$5B bet on 7 engineers: Stripe's gamble nobody vetted

The $5B valuation riding on 7 engineers nobody vetted

Tempo didn't just raise $500 million in October 2025 — it assembled a who's who of institutions that rarely collaborate on crypto projects: Visa, Deutsche Bank, UBS, Mastercard, OpenAI, Anthropic, Shopify, Revolut, and Nubank. The Series A, led by Thrive Capital and Greenoaks, valued the company at $5 billion. Co-incubated by Stripe and Paradigm, Tempo is a Layer 1 blockchain designed exclusively for stablecoin payments, promising 100,000+ transactions per second with sub-second finality and a target fee of $0.001 per transaction.

The pitch is clean. Stripe processed $1 trillion in payments in 2024 and needs infrastructure that scales to handle the global stablecoin market, valued at $173 billion. Tempo is that infrastructure.

But here's what the press releases don't tell you: Tempo's entire technical foundation depends on Commonware, a startup founded in 2024 with 7 employees (including founder Patrick O'Grady), only $25 million in funding, and zero production history. Commonware provides Simplex Consensus, the engine that must process those 100,000 transactions per second without failing.

Let's be real: how does a $5 billion project, backed by global financial institutions, put its most critical infrastructure in the hands of 7 people? After years covering the enterprise sector, this is the first time I've seen risk concentration this extreme in a tech unicorn. If Commonware fails — due to software bugs, key employee turnover, or simply an inability to scale to production — Tempo's entire bet collapses.

Stripe's $1.6B crypto spending spree: pattern or panic?

In February 2025, Stripe acquired Bridge, a stablecoin issuance and management infrastructure, for $1.1 billion. In August 2024, Bridge had raised $58M at an undisclosed valuation, processing $5 billion annualized. Stripe paid approximately 19x-22x revenue — an extremely high multiple even for high-growth SaaS.

In June 2025, Stripe acquired Privy, a crypto wallet and Web3 authentication platform, for an undisclosed amount (market estimates range from $200M-$400M based on their last seed round of $18.5M in 2023).

And now Tempo. Although Stripe didn't invest directly in the $500M Series A, it co-incubated the project with Paradigm and presumably put capital into undisclosed pre-seed/seed rounds. Conservatively estimating $100M-$300M in Stripe's investment in Tempo so far (based on implied equity participation), we arrive at a total spend of:

Bridge ($1,100M) + Privy ($300M) + Tempo ($200M) = $1,600M+ in crypto in 12 months.

If we add working capital, internal infrastructure development, and the fact that Stripe is a co-founder of Tempo (implying contributions beyond cash, like dedicated engineering), the number easily exceeds $2 billion in resources committed to Stripe's crypto strategy.

Here's my take: Stripe is making an existential bet on crypto because it sees that the future of global digital payments is moving toward stablecoins, and if it doesn't control that infrastructure, it will be disintermediated by Circle, Coinbase, and others. But the urgency is palpable. The valuations paid are rich. The dependence on unproven components is high. And the fact that neither Stripe nor Paradigm put money into Tempo's Series A at a $5B valuation suggests that, internally, they have doubts about whether that number is defensible.

Is this a visionary bet or desperation? From where I sit, it's a mix of both. Stripe sees that the stablecoin market ($173B market cap in 2024) is growing exponentially, and that competitors like Circle (issuer of USDC) and Coinbase (which has Base, its own L2) are capturing value that Stripe, as a traditional payment processor, cannot monetize.

But paying 19x-22x revenue multiples for Bridge, building a proprietary blockchain (Tempo) when alternatives like Polygon already work, and betting on a 7-person startup (Commonware) for critical infrastructure... that's not exactly conservative execution.

Paradigm's control without capital: the governance red flag

Matt Huang, managing partner at Paradigm (one of the most influential crypto VCs in the world) and board member at Stripe, is simultaneously CEO of Tempo. This triple role is already unusual — startup CEOs typically don't hold executive positions at their own investors.

Fortune revealed in October 2025 a detail that went unnoticed: neither Paradigm nor Stripe contributed capital to the $500 million Series A. External VCs (Thrive, Greenoaks, Sequoia) put up all the money. Paradigm incubated Tempo, controls the technical strategy, and placed its own managing partner as CEO, but didn't bet its own capital at a $5 billion valuation.

What does this mean? From my perspective covering corporate governance in tech for over a decade, this is a giant red flag. If Paradigm genuinely believes Tempo is worth $5B, why not put skin in the game? There are two possible explanations: (1) Paradigm considers the valuation inflated and prefers other VCs to take the risk, or (2) they already captured enough upside in earlier (non-public) rounds and don't need to dilute themselves further.

The conflict of interest here is structural. Matt Huang must answer to three groups with divergent interests: Tempo shareholders, Paradigm's limited partners, and Stripe (as a board member). If Tempo fails, who does he protect? If Paradigm has to choose between defending its reputation vs financially supporting Tempo, what does it do given that it didn't invest in the Series A?

This isn't abstract speculation. We saw this with WeWork and SoftBank: when a VC controls governance but has asymmetric incentives (SoftBank was more concerned about its Vision Fund than WeWork per se), the result is disastrous for employees and minority shareholders.

I've seen this movie before. The difference here is that Tempo is at least open-source and has real institutional partners. But the risk concentration in Commonware and Paradigm's structural conflict of interest are red flags that minority investors should take very seriously.

100K TPS with zero production proof: how Tempo compares to battle-tested chains

Tempo promises to process 100,000+ transactions per second with sub-second finality. For context: Solana, which has been in production since 2020 and has a mature ecosystem with thousands of developers, delivers 1,344 real TPS according to block explorer data from January 2026. Yes, Solana can do bursts of 50,000+ TPS under ideal conditions, but sustained throughput is two orders of magnitude lower than what Tempo promises.

Tempo's bet to achieve 100K TPS is Simplex Consensus, developed by Commonware. According to technical documentation, Simplex eliminates certain communication rounds between validators that slow down systems like Tendermint (used by Cosmos) or HotStuff (used by Aptos). In theory, this allows radically higher speeds.

The problem: Commonware has 4 clients (according to Fortune, November 2025), and Tempo is its first production user. No battle-testing. No public stress tests (Tempo's testnet was private until December 2025). No case studies of companies that have run Simplex at scale for months without downtime.

Let's compare with proven alternatives:

Tempo has proven nothing publicly. The testnet launched in December 2025, and the mainnet is scheduled for "2026" without a specific date. Meanwhile, Polygon already processes Stripe payments at scale, and Base (Coinbase) has native USDC with millions of real users.

Is it technically possible for Commonware to achieve 100K sustained TPS? Maybe. Betting $5 billion in valuation on "maybe" — when the team has 7 people and no production proof — is adventurous. Why are institutions like Deutsche Bank and UBS betting on this when they could use Polygon or Base?

Why Ethereum's brain drain to Tempo isn't about technology

In October 2025, Dankrad Feist, lead researcher at Ethereum Foundation and architect of the data availability sharding system (proto-danksharding, EIP-4844), announced he was leaving his full-time role at EF to join Tempo. The media presented it as massive validation for Tempo: "If the brain behind Ethereum's scaling goes to Tempo, it's because Tempo is the future."

Dankrad's departure exposed an internal salary crisis at Ethereum Foundation that the Ethereum community had been privately denouncing for months. According to discussions on Ethereum forums and developer tweets, EF pays salaries significantly below the tech market (unofficial estimates range from $150K-$250K for senior researchers, while companies like Anthropic or Coinbase pay $400K-$600K+ for equivalent roles).

Dankrad didn't leave because Tempo is technically superior to Ethereum. He left because Tempo, backed by Stripe and Paradigm, offered him a competitive salary package with the 2026 tech market — something EF, operating as a non-profit with public spending transparency, cannot or will not match.

The Ethereum community didn't celebrate Dankrad's departure. There were comparisons to "Greta Thunberg joining British Petroleum" (a reference to someone abandoning principles for corporate money). Joe Petrich, founder of Courtyard, tweeted: "No one wants another blockchain" — referencing that Tempo is just another L1 when the ecosystem already has 100+ and what's needed is consolidation, not fragmentation.

The elephant in the room is compensation, not technology. Dankrad likely has an equity package in Tempo that, if the project reaches a $20B+ valuation in future rounds, makes him a millionaire. Ethereum Foundation can't offer that because it has no equity — it's pure open-source.

If you ask me directly: high-profile departures are rarely just about "better technology." They're about compensation, equity, and control. And Tempo, for all its technical promises, is also a compensation arbitrage play for talent locked in underpaid non-profit structures.