Huang and his team are not just investing in the future; they are writing the future line by line.

Written by: Dom Cooke, Colossus Review author

Translated by: Rhythm Little Deep

Editor’s Note: This article provides a detailed account of the cryptocurrency investment firm Paradigm, founded by Matt Huang and Fred Ehrsam, from its origins and development to its unique positioning in the cryptocurrency space. It emphasizes their story of not only investing in the future through research-driven and technological innovation but also actively building the core infrastructure of the crypto ecosystem, attracting top talent, and driving industry progress.

The following is the original content (edited for readability):

"Sometimes I feel like I'm managing the X-Men Academy," Matt Huang describes his $12 billion cryptocurrency investment firm Paradigm, which he believes is a place that gathers extraordinary talents with remarkable abilities.

Take the company’s first employee, Charlie Noyes, for example. This 19-year-old MIT dropout didn’t even know how to use a calendar; he was five hours late to his first 10 a.m. meeting and showed no remorse. He has since become a general partner at the firm. Then there’s Paradigm’s Chief Technology Officer, Georgios Konstantopoulos, who transformed from a World of Warcraft addict into one of the most prolific engineers in the crypto space. There’s also a developer known only by the X account "transmissions11," whose talent Paradigm discovered through a Discord server while he was still in high school.

"They sometimes create maddening chaos that makes you want to pull your hair out," Huang says, "but when you see their capabilities, you’re amazed, thinking, wow, no one else in the world can do this."

On the cold morning I visited Paradigm, located in San Francisco, two of Huang’s team members were working on a mechanism that could reshape the flow of hundreds of billions of dollars in digital currencies within the financial system. In a top-floor conference room, the room’s curved design resembled a cathedral’s echo chamber, as partner Dan Robinson, wearing Paradigm green Nike Air Force 1 shoes, lightly tapped the floor while explaining their latest breakthrough at high-frequency trading speed. Research partner Dave White, sporting hexagonal glasses and a scruffy beard, leaned over his laptop, occasionally pausing to discuss the equations behind his invention. Huang listened intently, dressed in a simple black Japanese sweater, his robust physique exuding a quiet authority that always seems ahead of the curve.

"Everything he touches is exceptional," said Doug Leone, who was Huang’s boss at Sequoia Capital from 2014 to 2018. "He is incredibly smart and extremely humble. It’s hard not to feel he’s a special person after meeting Matt."

Through two massive arched windows above San Francisco’s Union Square, the concrete towers of traditional finance loom in the east, while the cluster of startups in SoMa stretches southward. This is an excellent vantage point for a company that connects traditional finance with cutting-edge technology—just as it is 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 building a personalized news app—Huang initially thought the idea was doomed to fail. But sitting at an old IKEA table near a dusty refrigerator, 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 balanced, not letting himself fall apart. He had a strong clarity about what he wanted to build and a world-conquering ambition." Zhang was the most impressive person he had ever been around—so impressive that Huang had to invest. That company later became ByteDance, the creator of TikTok, and Huang’s stake has since turned into a nine- or ten-figure fortune—he doesn’t do spreadsheets, so he can’t provide an exact number.

This instinct for discovering talent is at the core of Paradigm. In 2018, Coinbase co-founder Fred Ehrsam approached Huang at Sequoia Capital with a vision for a different type of investment firm. They started as equal partners, but Ehrsam later stepped back to split his time between cryptocurrency and his new brain-computer interface startup, believing Huang "was born to run Paradigm."

As the son of one of the world’s leading financial theorists and a pioneering computer science professor, Huang grew up at the intersection of mathematics, economics, and technology. Over six years, his firm grew from managing $400 million to over $12 billion, focusing on early investments in foundational crypto projects while building significant parts of the crypto core infrastructure. Paradigm’s researchers—who are also investors—develop foundational innovations and then open-source them for the entire industry to use. This is an unusual practice 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 shell of West Coast Wall Street.

He is incredibly smart and extremely humble. It’s hard not to feel he’s a special person after meeting Matt. — Doug Leone, Sequoia Capital

Back in the top-floor conference room, Robinson and White were exploring "bullseye liquidity," a breakthrough that could change the way stablecoins—digital tokens pegged to the dollar—are traded. Stablecoins have become a key part of the crypto financial pipeline, but their trading infrastructure remains primitive, requiring independent capital pools for each trading pair. Their innovation integrates these fragmented markets into an efficient system. While this could provide significant advantages for Paradigm’s portfolio companies (like Uniswap and Noble), they still plan to publish their research findings on a blog. "If someone else implements this idea and makes crypto better overall, we’re totally fine with that," Robinson said.

White paused his work with OpenAI on validating mathematical proofs to refine a point 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 prefers to listen—but when he spoke, it was clear he had fully absorbed the complex content they were presenting.

Years ago, when they were kids, Robinson recalled that their friend group would argue endlessly until Matt spoke up. "He doesn’t say much," Robinson said, "but we always end up doing what he says." Those who know Huang best describe him as someone with extraordinary abilities hidden beneath a quiet exterior. "Every minute of insight when communicating with Matt is high, even when he’s silent a lot of the time," observed Patrick Collison, co-founder of Stripe, who brought Huang onto the board in 2021. His meticulous attention extends to everything he touches—from the speed of the Paradigm website to his favorite niche Japanese streetwear to the people he hires. "He has very high standards for excellence," said Coinbase CEO Brian Armstrong, "and he has zero tolerance for mediocrity."

However, beneath this strong personality lies a refreshing 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—Huang is the kind of person whose greatest achievements are whispered rather than proclaimed, and his influence is felt more than it is advertised. Collison added, "Not every great investor or leader is a good person. In all the integrity tests of 'Can this person be the godparent of your child?' he passes with flying colors."

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 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 the crypto space. In an industry that has grown from zero to $3 trillion, experiencing multiple speculations and crashes, the company’s open-source tools now support 90% of smart contract development. Its innovations help hundreds of billions of dollars in digital currencies flow more efficiently. Its investments have earned the trust of the world’s most astute investors—including Harvard, Stanford, Sequoia, and Yale.

Awakening

One of Matt Huang’s earliest memories is walking alone on the streets of Tokyo at the age of nine, navigating the world’s largest city. Every morning, he would traverse narrow alleys and busy streets, commuting to school for an hour. This early independence shaped his worldview. "Once you have a comparison of two experiences," he said, reflecting on the contrast between Tokyo and New York, "it changes your perspective on everything."

In 1997, his father, Chi-fu Huang, was sent to Japan to establish the Asian office of Long-Term Capital Management (LTCM), and the family moved to Japan. Before the move, Chi-fu had managed LTCM’s Asian trading operations in Greenwich, working from 4 p.m. to 3 a.m. to match market hours. As the only son among Taiwan’s four sisters, Chi-fu’s parents sent him alone to the U.S. with their meager savings. He worked hard to become an economics professor at MIT, then joined Goldman Sachs, where he created and led the fixed income derivatives research department, eventually joining LTCM—a team composed of Nobel laureates that perfectly blended academic theory with market practice.

Huang's mother, Marina Chen, carved her own path in academia after immigrating from Taiwan. At Caltech, she pioneered research in parallel computing under the legendary technologist Carver Mead, developing technologies that are still used in modern processors. Although she seemed destined for an outstanding academic career as one of Yale's first female computer science professors, Chen chose to leave academia to focus on raising her three sons, channeling her intellectual passion into their education.

Dinner at the Huang household resembled an investment committee meeting. Each evening, when the garage door opened, the children would rush to complete the reading assignments their father had set—carefully selected, age-appropriate articles covering topics from economic principles to Scientific American. At dinner, they were required to answer questions about their respective subjects. Each brother developed different mechanisms to cope with their parents' intensity. According to the eldest, Matt, his instinct was to rebel.

Their time in Tokyo came to an abrupt end in 1998 when LTCM's models failed during the Russian financial crisis. This collapse wiped out the Huang family's savings. However, Chi-fu Huang rose from the ashes and co-founded 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 largest fixed-income hedge funds in the world before the 2008 financial crisis. This pattern of seeing opportunities in chaos and building new things from systemic collapse became familiar to his sons.

After Tokyo, Scarsdale in suburban New York became the Huang family's fourth home in 11 years. At a school primarily attended by Jewish students, as one of only three Asian students, these constant relocations and cultural adaptations honed his ability to interpret social dynamics and connect with different personalities.

In class, Huang couldn't sit still. His restlessness led to his expulsion from a weekend Chinese school for repeatedly disrupting other students. "Uncontrollable," his parents later described him at their wedding. However, when engaged in his own way, he demonstrated an ability to focus. Alongside his group of "not cool but academically inclined" friends, Huang directed amateur films, debated liberal philosophy, and excelled at gaming. His approach to StarCraft—semi-professional competitive play on international servers—foreshadowed his signature attention to detail, a trait that even extends to his current obsession with handstands.

Zhang Yiming spoke through a translator, but Huang found himself captivated by the founder's non-verbal cues—his gestures, expressions, and intensity painted a picture that could be understood without words.

Everything changed when he discovered mathematics. The math club revealed his natural affinity for the subject; although he wasn't a top competitor in national contests, it proved to his parents that their hard-to-manage son could excel in school when appropriately challenged. Poker and chess became additional outlets for his analytical mind.

This reformed student worked hard to gain admission to MIT, and in 2006, he found himself in "one of the places on Earth with the highest concentration of weirdos." He studied mathematics and took a semester off to play online poker, simultaneously managing eight tables. But the defining moment (aside from meeting his future wife) occurred 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, abandoning a bachelor's degree seemed inconceivable. However, Ni was not a failure—he was one of the most capable people Huang knew, making a thoughtful choice to create something new. This prompted him to read all of Paul Graham's essays, through which Huang 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 getting rejected. Graham told them, "We really like you, but we hate your idea." 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 refers to as a "bad idea"—a TV guide website for the streaming era called Hotspots. This two-year "failed startup" experience still deeply resonated with him regarding founders and contributed to the acquisition of Twitter, where he observed a publicly traded company that was "poorly managed" before its IPO.

By 2012, Huang was ready to carve a new path. In his view, Silicon Valley had become too obvious; the consumer space was too predictable for interesting work and substantial rewards. During a week off from Twitter, considering starting a tech company in China, he traveled to Beijing to meet with six founders. One of them was Zhang Yiming, who was building a seemingly doomed consumer application. Zhang spoke through a translator, but Huang found himself captivated by the founder's non-verbal cues—his gestures, expressions, and intensity painted a picture that could be understood without words. As he left the apartment, Huang thought, "I have to find a way to support this person."

He wrote a check when ByteDance was valued at $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 approximately 10,000 times—$500,000 has turned into $500 million. He still holds most of his shares, and while he is "becoming increasingly indifferent" to it, he admits, "This will definitely make your head spin; it might be the best investment I've ever made." In the same year, he made seed investments in YC companies Instacart, Benchling, PlanGrid, and Amplitude—all of which are now valued in the billions.

In 2014, when he received an email from a Sequoia recruiter while at Twitter, he initially thought it was spam. Despite his impressive track record, he had no intention of becoming an investor. But curiosity won out, and his interview assignment—a one-page report on a company Sequoia should invest in—led him to write about Coinbase, which at the time had only seven employees.

At Sequoia, Huang discovered what he described as "the highest standard I've ever experienced." On his second day at work, Facebook acquired WhatsApp for $19 billion, and the partners briefly gathered in the lounge. Champagne was poured, but no one touched it. Within five minutes, everyone returned to their work. A ten-billion-dollar exit paled in comparison to the legendary portfolio of the firm, which included trillion-dollar companies like Apple, Google, and Nvidia. This culture demanded excellence in a way that elevated his already considerable ambitions.

"You start to see how far the axes can extend, what great founders look like," Huang reflected on his four years there, "If you don't get exposed to these, your entire perception of possibilities lacks the dynamic range at the top." Sequoia also showed him that excellence comes in many forms. Working alongside investors with vastly different styles but consistency in key dimensions gave him the confidence to develop his own way: "Realizing I could do things my own way was incredibly liberating."

Sequoia also reaped valuable rewards from this. "Sequoia U.S. gets crushed every year in poker tournaments by Sequoia China," Leone recalled, "He went and brought it back for Sequoia U.S. Thanks to Matt Huang, we brought back Don Valentine’s colorful, crazy jacket." You wouldn't hear this story from Huang; he never boasts about his achievements. 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 captivated by its elegant fusion of mathematics, economics, computer science, and game theory.

"I thought it was a very beautiful idea," Huang recalled. But in the early days, it felt more like intellectual curiosity than an investment opportunity. It wasn't until 2012 that he bought some Bitcoin on the then-mainstream exchange Mt. Gox, experiencing the first major bubble. "You almost have to lose money the first time," he reflected, "and then you give up, thinking it's dead. When you see it revive and realize it hasn't died, you start to get curious."

Multiple sources report 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 leave Sequoia voluntarily."

At Sequoia, Huang found few colleagues who shared his growing belief in the importance of crypto. The firm supported his interests—he led several crypto investments on behalf of the company—but he increasingly sought dialogue partners outside the firm. He began attending monthly dinners in San Francisco with six to eight investors curious about crypto, discussing cutting-edge ideas in emerging technologies.

It was during this period in 2017 that Fred Ehrsam, freshly departed from his role as president of Coinbase, wrote a blog post arguing that cryptocurrencies were the metaverse. Still at Sequoia, Huang reached out to discuss the idea. "I knew I wasn't going to start a company around this," Ehrsam thought, "but it would be fun to pitch this idea to Sequoia."

What began as an intellectual exercise evolved into an in-depth discussion between the two, exchanging 40 emails that delved into the possibilities of crypto. Their backgrounds complemented each other perfectly: Ehrsam co-founded and operated some of the most important companies in the crypto space, while Huang brought top-tier investment experience.

"Before meeting Matt, nothing felt completely right," Ehrsam said, having explored founding a fund focused on crypto with several potential partners. Within six months, they methodically explored collaboration, from investment philosophy to fund structure, testing each other's consistency. They paid particular attention to ensuring a true partnership—everything was 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 he truly felt a sense of belonging: "It felt like a place I could retire if they wanted to keep me." Multiple sources report 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 leave Sequoia voluntarily." But Huang was convinced that crypto would become one of the most important technological trends of the coming decades. "When he told me he thought this was a once-in-a-lifetime opportunity, it was easy to let go. Follow your dreams, go pursue it," Leone said with a hint of regret, "I’m mad at myself because he was always talking about Bitcoin, and I usually have a good nose for these things. If I were really smart, I would have followed that lead and created an opportunity for him to start a fund at Sequoia."

Disrupting the Status Quo: Huang and Ehrsam

Huang and Ehrsam founded Paradigm in June 2018, based on two arguments: first, that crypto would be one of the most significant technological and economic transformations of the coming decades; and second, that the field lacked the kind of investors they hoped to have as entrepreneurs—investors deeply rooted in "crypto-native" principles.

Graham Duncan, founder of East Rock Capital and advisor to Paradigm—whom Huang considers the most helpful person in the company's early days—was struck by their beliefs from the very beginning. "They were always planning for what could happen from a scale perspective, which seemed almost absurd to me," Duncan said. "It shocked me, but it was not at all arrogant. Their time horizon was completely different, and the things they planned for ultimately happened."

At the end of 2018, they raised their first fund, securing $400 million from top institutions including Harvard, Stanford, and Yale—these universities made their first significant investments in crypto—as well as Sequoia. The fund structure was novel: open-ended, with no fixed capital return timeline, allowing for holdings in public crypto assets and private investments. Then they made a bolder move: unlike most venture capital firms that gradually call capital, 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—this was a huge bet 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 chat discussing the Bitcoin Cash fork, became their first employee. "From his messages, I thought he was a 40-year-old bearded, cynical, rugged guy," Huang recalled, "so I was really surprised when he showed up at dinner and was only 19."

Noyes had been immersed in the crypto world since he was 12, discovering Bitcoin through gaming circles. He had published papers on crypto applications and won the Intel Science Competition twice before dropping out to attend MIT, and then dropping out again to join Paradigm. He initially struggled to adapt to office life—he thought "commenting on investment plans via email and coming to the office once a week" was normal. On his first day, when he was late, Huang sat down to explain career expectations to him. This patience paid off.

Now, at 25, Noyes is a general partner 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 (Maximal 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, establishing critical market rules for a $450 billion ecosystem.

Dan Robinson, Huang's high school friend and "the smartest person I knew as a kid," embodies the technical depth needed to push the crypto frontier. After being disappointed at Harvard Law School, Robinson turned to programming and explored crypto while working at the blockchain company Stellar. Huang and Ehrsam crafted a unique role for him that encompassed investing, research, and helping portfolio companies build. This compromise became the template for Paradigm's research-driven approach, with Robinson later inventing key mechanisms for the crypto-leading decentralized exchange Uniswap.

"She is the third partner of Matt and Fred, who completely built this company," Graham Duncan said, referring to Alana Palmedo.

Paradigm's Managing Partners: Huang with Palmedo

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 crypto with traditional finance. Although she was not "deeply knowledgeable about crypto," her experience managing complex operations at the Boston University Foundation and the Bill Gates Investment Office, especially during the 2008 financial crisis, proved invaluable. Initially skeptical, she was impressed 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, who completely built this company," Duncan, who helped interview Palmedo, said. She initially managed everything from trade settlement to finance to compliance, then recruited specialists for each function, allowing the investment team to focus on trading. Now, as a managing partner, she has built a high-performance culture at Paradigm, requiring everyone, regardless of role, to maintain thorough transparency and daily self-reflection. "Everyone has to be in the top 1% of 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 committed another $360 million. This timing exemplified Huang's approach: raising capital when others were skeptical, garnering support from partners who believed crypto would fundamentally reshape finance.

Although crypto has yet to fully realize its transformative promise, Paradigm's investments have yielded exceptional 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 reveal that Paradigm has also returned all of its limited partners' initial capital, paying out over $1 billion from that fund.

Long-Term Vision

Despite Paradigm's early success, one can't help but wonder why Huang, someone who no longer needed to worry about money and seemed to have a perfect job at Sequoia, would bother to venture into the wild world of crypto.

Coinbase CEO and co-founder Brian Armstrong has pondered a similar question—"Who would leave a job at Sequoia, right?"—and then answered, "He's a silent killer. Our industry needs more people like him who have high integrity and work for long-term goals and the right reasons. He has such a strong conviction that he took an unusual path."

For Huang, the answer is simple: "I think I've always been a bit skeptical of authority, so when I see authority exerting influence, I think: Is this how we want the world to operate?"

"Americans look at China and say, that looks dystopian," 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 attempted to limit certain industries' access to banking services. The "Choke Point 1.0" from 2013 to 2017 targeted industries deemed "high risk," such as payday lending and gun dealers. Under the Biden administration, "Choke Point 2.0" focuses on "de-banking" crypto. Even individuals like Uniswap founder Hayden Adams and Gemini co-founder Tyler Winklevoss have found their personal bank accounts suddenly closed without reason.

Huang believes crypto will undergo three key phases of evolution: first as currency, then as a financial system, and finally as an internet platform. Each phase builds on the previous one and facilitates the next. "Currency is upstream of the other parts 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 already produced remarkable results. Bitcoin has evolved from a white paper in 2008 to an asset now valued at nearly $2 trillion, becoming the most valuable startup since its release. Surprisingly, even nations—including the U.S.—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 amassed $50 billion in just 11 months—the fastest-growing ETF launch in history. Traditional portfolio models are also shifting, with Fidelity now recommending a 1-3% exposure to crypto assets. The classic 60/40 portfolio is evolving into "59/39/2," as institutions carve out dedicated allocations for crypto assets.

The second phase—building a whole 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—digital currencies pegged to stable assets like the dollar—demonstrate this potential, with their circulation growing from $500 million to over $200 billion since Paradigm's founding.

The third phase—as an internet platform—is still the most nascent and hardest to grasp. Unlike today's internet, where platforms control user data and online assets, crypto could enable true digital ownership and direct interaction between users without intermediaries. High transaction costs have hindered the development of everyday applications like social media and gaming, but Huang believes this will change as new scaling technologies significantly reduce costs. The infrastructure supporting NFTs and meme coins will ultimately facilitate more serious applications, just as YouTube evolved from cat videos into one of the world's most important platforms.

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

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

However, Huang maintains a long-term perspective. Just as the early internet attracted outstanding researchers alongside scammers and fraudsters, the open frontier of crypto fosters both innovation and bad behavior. 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 (Initial Coin Offering) bubble of 2017 brought mainstream attention to crypto and spawned a generation of new crypto-rich investors. Some of that capital flowed into developing 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 just $1 today. On Coinbase's popular Layer 2 network Base, the same transaction costs less than a penny. In turn, circulation has grown exponentially, increasing 400 times since the bubble burst, with real-world use cases emerging alongside it.

SpaceX uses stablecoins to repatriate revenue from emerging markets, converting local currencies into instant transfers of digital dollars. Scale AI pays its global data labeling network through stablecoin rails, eliminating cross-border friction and costs. Companies like Ramp's finance teams have discovered another advantage: while savings account interest is negligible, stablecoins backed by treasury bills can capture most of the profits that banks typically keep for themselves.

Data supports this narrative. Transaction volume has grown by 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 the stablecoin payment 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 significant improvements in speed, reach, and cost in the coming years."

Matt's character is unique. He is calm, rigorous, and patient—traits particularly suited for complex technologies like crypto that have delayed consequences. —Patrick Collison, Stripe

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

Critics often point out the lack of impact crypto has on everyday business. Huang believes stablecoins are the next killer application but also distinguishes between "single-player" technologies like AI (which provide immediate utility) and "multiplayer" technologies like crypto (which require coordinated adoption). "It's like adopting a new language or settling in a new city," he explains, "it's useless if you do it alone." He points to email as an enlightening analogy. Early critics called it "technically interesting but economically naive," similar to today's skepticism about crypto.

When speaking with Huang, his calm demeanor regarding the overall crypto landscape is striking. Patrick Collison brought Huang onto the Stripe board not only for his crypto expertise but also for his broader business insights. He said, "Matt's character is unique. He is calm, rigorous, and patient—traits particularly suited for complex technologies like crypto that have delayed consequences."

What sets him apart is his ability to hold both sides of an investment thesis simultaneously. "He can handle bear case scenarios, which are often much more concrete than bull case scenarios," Collison said, "and then he understands the potential of technology, seeing how small nascent things can become big deals 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 the Paradigm team even considered expanding their focus to include AI. But they remain committed to cryptocurrency, with Huang explaining, "AI will do just fine with or without us. Crypto is a very important technology that needs to coexist with AI, but there aren't many great defenders of it. We think it's important to commit to it and ensure it truly succeeds."

Invention

This commitment to ensuring the success of crypto 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 addressing the foundational technical issues that scale the entire industry's capabilities.

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 commercial, 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 this specific type is very important in crypto," Robinson explained. "Most investment research is about gathering and analyzing existing information. We try to invent new things." Breakthroughs from the research team often stem from exploring theoretical questions before the company even realizes it needs answers, such as target liquidity.

What is unique about crypto is how mathematical mechanisms create enormous leverage. 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 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 that facilitated seed investment and began actively improving it. His contributions to Uniswap v2 enabled trading between any Ethereum-based tokens, helping the protocol expand from $2 billion in trading volume to over $1 trillion.

However, Robinson and Adams spent much 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 concentrate capital where it was actually needed. This innovation became Uniswap v3, increasing capital efficiency by up to 4,000 times. A $5 million position could 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 competing with other companies, Paradigm can actually help you build a crypto company. They have experts in protocol design, security, law, and even policy. —Brian Armstrong, Coinbase

This research-driven model of facilitating breakthrough products has repeatedly appeared in Paradigm's portfolio. Last year, when Blur proposed increasing margin trading to the company, the team faced a fundamental challenge: how to safely lend against illiquid NFTs with uncertain values? The research team spent four months developing a brand-new lending protocol called Blend. "If you can solve the lending problem for NFTs," Robinson pointed out, "you could potentially 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 spot opportunities that others miss because they have already researched similar technical challenges. When algorithmic stablecoins like Terra became popular, Paradigm steered clear—years of experience trying to design better stablecoin mechanisms told the company that these projects did not address the fundamental issues.

This deep technical work creates a powerful competitive advantage in finding and closing deals as well as recruiting talent. "When they compete with other companies," Coinbase's Armstrong explained, "Paradigm can actually help you build a crypto company. They have experts in protocol design, security, law, and even policy."

"The biggest part of our process is figuring out what the most important questions are," Robinson explained. This requires keeping pace with the rapidly evolving frontier of crypto. "The generations of the internet are short," Huang noted, drawing an analogy to Sherlock Holmes gathering critical intelligence from the network of street urchins in London, "even two years can create a difference in understanding crypto culture."

This insight led to the Paradigm Fellowship program, aimed at identifying outstanding young developers still in school. The program partly stems from the company's experience with transmissions11, a team they discovered through Discord when he was in high school. When he dialed into a pitch meeting from a school assembly, it highlighted both the challenges and opportunities of collaborating with the next generation of innovators in crypto.

Sketching the next breakthrough: Constantopoulos, Noyes, and Robinson

Crypto Crypto Crypto

On the last Thursday of May 2023, a reporter from the crypto news company The Block uncovered an event that sparked controversy in the industry. Using the Wayback Machine from the Internet Archive, they noticed that Paradigm had quietly removed all mentions of "crypto" from its homepage and social media, rebranding itself as a "research-driven technology investment company." This seemingly obvious discovery—despite the change having occurred a month prior—triggered an immediate backlash. In an industry with deep loyalty where betrayal is harshly punished, this felt like a betrayal.

"We don't want to work for you anymore," a portfolio company wrote on Twitter, referencing the rebranding and Paradigm's investment in FTX, "this has become a scar for our entire industry." The criticism stung but reflected the brutal honesty of crypto. Paradigm not only restored the term "crypto" but doubled down, adding a flashing neon sign on their homepage that read: "Crypto Crypto Crypto."

The reality behind the change was more mundane. Two researchers on the team complained that potential AI collaborators were not responding to emails after seeing "crypto" on Paradigm's homepage. "We thought, well, all the crypto people already know 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 pointed out that the Paradigm website "might be the fastest you’ve used this year.")

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

For Paradigm, the website controversy marked a humbling period. Just 18 months prior, the company seemed flawless. Its Bitcoin position had grown 15 times. One of its earliest investments, Coinbase, went public with a valuation of $85 billion. It raised a $2.5 billion venture fund. However, the frenzy of 2021 would test even the most disciplined crypto investors.

Fred Ersam saw the warning signs. In March 2021, he sent a letter titled "Navigating the Crypto Cycle" to his portfolio companies. After noting that prices had doubled in just two months, with Bitcoin surpassing $1 trillion and "pixelated crypto art selling for millions," he warned, "Even senators have laser eyes! The frenzy is everywhere." Drawing from his experience at Coinbase—where a third of the staff left during the downturn from 2014 to 2017—he listed specific preparations: stress test the system under 10-100x usage spikes, consider raising capital when available, and warn new hires about the brutal cycles of crypto.

Down years are easier than up years. The signal-to-noise ratio is high, prices are down, but in the long run, it doesn't bother us. —Matt Huang, Paradigm

His warnings, though prescient, were not enough to navigate everything. "We made a lot of mistakes during that period," Huang reflected, "when you focus too much on your 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 compromising at times, feeling that if we didn't do this or hire that person, we would fall behind. In hindsight, those were wrong decisions."

Huang is not good with spreadsheets and doesn't remember the company's largest peak-to-trough drawdown, but there is one moment 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 gracing magazine covers. That October, he delivered a keynote at Paradigm's LP meeting. A few weeks later, FTX collapsed amid fraud allegations and revelations of misappropriated customer funds.

The investment failure was complete, but the betrayal hurt more. During due diligence, Paradigm had identified key risks: FTX's relationship with Bankman-Fried's trading firm, Alameda Research. The team asked direct questions but received false assurances in return. Later, Huang testified at Bankman-Fried's criminal trial, an experience that reinforced the important lesson about founder consistency.

"It was clear at the time that he was inconsistent with our vision of improving crypto," 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 compromises advocated by Bankman-Fried were seen by Paradigm as detrimental to crypto's core commitments.

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, valuing it at $1.33 billion. Since then, trading volume on the NFT marketplace has dropped 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, "there'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 than up years. The signal-to-noise ratio is high, prices are down, but in the long run, it doesn't bother us."

The company emerged from this period 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 new investments added a clear filtering criterion: founders must align with Paradigm's mission to advance the frontier of crypto.

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

Writing the Future

Behind Georgeos Constantopoulos's desk sits a mini electric guitar, which he occasionally picks up to play during impromptu meetings. The image of the company's CTO suddenly riffing while discussing blockchain architecture captures the essence of his approach: a combination of technical prowess and an intuition for practicality.

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

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

This role evolved in unexpected ways. In 2020, while helping the portfolio company Optimism implement 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. Constantopoulos shifted from supporting companies one by one to thinking about whether he could build open-source infrastructure to push the entire industry forward.

The things people tell you are hard are often not hard. It's just that it seems hard because you can't control your tools. —Georgeos Constantopoulos, Paradigm

This philosophy led to his first major contribution, Foundry. Constantopoulos spent a weekend creating a tool that significantly simplified the process of writing secure smart contracts. It can be thought of as a spell checker for blockchain code—but instead of catching spelling errors, it prevents millions of dollars in vulnerabilities. Within months, it became the industry standard, achieving a market penetration of 90% and securing over $100 billion in smart contracts (to date).

However, the success of Foundry highlighted a deeper challenge. Ethereum, as the primary platform driving crypto innovation, was running on inefficient software, making scaling nearly impossible. It was like trying to stream 4K video over a dial-up connection. Constantopoulos 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 Constantopoulos 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 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—the impact was profound. By optimizing this foundational process, Reth was 80% smaller than alternatives and 10 times faster. Major platforms like Coinbase's Base, WorldCoin, and Optimism (valued at $1.65 billion in 2022) have relied on its exceptional performance (launching in June 2024).

These technical contributions created a virtuous cycle. Paradigm's 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 join Paradigm.

This strategy peaked last October when Paradigm spun out Ithaca and invested $20 million. As CEO (while retaining his role as Paradigm's CTO), Constantopoulos aimed to commercialize what his team had built. "Other teams need 20-30 engineers, seed funding, and two years to accomplish what we can do in weeks," he pointed out.

His confidence stems from having built every layer from the ground up in crypto to the user interface, with Reth and Foundry in between. "The things people tell you are hard are often not hard," he argues, "it's just that it seems hard because you can't control your tools." This thoroughly self-sufficient philosophy—building any tools needed for the industry—has changed Paradigm's role in crypto.

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

On the back of Huang's MacBook, one detail stands out: three stickers perfectly aligned, with the logos of Foundry and Reth flanking the Paradigm logo. This reflects both his attention to detail and offers a window into his vision for the evolution of venture capital. "What if Sequoia not only supported Google but also founded it?" he increasingly finds himself wondering. This question points to a future where the lines between investors and builders blur.

In Constantopoulos's journey from gaming enthusiast to architect of core crypto infrastructure, Huang and Ersam's original argument is realized: crypto needs a different kind of investor. Not just exceptional talents 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 crypto 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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