discovered a place that had “the highest standards” he had ever experienced. On his second day, Facebook acquired WhatsApp for $19 billion, and the partners briefly gathered in the hallway. Champagne was poured, but no one toasted to celebrate. Within five minutes, everyone returned to their work. A $10 billion exit deal seemed insignificant compared to the legendary portfolio of trillion-dollar companies like Apple, Google, and Nvidia. This culture further inflated his already considerable ambitions.

“You can see how far the coordinate axes can extend and what a great founder looks like here,” Huang said of his four years at Sequoia Capital. “Without exposure to these, your overall perception of possibilities wouldn’t be at such a high level.” Sequoia also showed him that excellence comes in many forms. Working alongside investors with different styles but consistent key principles gave him the confidence to develop his own approach: “Realizing I could do things my way made me feel very free.”

Sequoia, in turn, received some valuable returns. “In past poker tournaments, Sequoia America was beaten badly by Sequoia China, but after Matt Huang joined Sequoia America, he won us the game. Thanks to him, we brought back that outrageous jacket from Don Valentine,” Leone recalled. You probably wouldn’t hear this story from Huang; he never boasts about his achievements. Many things about him can only be learned from others or by knowing what to ask.

Leaving Home

Matt Huang first encountered Bitcoin at MIT in 2010, and he was immediately drawn to the idea of Bitcoin perfectly merging mathematics, economics, computer science, and game theory.

“I deep down thought it was just a really beautiful idea,” Huang recalled. But in the early days, his exploration of Bitcoin was more out of curiosity than investment. It wasn't until 2012 that he bought some Bitcoin on the then-mainstream exchange Mt. Gox and experienced his first major bubble. “It was almost like losing money for the first time,” he reflected. “Then you kind of give up, writing it off as something that’s dead. And when you see it come back and realize it’s not dead, you start to get curious.”

According to multiple sources, legendary investor Michael Moritz referred to Matt Huang as “the only regrettable loss in Sequoia's history.” Leone said, “He was the first person in my career to voluntarily leave Sequoia.”

At Sequoia Capital, Huang found that few colleagues resonated with his increasingly firm belief in the importance of crypto. The firm supported his interests—he led several cryptocurrency investments on behalf of Sequoia—but he increasingly sought dialogue partners outside the company. He began attending monthly dinners in San Francisco with six to eight other investors interested in cryptocurrency to discuss ideas at the forefront of emerging technologies.

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 cryptocurrency was the metaverse. Still at Sequoia, Huang proactively reached out to discuss this idea. “I knew I wouldn’t start a company around this idea,” Ehrsam thought, “but it would be fun to pitch this idea to Sequoia.”

What began as a quest for knowledge evolved into an in-depth discussion between the two, spanning 40 emails, delving into the possibilities of cryptocurrency. Their backgrounds complemented each other perfectly: Ehrsam co-founded and operated the most important company in the cryptocurrency space, while Huang brought top-tier investment experience.

“Before meeting Matt, nothing felt completely right,” Ehrsam said, having previously discussed forming a fund focused on cryptocurrency with several potential partners. Over six months, they methodically explored the possibility of collaboration, from investment ideas to fund structures, testing their compatibility in various aspects. They particularly focused on ensuring a genuine partnership—everything would be split 50/50, a principle that “drove some people crazy,” but was crucial for both of them.

Leaving Sequoia was painful for Huang. It was the first place where he truly felt a sense of belonging: “It felt like a place where I could retire if they were willing to keep me.” Multiple sources revealed that legendary investor Michael Moritz referred to Huang as “the only regrettable loss in Sequoia's history.” Leone said, “He was the first person in my career to voluntarily leave Sequoia.” But Huang was already convinced that cryptocurrency would become one of the most important technological trends of the coming decades. “When he told me he thought it was a once-in-a-lifetime opportunity, I easily let go. Follow your dreams and pursue it,” Leone said with a hint of regret. “I’m mad at myself because he had been talking about Bitcoin, and I usually have a good nose for these things. If I were really smart, I would have created an opportunity for him to set up a fund within Sequoia.”

Disrupting the Status Quo: Huang and Ehrsam

Huang and Ehrsam founded Paradigm in June 2018, based on two core pillars: first, cryptocurrency would become one of the most significant technological and economic transformations of the coming decades; second, the field lacked the type of investors they hoped for as entrepreneurs—investors who deeply understood the “crypto-native” qualities.

Graham Duncan, founder of East Rock Capital and an advisor to Paradigm—whom Huang referred to as the most helpful person in the company's early days—was struck by their conviction from the very beginning. “They were always planning for what could happen from a scale perspective,” Duncan said. “It shocked me, but it was by no means arrogance. Their time horizon was completely different, and what they planned ultimately came to fruition.”

They raised their first fund at the end of 2018, securing $400 million from top institutions like Harvard, Stanford, and Yale, as well as Sequoia Capital—these universities made significant investments in cryptocurrency for the first time. The fund had an innovative structure: open-ended, with no fixed capital return timeline, allowing them to hold both public crypto assets and private investments. Then they made bolder moves: unlike most venture capital firms that gradually call down funds, they quickly requested the full $400 million and began averaging into Bitcoin and Ethereum, with these positions initially accounting for about 90% of the fund. The average purchase price for Bitcoin was between $4,000 and $5,000 per coin—a massive bet, wagering that the crypto winter, which saw Bitcoin drop over 70% in 2018, would eventually thaw.

Their first three employees embodied different aspects of their vision. Charlie Noyes, whom Huang met in a Telegram group chat discussing the Bitcoin Cash fork, became their first employee. “From the messages he sent, I thought he was a 40-year-old bearded man, very cynical and weathered. When he showed up for dinner, I was really surprised he was only 19,” Huang recalled.

Noyes discovered Bitcoin through the gaming community at the age of 12 and had been immersed in cryptocurrency ever since. He had published papers on crypto applications, won the Intel Science Competition twice, then dropped out to attend MIT, and subsequently dropped out again to join Paradigm. Initially, he struggled to adapt to office life, feeling that it was normal to comment on investment proposals via email and come to the office once a week. On his first day of work, when he was late, Huang sat down to explain career expectations to him. This patience paid off.

Now, at 25, Noyes is one of the general partners at Paradigm. Huang likens him to an artist, capable of making intuitive leaps by compressing vast amounts of disparate information into clear investment theses. For instance, he identified MEV (Miner Extractable Value) as a key issue in blockchain in 2020 and became the lead investor in Flashbots, whose infrastructure now touches nearly every transaction on Ethereum and has established critical market rules for this $450 billion ecosystem.

Dan Robinson, Huang's high school friend and one of the smartest people he knew growing up, has a solid background in crypto technology. After feeling disillusioned at Harvard Law School, Robinson turned to programming and explored cryptocurrency while working at the blockchain company Stellar. Huang and Ehrsam tailored a unique role for him that encompassed investing, research, and helping portfolio companies build. This compromise later became the template for Paradigm's research-driven approach, with Robinson subsequently inventing key mechanisms for Uniswap, a leading decentralized exchange in cryptocurrency.

She is the third partner of Matt and Fred, involved in building the company from start to finish.

–Graham Duncan, East Rock Capital

Huang, Ehrsam, and Palmedo outside the top floor of the San Francisco office

Alana Palmedo joined Paradigm about four weeks after its founding, when the company was still renting office space on a weekly basis. She brought the institutional rigor needed to connect cryptocurrency with traditional finance. Although she was not “deeply knowledgeable about cryptocurrency,” her experience managing the complex operations of the Boston University Foundation and Bill Gates' investment office during the 2008 financial crisis proved invaluable. Initially skeptical, she was ultimately convinced by Huang and Ehrsam's thoughtful approach to building an institutional-grade company, as well as her intuition as a value investor—that Bitcoin had dropped so low, “this must be the bottom.”

“She is the third partner of Matt and Fred, involved in building the company from start to finish,” Duncan, who helped interview Palmedo, said. She was initially responsible for everything from trade settlement to finance to compliance, later hiring experts for each function, allowing the investment team to focus on trading. Now, as managing partner, she has built a high-performance culture at Paradigm, requiring everyone, regardless of role, to maintain extreme transparency and daily self-reflection. “Everyone must be in the top 1% in their field,” Palmedo insists.

By mid-2019, cryptocurrency prices began to rebound, but most investors remained cautious about the industry, and Paradigm re-entered the market. Its initial group of investors added $360 million in investments. This timing reflected Huang's style: raising funds when others were skeptical, from partners who shared his firm belief that cryptocurrency would fundamentally reshape finance.

Although cryptocurrency has yet to fully realize its transformative promise, Paradigm's investments have yielded solid returns. According to public documents, its first flagship fund is projected to grow from $760 million to $8.3 billion by the end of 2024. Sources close to the company revealed that Paradigm has also returned all initial capital to its limited partners, having paid out over $1 billion from the fund to date.

Long-Term Vision

Despite Paradigm's early success, one can't help but wonder why Huang is interested in the wild world of cryptocurrency. For Huang, money is no longer an issue, and he seemed to have a perfect job at Sequoia Capital.

Coinbase CEO and co-founder Brian Armstrong has pondered a similar question—“Who would leave a job like Sequoia?”—and then answered, “He is a silent killer. Our industry needs more upright people like him, who have been in this industry for a long time and have good reasons. He has that conviction to take a different path.”

For Huang, the answer is simple: “I think I've always had a certain skepticism towards authority, so when I see authority at work, I do question: Is this the way we want the world to operate?”

“Americans say that China looks like a dystopian country,” Huang said, “I think they are not fully aware that the same thing is happening in the West.”

Take the Obama administration's “Operation Choke Point” as an example, where the U.S. Department of Justice attempted to limit certain industries' access to banking services. “Operation Choke Point” 1.0 occurred from 2013 to 2017, targeting industries deemed “high-risk,” such as payday lenders and gun dealers. During the Biden administration, “Operation Choke Point” 2.0 focused on “de-banking” cryptocurrency. Even individuals like Uniswap founder Hayden Adams and Gemini co-founder Tyler Winklevoss found their personal bank accounts suddenly closed without reason.

Huang believes the development of cryptocurrency can be divided into three key stages: first, currency; second, the financial system; and finally, internet platforms. Each stage builds on the previous one and facilitates the formation of the next. “Currency is upstream of cryptocurrency,” he explained. “Buying the first Bitcoin or setting up the first wallet is often the first step in using other crypto applications. It’s like getting your first AOL account and connecting to the internet.”

The currency stage has already produced astonishing results. Bitcoin has evolved from the white paper in 2008 to an asset now valued at nearly $2 trillion, becoming the most valuable startup since its release. Notably, nation-states—even the United States—have begun to adopt it.

Institutions that mocked the industry in 2018 (like BlackRock CEO Larry Fink, who called Bitcoin a “money laundering index”) are now embracing the technology. In 2024, BlackRock's Bitcoin ETF raised $50 billion in just 11 months, making it the fastest-growing ETF in history. Traditional portfolio models are also changing, with Fidelity now recommending a 1-3% exposure to cryptocurrency. As institutions carve out dedicated allocations for crypto assets, the classic 60/40 portfolio is transforming into “59/39/2.”

The second stage—building an entirely new financial system—is accelerating. Traditional finance operates through layers of intermediaries, while cryptocurrency enables near-instant transactions, 24/7 markets, and novel financial instruments, all built on permissionless rails. The rise of stablecoins (blockchain-based digital currencies pegged to stable assets like the dollar) demonstrates this potential, with their circulation growing from $500 million to over $20 billion since Paradigm's founding.

The third stage—internet platforms—is still in its infancy and the least clear. Unlike today’s internet, where platforms control user data and online assets, cryptocurrency enables true digital ownership and direct user-to-user interactions without intermediaries. High transaction costs have hindered the development of everyday applications like social media and gaming, but Huang believes this is changing as new scaling technologies significantly reduce costs. The infrastructure supporting NFTs and meme coins will ultimately support more serious applications, just as YouTube evolved from cat videos to become one of the most important platforms in the world.

Of course, like any new technology, cryptocurrency has its dark side. Scams and hacks are commonplace, memecoins promote short-term thinking rather than building what is truly needed, token prices are highly volatile, projects frequently collapse, and the entire industry often looks more like a casino than the future of finance.

However, Huang takes a long-term view. Just as the early internet attracted both outstanding researchers and scammers, the open frontier of cryptocurrency fosters innovation while breeding misconduct. Each wave of new trends, including seemingly irrational speculative bubbles from the outside, brings in new talent and capital to build critical infrastructure.

Stablecoins are a perfect example. The ICO bubble of 2017 brought mainstream attention to cryptocurrency and spawned a new generation of crypto-rich 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 has dropped from $12 in 2021 to just $1 today. On Coinbase's popular Layer 2 network, Base, the cost of the same transaction is less than a penny. In turn, circulation has grown exponentially, increasing 400 times since the bubble burst, with real-world use cases emerging.

SpaceX uses stablecoins to repatriate revenue from emerging markets, converting local currency into digital dollars for instant transfers. Scale AI pays its global network of data annotators through stablecoin rails, eliminating cross-border friction and costs. Companies like Ramp have discovered another advantage: while savings account interest is only a few percent, stablecoins backed by government bonds can capture most of the profits that banks typically keep for themselves.

Data confirms this trend. Transaction volume has grown at an annual rate of 120% for five consecutive years. In 2024, stablecoins processed $5.6 trillion in payment transactions, nearly half of Visa's $13.2 trillion. This momentum prompted Stripe to acquire the stablecoin payment platform Bridge in October 2024. Stripe co-founder Patrick Collison wrote, “Stablecoins are the room-temperature superconductors of financial services. Thanks to stablecoins, global businesses will benefit from significant improvements in speed, reach, and cost in the coming years.”

Matt is different. He is calm, rigorous, and patient—qualities uniquely suited to handling any complex technology, especially one like cryptocurrency that has delayed consequences.”

– Patrick Collison, Stripe

This adoption reflects the broader evolution of cryptocurrency: Bitcoin was launched in 2009 and reached its first million users in 2011. Ethereum followed in 2015 and hit the same milestone in 2017. Then came stablecoins in 2019, decentralized finance (DeFi) in 2021, NFTs in 2022, and social applications in 2023.

Critics often emphasize the lack of impact cryptocurrency has on everyday business. Huang believes stablecoins are the next killer application, but he also distinguishes between “single-player” technologies like AI and “multiplayer” technologies like cryptocurrency, the former providing immediate utility while the latter requires coordinated adoption. “It’s like adopting a new language or settling in a new city,” he explains. “If you do it alone, it’s useless.” He points to email as a guiding analogy. Early critics called it “technically fascinating but economically immature,” much like today’s skepticism towards cryptocurrency.

When talking to Huang, his calm demeanor regarding the entire cryptocurrency landscape is striking. Patrick Collison brought Huang onto the Stripe board, both for his cryptocurrency expertise and his broader business insights, saying, “Matt’s temperament is different. He is calm, rigorous, and patient—qualities uniquely suited to handling any complex, delayed-consequence technology like cryptocurrency.”

What sets him apart is his ability to hold both sides of an investment thesis simultaneously. Collison says, “He can handle bear case scenarios, which are often much more concrete than bull case scenarios. Then he understands the potential of technology and sees how small nascent things can become very important in the future.”

Recently, artificial intelligence has become the new frontier in technology, with its clear and immediate applications capturing the imagination of the world. Huang and his team at Paradigm even considered expanding their focus to include AI. But they remained committed to cryptocurrency, with Huang explaining, “AI will do well whether we’re involved or not. Cryptocurrency is a very important technology that needs to coexist with AI, but there aren’t many strong defenders of it. We want to ensure the success of cryptocurrency.”

Invention

This commitment to ensuring the success of cryptocurrency has led Paradigm to develop an unusual investment approach. While most venture capital firms wait to support winners, Paradigm helps create the conditions for winning. This means not just analyzing trends or writing checks—but solving the foundational technical problems that can scale the entire industry.

The company’s research-driven style formed almost by accident. When Huang hired his high school friend and best man Dan Robinson, it was unclear how a lawyer-turned-self-taught programmer would fit into an investment firm. “We wanted Dan to join the team because he is the smartest person I know,” Huang said, “but he wasn’t the most business-savvy, and we weren’t sure how he would fit into the investment process.” Primarily to bring him on board, they created a novel role that included allowing Robinson time to work on open-source projects, which they collectively referred to as “exploratory research.”

“It turns out that this specific type of work is extremely important in cryptocurrency,” Robinson explains. “Most investment research is about gathering and analyzing existing information. We try to invent new things.” Breakthroughs from the research team often come from exploring theoretical questions before the company even realizes it needs answers, such as bullseye liquidity.

What makes cryptocurrency unique is the enormous leverage effect created by mathematical mechanisms. Traditional exchanges may 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 groundwork for a trillion-dollar market to operate autonomously on the blockchain. The challenge is that while this elegant solution is computationally efficient, it wastes a lot of capital by spreading liquidity across all possible prices.

Robinson met Hayden Adams through the early Ethereum research community, who developed Vitalik’s concept into Uniswap. Within weeks of joining Paradigm, he wrote a memo about Uniswap that led to seed investment and began actively improving it. His contributions facilitated Uniswap v2, allowing any Ethereum-based token to trade, helping the protocol’s trading volume expand from $2 billion to over $1 trillion.

However, Robinson and Adams spent most of 2019 searching for more fundamental breakthroughs. Through mathematical exploration, the team discovered a way to effectively concentrate liquidity within specific price ranges—allowing traders to focus capital where it is actually needed. This innovation became Uniswap v3, increasing capital efficiency by up to 4,000 times. A $5 million position can now provide the same trading depth as $2 billion spread across all possible prices. By October 2022, Uniswap was valued at $1.7 billion.

“When they compete with other companies, Paradigm can actually help you build a cryptocurrency company. They have experts in protocol design, security, legal, and even policy.”

– Brian Armstrong, Coinbase

This research-driven model of facilitating breakthrough products repeatedly appears in Paradigm’s portfolio. Last year, when Blur proposed adding margin trading to the company, the team faced a fundamental challenge: how to safely lend against illiquid, hard-to-value NFTs? The research team spent four months developing a brand-new lending protocol called Blend. Robinson noted, “If you can solve the lending problem for NFTs, you can likely solve it for any illiquid asset.” Within months of its launch, Blend created and dominated a new lending category.

Unlike traditional venture capital firms that separate technical resources from investment decisions, Paradigm’s researchers are at the core of every investment. They attend every pitch meeting and help make every decision. This integration means they often discover opportunities that others miss because they are already dealing with similar technical challenges. When algorithmic stablecoins like Terra became popular, Paradigm chose to steer clear—years of trying to design better stablecoin mechanisms made the company realize these projects did not address the fundamental issues.

This deep technical work creates a powerful competitive advantage in sourcing and closing deals as well as recruiting talent. “When they compete with other companies,” Coinbase’s Armstrong explains, “Paradigm can actually help you build a cryptocurrency 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. This requires keeping pace with the rapidly evolving frontier of cryptocurrency. “The generations of the internet are very short,” Huang points out, comparing it to the network of street urchins that Sherlock Holmes relied on for important intelligence on the streets of London. “Even a two-year time difference can affect your understanding of cryptocurrency culture.”

This insight led to the Paradigm Fellowship, a program designed to discover outstanding young developers still in school. The program partly stems from the company’s experience with transmissions11, a team member they discovered on Discord who was still in high school. At one point, transmissions11 dialed into a pitch meeting from a school assembly, which made him realize the opportunity to collaborate with the next generation of innovators in cryptocurrency.

Konstantopoulos, Noyes, and Robinson

Crypto Crypto Crypto

On the last Thursday of May 2023, reporters from the crypto news company The Block discovered something that sparked widespread controversy in the industry. Through the Internet Archive's Wayback Machine, they noticed that Paradigm had quietly removed all mentions of "crypto" from its homepage and social media, repositioning itself as a "research-driven technology investment firm." This seemingly obvious discovery—despite the change having been in place for a month—immediately triggered a strong backlash. For the crypto industry, which places an unusual emphasis on loyalty, this felt like a betrayal.

“We don’t want to work for you anymore,” wrote one portfolio company on Twitter, referring to the rebranding and Paradigm's investment in FTX, “this has become a scar for our entire industry.” Such criticism stung, but it reflected the brutal honesty of the cryptocurrency world. Paradigm not only restored the term "crypto" but doubled down, adding a flashing neon ticker on its homepage that read: “crypto crypto crypto.”

The reality behind this change was more mundane. Two researchers on the team complained that potential AI collaborators stopped responding to their emails after seeing "crypto" on Paradigm's homepage. “We thought, well, everyone in the crypto circle already knows us; they never go to our homepage. They look at our blog, and every portfolio company and blog post is related to crypto. So what’s the big deal?” Huang explained. “In hindsight, it was clearly a mistake. People view the website as a collective statement you take pride in.” (Patrick Collison had previously pointed out that Paradigm's website “might be the fastest you’ve used this year.”)

However, this incident exposed deeper tensions. By November 2022, Bitcoin had fallen 75% from its 2021 peak, dropping below $16,000. Ethereum was down 80%. In the same month, ChatGPT was launched, sparking an AI frenzy that made cryptocurrency seem like yesterday's frontier. Major venture capital firms had begun shifting their attention and capital toward AI.

For Paradigm, the website controversy marked the pinnacle of a humbling period. Just 18 months prior, the company seemed unbeatable. Its Bitcoin position had grown 15-fold. One of its earliest investments, Coinbase, went public with an $85 billion valuation. It raised a $2.5 billion venture fund. However, the frenzy of 2021 even tested the most disciplined investors in the cryptocurrency space.

Fred Ehrsam saw the warning signs. In March 2021, he sent a letter to portfolio companies titled “Navigating the Crypto Cycle.” He pointed out that prices had doubled in just two months, Bitcoin's market cap exceeded $1 trillion, and “pixelated crypto art was selling for millions of dollars,” warning, “Senators even have laser eyes! The frenzy is everywhere.” Drawing from his experience at Coinbase—where one-third of employees left during the 2014-2017 downturn—he offered specific preparatory advice: stress-test systems for 10-100 times peak usage, consider fundraising while capital is abundant, and remind new employees of the brutal cycles in cryptocurrency.

“Down years are easier to navigate than up years. The signal-to-noise ratio is high; okay, prices are down, but in the long run, that doesn’t bother us.”

– Matt Huang, Paradigm

His warnings proved prescient but were still insufficient to address everything. “We made a lot of mistakes during that period,” Huang reflected. “When you focus too much on competitors, you become more like them.” He explained that watching competitor a16z raise massive funds made them question whether they needed to match that scale. Paradigm grew from 18 to 62 people. “We did let our quality standards slip,” he admitted. “I remember times when we made compromises, feeling that if we didn’t do this or hire that person, we would fall behind. In hindsight, those were all wrong decisions.”

Huang is not someone who is keen on spreadsheets; he doesn’t remember the maximum drawdown from peak to trough, but one moment is deeply 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 cryptocurrency, with founder Sam Bankman-Fried speaking at conferences, testifying before Congress, and gracing magazine covers. That October, he delivered a keynote address at Paradigm’s limited partner meeting. A few weeks later, FTX collapsed amid fraud allegations and revelations of misappropriated customer funds.

This investment was a complete failure, but the sense of betrayal ran deeper. During the due diligence process, Paradigm had identified key risks: the relationship between FTX and Bankman-Fried’s trading firm, Alameda Research. The team asked direct questions but received false assurances. Later, Huang testified at Bankman-Fried’s criminal trial, an experience that reinforced the important lesson about founder alignment.

“Even at the time, it was clear he didn’t share our vision of improving cryptocurrency,” Huang said. “For him, it was a way to make a lot of money and then donate it.” This divergence became evident in policy discussions, where the compromises advocated by Bankman-Fried were seen by Paradigm as detrimental to the core commitments of cryptocurrency.

FTX was not Paradigm’s only misstep. The company co-led a $300 million Series C funding round for OpenSea at the peak of the NFT craze, which was valued at $13.3 billion. Since then, the NFT marketplace’s trading volume has plummeted by 98%. Another portfolio company, BlockFi, went bankrupt due to exposure to FTX.

“In venture capital, there will always be some investments that don’t go as you wish,” Huang said. “It’s always an opportunity for reflection, and we’ve done a lot of reflecting.” He insists that bear markets actually provide clearer signals than bull markets. “Down years are easier to navigate than up years. The signal-to-noise ratio is high; okay, prices are down, but in the long run, that doesn’t bother us.”

As the company emerged from this period, it was smaller but more focused. The investment and research team, which had grown to 20 people in 2021, was cut down to 11. Standards tightened, and a clear filtering criterion was added for new investments: founders must align with Paradigm’s mission to advance the frontier of cryptocurrency.

The website incident provided insight in another way. The swift negative reaction indicated that the crypto community viewed Paradigm as more than just an investment firm. It was a benchmark for the industry.

Writing the Future

Behind Georgios Konstantopoulos's desk sits a mini electric guitar, which he occasionally pulls out during impromptu meetings. The image of the company’s chief technology officer strumming guitar riffs while discussing blockchain architecture captures the essence of his approach: a blend of technical excellence and an intuition for practicality.

In 2019, Konstantopoulos was a sought-after researcher and software engineer, renowned in the crypto circle for his development skills. His technical work was so thorough that Paradigm’s portfolio companies frequently mentioned his name.

When Huang first met him at a meeting, Konstantopoulos was weighing whether to expand his consulting business or join a startup. But Huang, with his consistent ability to spot unconventional talent, saw a different path. He proposed creating a role similar to Robinson’s, allowing Konstantopoulos to combine technical research with investment evaluation.

This role evolved in unexpected ways. In 2020, while helping the portfolio company Optimism implement its research, he noticed that many projects were struggling with the same foundational issues. The challenge was not in the ideas but in the tools needed to build them. Konstantopoulos thought, rather than supporting companies one by one, could he build open-source infrastructure to push the entire industry forward?

The things people tell you are hard are often not hard. They only seem hard because you can’t control your tools.

– Georgios Konstantopoulos, Paradigm

This philosophy led to his first major contribution, Foundry. Konstantopoulos spent a weekend building a tool that significantly simplified the process of writing secure smart contracts. It can be imagined as a spell checker for blockchain code—except it doesn’t catch spelling errors; it prevents millions of dollars in vulnerabilities. Within months, it became the industry standard, now boasting a 90% market penetration, securing over $100 billion in smart contracts (to date).

However, the success of Foundry highlighted a deeper challenge. Ethereum, the platform driving most of the innovation in cryptocurrency, was running on inefficient software, making scaling nearly impossible—like trying to stream 4K video over a dial-up connection. Konstantopoulos proposed a bold solution: to rebuild Ethereum’s core node software from scratch.

“You’re crazy,” his team said. “That will take five years.” But Konstantopoulos earned their trust; he understood their capabilities better than anyone through his unique hiring approach. He didn’t use traditional interviews but found engineers through their 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 seemed simple—downloading transactions, executing them locally, and writing to a database—its impact was profound. By optimizing this fundamental process, Reth reduced its size by 80% and was ten times faster than alternatives. Major platforms like Coinbase’s Base, WorldCoin, and Optimism (valued at $1.65 billion in 2022) have relied on its exceptional performance (it launched in June 2024).

These technical contributions created a virtuous cycle. Paradigm’s researchers identified problems while evaluating investments. The open-source solutions they built became industry standards. These tools attracted the best developers, who either joined portfolio companies, became founders themselves, or, in some cases, joined Paradigm.

This strategy peaked last October when Ithaca spun out from Paradigm, securing $20 million in investment. As CEO (while retaining his role as Paradigm's Chief Technology Officer), Konstantopoulos aims to commercialize what his team has built. “What other teams need 20-30 engineers, seed funding, and two years to accomplish,” he pointed out, “we can do in a few weeks.”

His confidence stems 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 often not hard,” he argues. “They only seem hard because you can’t control your tools.” This radical self-sufficiency philosophy—building any tools the industry needs—has transformed Paradigm's role in cryptocurrency.

As for his own transformation, Konstantopoulos describes it in typical Greek fashion: “Matt is the only mentor I can’t surpass.” Most mentors eventually get surpassed, but with Huang, Konstantopoulos found a leader who grows alongside the team. While engineers of his caliber often leave to start their own ventures, he and others stayed at Paradigm because Huang grew with them. “They push me to be a better version of myself every day,” Huang says, “I don’t want to be surpassed.”

On the back of Huang's MacBook, one detail stands out: three stickers form a perfectly aligned row, with the logos of Foundry and Reth flanking Paradigm's mark. This reflects his attention to detail and hints at his vision for the ever-evolving world of venture capital. “What if Redpoint Capital not only supported Google but also founded it?” he increasingly finds himself pondering. This question points to a future where the lines between investors and builders become blurred.

Konstantopoulos's journey from gaming enthusiast to architect of core cryptocurrency infrastructure realizes Huang and Ehrsam's initial argument: cryptocurrency needs a different kind of investor. Not just exceptional outliers who can assess technology, but builders who can shape the financial future through code. In an industry inherently hostile to central authority, Paradigm has become one of the most trusted institutions in cryptocurrency by focusing on creation rather than control. Huang and his team are not just investing in the future—they are writing it line by line.

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