Tired of the poor performance of your portfolio? Crypto VC giant Paradigm is getting involved in developing Layer 2

Author: Frank, PANews

On October 11, Paradigm announced that it has invested $20 million in Ithaca to build a Layer 2 blockchain named Odyssey. Unlike previous simple financial investments, Paradigm has also sent several executives to take positions at Ithaca, with Paradigm's Chief Technology Officer and General Partner Georgios Konstantopoulos serving as the CEO of Ithaca, and Paradigm co-founder Matt Huang taking on the role of Chairman.

Personally Building Layer 2 Odyssey

In fact, there has been a team within Paradigm working on open-source projects. According to Ithaca, over the past four years, Paradigm has organized an engineering team of fewer than 20 people to build some commonly used open-source tools in the industry, such as Reth and Foundry. From this perspective, Ithaca is essentially Paradigm formally spinning off its technical project team into a new company. The first project of this new company is the Ethereum Layer 2 network, Odyssey.

Konstantopoulos referred to Odyssey as "a Layer 2 from the future" in a media interview, stating, "What sets Odyssey apart is that it offers several features from Ethereum's future roadmap that have not yet been built by any other team." He explained, "A more powerful smart contract wallet means frictionless entry into cryptocurrency, which is one of the most important problems being addressed."

Currently, Odyssey's testnet Chapter 1 has launched on Sepolia, built with Reth (OP Stack) and deployed on Conduit. PANews has found that the wallet functionality currently offered by Odyssey is indeed different from previous blockchain projects. During use, Odyssey does not require traditional wallet extension applications to create accounts but can directly use Google or Apple's key management tools.

An Innovative Network Without Wallets, Gas Tokens, or Bridges

According to official information, Odyssey allows users to log in without installing a wallet, owning Gas tokens, or interacting with bridges, and without setting up new RPCs. This can work across devices and applications, utilizing the operating system's keychain or password manager. Additionally, Odyssey Chapter 1 includes several EIPs (Ethereum Improvement Proposals), such as EIP-7702 (account abstraction), EOF (EVM object format), and RIP-7212 (secp256r1 elliptic curve precompilation), among other new technical solutions. Notably, it is reported that RIP-7212 can reduce gas costs by up to 50 times compared to traditional methods. Ithaca has stated that it is closely collaborating with L2 networks such as Optimism, Uniswap, Conduit, Flashbots, Succinct, and Base to maximize EVM performance and improve developer and user experience.

As of now, there are not many available features to experience with Odyssey. According to its testnet explorer, the current total number of addresses is about 2,700, with a total of 130,000 transactions. It is reported that the next two network upgrades for Odyssey are called Pectra and Fusaka. However, regarding the user-concerned question of whether there will be an airdrop plan, there has been no news yet.

Poor Performance of Investment Projects Leads to Doing It Themselves

Recently, the Layer 2 track seems to have welcomed some different players. Previously, Uniswap announced the launch of Unichain, and now Paradigm's investors are personally stepping in to build Layer 2.

Previously, Paradigm had invested in several Ethereum L2s, such as Optimism, StarkNet, Aztec Network, and Blast. However, based on the current development situation, the status of these projects is not ideal. In a comparison of several L2s, PANews found that the data for Optimism, StarkNet, Blast, and others is far below that of Arbitrum or Base. For example, as of October 10, the best-performing Optimism had only 98,000 active addresses, while Blast had 38,000, compared to Base's 1.6 million and Arbitrum's 480,000 during the same period.

Perhaps the underperformance of the invested L2s did not meet Paradigm's expectations, prompting them to take action themselves?

In addition to the unsatisfactory performance of L2s, some other projects recently invested in by Paradigm have also performed poorly. The once-popular Friend.tech has been struggling since its airdrop, with daily active users dropping to just 15 on July 9. As of September 24, data showed that Friend.tech had only 8 daily active users left. Paradigm's reputation has also been affected as a result.

Has Paradigm had enough of unreliable partners, leading to this move? We cannot know for sure. On its brief official website, Ithaca specifically lists values as one of its sections (the website has a total of four sections), with one saying, "It is more important to push things forward than to try to be right," which may serve as an explanation for Paradigm's actions.