Had enough of your portfolio's underperformance? Crypto VC giant Paradigm is rolling up its sleeves to build a Layer2
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Had enough of your portfolio's underperformance? Crypto VC giant Paradigm is rolling up its sleeves to build a Layer2
Paradigm announced a $20 million investment in Ithaca, dedicated to building Odyssey, a Layer2 blockchain.
Navigating Web3 tides with focused insightsBy Frank, PANews
On October 11, Paradigm announced a $20 million investment into Ithaca to build a Layer 2 blockchain called Odyssey. Unlike previous financial investments, Paradigm has also assigned several executives to take leadership roles at Ithaca: Georgios Konstantopoulos, Paradigm's Chief Technology Officer and General Partner, will serve as CEO of Ithaca, while Matt Huang, co-founder of Paradigm, will become Chairman.
Paradigm Builds Its Own Layer 2: Odyssey
In fact, Paradigm has long maintained an internal team developing open-source projects. According to Ithaca, over the past four years, Paradigm has assembled a team of fewer than 20 engineers who have built widely used open-source tools such as Reth and Foundry. In this sense, Ithaca represents the formal spin-out of Paradigm’s technical project team into an independent company. The new company’s first major initiative is the Ethereum Layer 2 network, Odyssey.
Konstantopoulos described Odyssey as a “Layer 2 from the future” in a media interview. “What sets Odyssey apart is that it delivers multiple features from Ethereum’s future roadmap—capabilities that no other team has yet implemented,” he explained. “More powerful smart contract wallets mean frictionless onboarding for cryptocurrency users, which addresses one of the most critical problems we’re facing.”
The Odyssey testnet, Chapter 1, is already live on Sepolia, built using Reth (OP Stack) and deployed on Conduit. PANews found that Odyssey’s current wallet functionality differs significantly from traditional blockchain projects. Instead of requiring conventional wallet browser extensions to create accounts, Odyssey allows direct integration with Google or Apple’s key management tools.
A Network Without Wallets, Gas Tokens, or Bridges
According to official documentation, Odyssey enables users to log in without installing a wallet, holding gas tokens, or interacting with bridges—and without needing to configure new RPC endpoints. It works across devices and applications by leveraging operating system keychains or password managers. Additionally, Odyssey Chapter 1 incorporates several Ethereum Improvement Proposals (EIPs), including EIP-7702 (account abstraction), EOF (EVM Object Format), and RIP-7212 (secp256r1 elliptic curve precompile). Notably, RIP-7212 is reported to reduce gas costs by up to 50x compared to traditional methods. Ithaca says it is collaborating closely with Optimism, Uniswap, Conduit, Flashbots, Succinct, and Base to maximize EVM performance and improve developer and user experiences.
To date, Odyssey offers limited functionality. As shown on its testnet explorer, the network currently has approximately 2,700 addresses and 130,000 total transactions. Upcoming network upgrades are named Pectra and Fusaka. However, there has been no announcement regarding potential token airdrops, which many users may be anticipating.
When Investments Fall Short, Build It Yourself
Recently, the Layer 2 space has seen some unconventional entrants. First Uniswap announced Unichain; now Paradigm, traditionally an investor, has stepped in to build its own Layer 2.
Previously, Paradigm invested in multiple Ethereum L2s such as Optimism, StarkNet, Aztec Network, and Blast. However, these projects have underperformed relative to expectations. A comparison by PANews shows that Optimism, StarkNet, and Blast lag far behind Arbitrum and Base in key metrics. For example, on October 10, Optimism—the strongest among them—had only 98,000 active addresses, and Blast had just 38,000, compared to 1.6 million on Base and 480,000 on Arbitrum.
Perhaps dissatisfied with the progress of its portfolio L2s, Paradigm decided to take matters into its own hands?
Beyond underperforming L2s, several other recent investments by Paradigm have also disappointed. Friend.tech, once a viral sensation, collapsed after its airdrop—its daily active users dropped to just 15 on July 9 and further declined to only 8 by September 24. These setbacks have damaged Paradigm’s reputation.
We can only speculate whether Paradigm has grown frustrated with unreliable partners, prompting this bold move. On Ithaca’s minimalist website—which features only four sections—values are highlighted prominently. One statement stands out: “Driving things forward matters more than trying to stay right.” Perhaps this line best captures the spirit behind Paradigm’s latest endeavor.
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