Nowadays, the investment institution Paradigm, which best represents the encryption industry, has been "mocked" by a project in its own investment portfolio.

Paradigm, as a recognized top venture capital fund in the encryption industry, and possibly the top native encryption fund, has two founders with backgrounds in Coinbase and Sequoia Capital. These two well-known figures have made a difference, as the lead investments in projects like Uniswap and Blur have caused collective anxiety among VC players in the encryption industry: investments not only need to provide capital, but also strong support for project mechanisms and token economies.

Everything changes when backed by Paradigm. Source

It is extremely rare for top VCs like Paradigm to have disputes with their investment portfolios. The last time an event of this nature took place was with Binance, when they took Sequoia China to court. During that period, CZ tweeted that all projects applying for listing on Binance in the future would need to disclose whether they have any direct or indirect affiliation with Sequoia Capital.

However, this time the other protagonist of the story, Reflexer, which completed a seed round led by Paradigm in 2020, chose a simpler and more direct approach. They repurchased the FLX tokens held by Paradigm and directly permanently destroyed 50% of the repurchased tokens.

This token buyback can be seen as a punctuation mark for Reflexer's first article criticizing Paradigm in May 2023. Tweet.

Sarah: What did Paradigm do? Ameen: It will be disclosed, but not now. Source: Discord

In Reflexer's "denunciation letter," Reflexer mentioned that Paradigm's investment in FTX has caused a setback for the crypto industry, and after the official website of Paradigm was updated, many descriptions of crypto and web3 were deleted, and they turned to include "cutting-edge" technologies, including AI.

Although they have not replied to Reflexer or apologized to them, Paradigm chose to return to crypto in July and wrote about crypto on their official website again. Matt Huang, one of the partners at Paradigm, even stated that the previous website update was a mistake, and they never left the crypto space.

Perhaps it was a pleasant experience for Hayden, the elite and enthusiastic member of Uniswap, to collaborate with Paradigm. But for Ameen Soleimani, the co-founder of Reflexer, who has been immersed in the Ethereum community for many years, the private reduction of the FLX token to zero undoubtedly infuriated this "wild and unrestrained" Ethereum OG.

Madman Ameen Soleimani

Ameen Soleimani is not only a co-founder of Reflexer, but also an active member of the early Ethereum community. As early as 2017, he created the Ethereum finance platform SpankChain for the adult industry. Moreover, he often personally participates in adult film shoots and shares them on his social media.

Community members often leave comments under his tweets, jokingly saying that Ameen's unconventional tweets are a relief from their "boring" crypto lives.

However, it would be a big mistake to think of Ameen as just a playboy. The reason Ameen created SpankChain is to protect the rights of adult industry workers. He has also traveled to Washington D.C., met with representatives of the Washington D.C. Free Speech Coalition, and discussed the discrimination issues faced by the adult industry with Democratic and Republican lawmakers.

Source

He also initiated the FreeVirgil campaign to show support for Virgil Griffith, an Ethereum developer who is being accused by the U.S. government of "assisting North Korea in evading international economic sanctions".

After the mixer Tornado Cash was heavily sanctioned by the US government, Ameen continued to support Tornado in various occasions, setting his social media avatar as Tornado's logo. He also developed Privacy Pools based on the Tornado Cash protocol to ensure user privacy in a compliant manner. Ameen, along with co-founders Vitalik Buterin, Chainalysis researchers, and researchers from the University of Basel, jointly published a paper titled "Blockchain Privacy and Regulatory Compliance: Towards a Practical Equilibrium."

During a bullish market, there is no need for "madmen" because the entire industry is likely to be already collectively enthusiastic. However, Ameen's fervent defense of the cryptocurrency industry during a bear market exemplifies the spiritual core of an Ethereum believer.

Ameen Soleimani also co-founded Moloch DAO, which provides significant reference for DAO organizations. The first members include Vitalik and ConsenSys founder Joseph Lubin. In addition, Ameen joined MetaCartel DAO, a fork of Moloch DAO. Other members include Scott, founder of Canto and Slingshot, Peter Pan, founder of MetaCartel joined 1kx, Hugh Karp, founder of Nexus Mutual, Bobby, founder of Coingecko, Calvin Liu, former CSO of Compound and current Eigenlayer, as well as core members of Curve, StakeDAO, and rekt.

Perhaps it is the experience of multiple projects and DAOs that has gradually transformed Ameen into a representative figure who has clear opinions in the cryptocurrency community. Ameen's current actions demonstrate the true spirit of cryptocurrency.

The Backing of Reflexer

Thanks to Ameen's extensive social network and the soundness of Reflexer's design philosophy, Reflexer still has high-quality community resources even in the face of conflicts with Paradigm.

In the Reflexer Discord community, Ethereum co-founder Vitalik appeared after MakerDAO founder Rune Christensen proposed to create a new chain using Solana's codebase. Vitalik expressed support for Reflexer's decision to expand from minimal governance to a broader field, considering it a good choice to support more tokens for liquidity collateralization.

Earlier, Vitalik also praised RAI for better embodying the "ideal form" of an overcollateralized stablecoin supported solely by ETH. Vitalik himself has staked ETH in Reflexer and minted RAI.

Reflexer has received support from various projects in the community. Recently, Lido provided $63,000 in funding to Reflexer fork project HAI to help with the audit process (source). Reflexer also maintains a good relationship with stablecoin projects like Liquity and Frax in the stablecoin sector. Parsa from Synapse is an official member of Reflexer, and community member Reza is also involved in Decrypt, the cryptocurrency media outlet.

Reflexer, with its commitment to minimal governance, not only has a lean team but also remains open and provides theoretical and technical support to many community stablecoin projects. Some known projects include HAI, TAI, and Volt Protocol, which bring vitality to Reflexer as grassroots community projects.

Community Fed Up with VCs

Reflexer's attitude toward Paradigm reflects the sentiments of many community members toward venture capitalists (VCs). One user, Sisyphus, captures this sentiment in a tweet that summarizes,

"This year, you can make significant profits from zero to one in cryptocurrency, all thanks to self-sufficient projects without VC involvement."

Other users also add that this industry is the only one where proactive retail investors have a real chance to lead "smart money" by staying informed about crucial information that others may not have or understand the importance of. Actively participating in Discord and various social platforms allows individuals to gain access to such information through simple work.

And in contrast to this, the many star projects that went live in 2023 have not lived up to expectations. Not only have prices fallen all the way, but infrastructure and on-chain activity have also fallen below the limit. Some "Ghost Chains" have only a few hundred active daily addresses. With the slow death of many public chains, the Layer 1 concepts that were crazily pursued by VCs during the bull market seem to have been proven false.

Not only the community, but also VCs themselves have voiced accusations.

Nick Tomaino, the founder of 1confirmation, which has invested in well-known projects such as Opensea, Coinbase, SuperRare, and dYdX, said that VCs are the most deceptive industry in the world and also the "dumb money" in the crypto industry, because many people in this industry like to go with the flow.

Richard Chen, the GP of 1confirmation, said that in the bear market, it has become increasingly common for VCs to demand refunds from their portfolio companies. One well-known crypto VC on Twitter appeared to be very founder-friendly but withdrew several investments and requested refunds from several portfolio companies over the past year.

Even worse things have happened. Nima Capital, supported by a single family office, violated a governance proposal on September 5th and sold 9 million SYN, withdrawing all stablecoins. Even their official website is no longer accessible, and their Twitter account is protected. And in August, a New York apartment associated with Nima Capital was sold for $80 million on Billionaires' Row.

In the current context of increasing liquidity constraint and continuous decline in venture capital investment in the encryption industry, looking back at the encryption community in 2023, popular projects such as BRC 20, PEPE, and BITCOIN-like MEME coins, as well as TG Bot, are all community-driven projects. Popular protocols like Rollbit and OX also lack endorsements from well-known VCs, and even the highly popular friend.tech ranking has few institutional or investor backing.

It seems that the community has undergone a round of de-VC-ization.