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Paradigm has more than half of its 2024 vintage, $850 million fund to invest in companies in the crypto space, managing partner Alana Palmedo tells Axios.

Axios sat down with Palmedo late last week so speak about what she's watching in crypto, the IPO markets, and why she believes prediction markets could become institutional — where the big money sits.

This conversation has been edited for clarity.

I hear you graduated early from high school — is that correct?

"So I went to college early — at 16, and then graduated [college] at 19."

It also afforded me the opportunity to graduate into the greatest financial crisis in 2008 (laughs)... I think that informed my whole perspective on financial markets."

We're in a whole new world for crypto. What are you spending your time on, aside from stablecoins and payments?

"Prediction markets is one — if you're an analyst at a hedge fund and you want to take a position on a given company [MAU or EPS], it's ultimately reliant on how correlated your forecast is with the market.

I think prediction markets are this new form of being able to have more precise expressions of the position or for investment or forecast that you want to make, and that's also going to trickle down and apply to things that are non financial as well, like the weather, which has been really popular, or sports, or, mayoral races."

Do you think it'll eventually be institutional?

"My belief would be that it is inclusive of the institutional investors as well as all the way down to sort of the consumer, retail-oriented folks. I  don't think that they would be recommending it to clients today, but it's not infeasible to me that that ends up becoming part of the conversation with clients."

IPO markets are back — we've seen several crypto companies go public. How are you all approaching that?

"Based on the structure of our funds and how we tend to invest, it's just not something we're particularly focused on today. Our support is much more long-dated.

I would say on IPO markets — I think the SEC's public disclosure requirements require tremendous amounts of compliance and operational overhead — and that is a limiter, if you will, for who is eligible and who makes sense to become a company in the public lens. It's not a small undertaking.

And yes, of course, there is also the benefit of crypto assets having this liquidity component. I think you could argue that's both a blessing and a curse because it's bringing liquidity to companies that are oftentimes earlier stage than might be the case with traditional IPOs."

Paradigm has been highly active in D.C. What are you asking for in the market structure bill?

"I think the thing that is important is protecting developer rights and free speech. We think it's important to protect decentralized finance. So for instance, if you put out open-source code, are you liable for the code that you put out, if based on how other people are choosing to use the code?

If they are held liable [for how it's being applied], they might not be as incentivized or interested in putting things out in an open source manner. And we think access to open source and continuing to have a community develop and share what they're building is at the heart of innovation. 

We also want to make sure that anything that comes out of that is ultimately going to be able to serve us for many decades, and not something that's point in time.

We'll be vocal there as some of the drafts come out in the next three, four weeks."

Crypto companies and firms including Paradigm have been vocal about debanking, saying major banks have refused the industry access under Biden. What's happening now?

"On the commercial banking side, I think, yes, banks are open for business again, and that's actually fantastic. For a long time, it had been harder for crypto companies to get access to traditional banking rails. Imagine you're a founder and you can't get access to something fairly basic to make payroll each month."

You told Colossus that Paradigm has a culture of radical transparency. Tell me more.

"We have a process internally where each person at Paradigm posts the most important question to them of each day in a public channel, and then riff with yourself. That might be 'What do I think about this part of the business?' or 'Where do I think the market is going?' It could also be like a self-focused one — 'What is a growth area for me?'

"It's this idea of always getting better. We talk a lot about what is our growth arc — and the rate of growth each individual person is pushing themselves at or against is ultimately their own limiter. So if I'm growing at 7% a year, but Chris is growing at 10% a year, then I'm doing something wrong. How do I grow faster? This is very important culturally."

Paradigm partner talks transparency, policy, and prediction markets

The crypto investor's managing partner talks policy, strategy and transparency.

Photo illustration of Alana Palmedo surrounded by abstract shapes. 

Photo illustration: Axios Visuals. Photo: Courtesy of Paradigm

<p>Paradigm has more than half of its <a class="gtmContentClick" data-vars-link-text="2024 vintage" data-vars-click-url="https://www.paradigm.xyz/2024/06/paradigms-third-fund" data-vars-content-id="15c3fb8d-ba64-40b7-8c0a-4e98b7bfe4f7" data-vars-headline="Paradigm partner talks transparency, policy, and prediction markets" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.paradigm.xyz/2024/06/paradigms-third-fund" target="_blank">2024 vintage</a>, $850 million fund to invest in companies in the crypto space, managing partner Alana Palmedo tells Axios.</p><ul><li>Axios sat down with Palmedo late last week so speak about what she&#x27;s watching in crypto, the IPO markets, and why she believes prediction markets could become institutional — where the big money sits.</li></ul>

Paradigm partner talks transparency, policy, and prediction markets

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