Joining Paradigm as EIRs

We are incredibly excited to share that we’re joining Paradigm as EIRs.

Paradigm’s body of work speaks for itself. Over the last few months, we’ve been spending time with Georgios and Caitlin while we’ve been working on our new company, Shadow. They’ve been helpful and gracious with their time in so many ways; making customer intros, setting up power user research sessions, pushing us to always think big, and just generally being an incredible sounding board.

As we’ve gotten to know the rest of folks on the team, we’ve been struck by how sharp and long-term oriented everyone is. Commit by commit, Paradigm has built a reputation of technical excellence — and as the founders of a crypto data infrastructure company, we can’t think of a better set of folks to partner with early on.

So what are we working on?

Mo’ usage mo’ problems

New data problems arise as new patterns of usage emerge.

Up until fairly recently, the primary use cases for crypto were trading tokens and transmitting value. So the first data problems in crypto centered around tracking token prices and the flows of funds. Companies like Chainlink built price feeds, and companies like Chainalysis built data tools for institutions to investigate Very Bad Things.

Over the last few years, we’ve seen exciting new use cases surface across DeFi, NFTs, DAOs, decentralized social, identity, and more.

These new use cases - and more builders and users coming onchain everyday - have introduced an entirely new set of data problems.

Blockchains reflect human activity

Today, millions of addresses conduct 30M+ transactions each month just on Ethereum L1.

This onchain activity weaves a brilliant web of behavior across commerce, art and culture, financial activity, and social coordination. Basically, all of the things that make us human.

Fascinating stories are waiting to be uncovered amongst this pile of data. Stories of thrilling triumphs and tragic tribulations fit for a digital-age epic, as well as more common records of day-to-day undertakings.

We believe these stories should be told. They should be interpreted, annotated, made accessible, and utilized – in a privacy preserving manner – to progress us towards a more open and decentralized Internet and financial system for all.

Check the chain

“Great, let’s do this! Should be easy, right? All the data is public. LFG!!”

Not so fast.

While onchain data is technically public to all, this data is limited in nature and not easy to work with.

Today, people who want to use onchain data need to invest a ton of time and resources setting up infrastructure just to get it into a usable state. Setting up performant infrastructure can take months of dedicated engineering time and cost over six figures per year to run.

Today, nearly every company trying to work with onchain data faces these challenges.

Data producers ≠ data consumers ≠ data payors

In addition to high costs, there’s a huge principal agent problem.

The people who control how onchain data is produced (protocol developers) are not the people who care the most about consuming it (researchers and analysts). And the people who pay for the data to actually get generated on an ongoing basis (users) don’t really care about it at all.

By design, computation and storage is expensive on blockchain networks. While the economics of blockchains are what makes them interesting, these economics fundamentally constrain data production. In crypto, basic data operations that a web2 builder wouldn’t think twice about – using storage, emitting event logs, and performing computations – all cost precious gas that are ultimately borne by users.

In addition, many smart contracts require lengthy governance mechanics to modify, or are entirely immutable once deployed. This makes it very hard to go back and change how data is produced at a later point in time. If a deployed smart contract omits an important piece of data that you need – tough luck.

The combination of these problems means that working with onchain data today is a verifiable mess.

There must be a better way

The status quo is that data produced by smart contracts is set in stone by a select few, who can't possibly predict all the future data needs from everybody.

We’re optimistic that the current state of affairs can be drastically improved.

New data challenges require new approaches. Blockchains are fundamentally new types of databases, and databases have had 40 years for infrastructure to get built to get to where we are today.

Best practices in smart contract development, onchain data engineering, and onchain analysis are still being defined and we’re fired up to contribute our point of view to the ecosystem.

Our mission at Shadow is to bridge the gap between data producers and data consumers in the unique open data ecosystem of crypto.

We will arm builders, researchers, and analysts with the infrastructure and tools to make use of onchain data 10x more effectively – and we’ll do it in a way that ensures fair incentives for data producers and end users.

Realizing this will help make smart contracts more performant, improve our collective understanding of onchain activity, and unlock new crypto and web3 experiences for future adopters.

We’ll be working closely with the Paradigm team over the next few months to build towards this mission, and are excited to share more soon.

Until then, see you onchain 🫡

Alvin & Emily