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The cryptocurrency market is on a whole new level these past couple of years as more and more people are beginning to notice it. As the number of crypto proponents grows in number, so do the endeavours and projects within the said space. It was learned that Matt Huang – former Sequoia Capital Partner and Coinbase Founder Fred Ehrsam have summed up to $2.5 billion for Paradigm One which is said to be a venture capital fund.
The latter pointed out that the accumulated fund is comparably small to how much they projected for it to grow in a decade.
However, there were fears for the said venture capital to create a bubble in cryptocurrencies, specifically within the realm of decentralized finance.
Paradigm beginnings
Reports noted that the initial funding for Paradigm raked in $400 million back in 2018, not to mention that it had a yearly internal rate of return of over 200 per cent during the first half of 2021. This alongside assets as high as $10 billion, though it needs to be pointed out that this could change due to price swings of cryptocurrencies.
In line with this, there’s a different fund coming from another venture capital firm dubbed Andreessen Horowitz, claiming that it had the biggest cryptocurrency-connected venture capital amounting to $2.2 billion earlier this year.
Paradigm Andreessen similarities
Further, both of the above-mentioned VCs have lured in more than what they’ve targeted. Additionally, Paradigm and Andreessen are trying to profit from the Ethereum (ETH) network, a notable blockchain-based software platform for creating and utilizing smart contracts and distributed applications.
Paradigm’s structure is said to be pretty much similar to that of a hedge fund which liberates it from the expectancy of giving back the capital to investors by a definite date which is said to be a requisite of venture capital funds.
Paradigm: ‘a desirable investor’
If Ehrsam and Huang’s claim is anything to go by, they stated that “Paradigm is a desirable investor.” This is due to the VC’s research team that works alongside portfolio firms. Also, the VC has teamed up with cryptocurrency collectives on what is described as “sweetheart deals” when these groups seek its endorsement.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
