Crypto Current #93

Stripe's announcement of Tempo, a "payments-oriented Layer 1" built in partnership with Paradigm, reads like a masterclass in corporate blockchain strategy. Optimized for high-throughput payments, denominating fees in fiat currencies, and backed by an impressive roster of high-profile investors. The problem it solves appears real. Yet it feels like it falls into the "intranet trap" where established institutions recreate centralized versions of technology rather than valuing the network effects.

This week, we also share the latest DACM Insights podcast, featuring Richard Galvin in conversation with Sterling Ginther from Shuffle ($SHFL). Sterling explores how crypto rails enable opportunities in online gaming unavailable to traditional models, and how Shuffle's native token is being used as a central tool to reward and grow its user base.

What's happening in crypto?

Crypto markets showed mixed performance this week, with standout moves in AI-related tokens driving selective outperformance. Worldcoin ($WLD) emerged as a notable winner, surging over +100% throughout the week following announcements of Digital Asset Treasury raises and renewed excitement around Sam Altman's AI initiatives. Hyperliquid ($HYPE) also posted strong gains of +22% over the same period, reflecting continued institutional interest in high-performance derivatives platforms.

DACM Insights: Shuffle

Shuffle ($SHFL) is an online casino and sports betting platform powered by crypto rails and tokenomics, and forms part of our liquid fund portfolios. In the latest episode of DACM Insights, Richard sits down with Sterling Ginther from the Shuffle team to explore how crypto rails enable opportunities in online gaming unavailable to traditional models, and how Shuffle's native token is being used as a central tool to reward and grow its user base.

Click the image below to view the full conversation.

The Tempo paradox: Corporate chains and the Intranet trap

The latest corporate blockchain launch reveals an uncomfortable truth about decentralization's future—and why history suggests some may be building the wrong infrastructure

Stripe's announcement of Tempo, a "payments-oriented L1" (layer 1 blockchain) built in partnership with crypto investment firm Paradigm, reads like a masterclass in corporate blockchain strategy. Optimized for high-throughput payments, denominating fees in fiat currencies, and backed by an impressive roster of design partners from Deutsche Bank to OpenAI—it appears to solve real problems that existing public blockchains cannot address efficiently.

Yet beneath the technical sophistication lies a familiar pattern that should concern anyone who believes in cryptocurrency's original promise. Tempo represents the latest iteration of what we might call the "intranet trap"—the tendency for established institutions to recreate centralized versions of revolutionary technologies rather than adapting to their decentralized alternatives.

Why intranets failed: The architecture of control

The death of corporate intranets offers a striking parallel. By the mid-1990s, corporate intranets were "popping up all over the place" as internal websites for sharing documents and company information. Many companies launched their first intranet in the 1990s, before many Gen Z employees were even born, offering basic, static websites that provided a central location for employees to access information.

These early intranets seemed revolutionary. They solved real problems: instant access to company policies, centralized document storage, and internal communication tools. By 2000, 64.3% of the top 1,500 French companies already had an intranet in place. Yet today, despite being the 2nd most used employee communication channel after email, today's intranets still sit at the bottom of the table in terms of effectiveness.

What killed them wasn't technical inadequacy—it was architectural philosophy. Where the intranet failed was that it never really became the technology home for employees, as hoped. People simply went to email for that. Traditional intranets are seen as outdated because they are often static, one-way communication tools that fail to engage employees or meet the dynamic needs of modern workplaces.

The fatal flaw was control over content and access. While the internet enabled anyone to publish, create, and innovate, intranets required permission from IT departments for every modification.

Source: Researchgate. France's 'Minitel' intranet vs internet adoption. Minitel was finally shuttered in 2012.

The CBDC pattern: Control vs. value creation

Central Bank Digital Currencies represent perhaps the purest example of this control-versus-innovation tension. CBDCs promise the efficiency benefits of digital money while maintaining government oversight and monetary policy control. Yet every major CBDC initiative has struggled with the same fundamental contradiction that plagues corporate blockchains: the features that enable control are precisely those that prevent the network effects that create value.

China's digital Yuan, despite massive investment and forced adoption, has failed to generate the organic usage patterns that drive cryptocurrency adoption. The programmable money features that enable government surveillance and control make it less attractive than existing digital payment options that offer more privacy and flexibility.

The pattern is consistent: when institutions prioritize control over permissionless innovation, they create technically sophisticated systems that fail to achieve meaningful adoption or network effects. The same dynamics affecting CBDCs—where centralized control undermines the value proposition of digital money—apply directly to corporate blockchain initiatives like Tempo.

The permissionless performance

Matt Huang's (founder at Paradigm and lead on Tempo) response to community criticism reveals the fundamental tensions within Tempo's positioning. When questioned about building another L1 instead of an Ethereum L2, Huang emphasized that "building a network for global payments will require bringing together thousands of partners that may not trust us, or Stripe, or anyone as a platform."

This argument contains a logical contradiction that the crypto community was quick to identify. If partners don't trust Stripe or Paradigm, why would they trust a blockchain that Stripe and Paradigm designed, funded, and initially control? The claim that decentralized validators solve this trust problem ignores that the protocol's design choices—transaction lanes, gas pricing mechanisms, compliance features—reflect the founders' priorities and constraints.

The network effects dilemma

Stripe's rationale for Tempo highlights real problems. Bitcoin processes ~5 TPS, Ethereum ~20 TPS, while Stripe peaks at over 10,000 TPS. Existing blockchains denominate fees in volatile tokens rather than stable fiat currencies. These limitations create genuine friction for mainstream adoption.

However, solving these problems through vertical integration misses why blockchain networks became valuable in the first place. The power of Bitcoin isn't its transaction throughput—it's the global, permissionless settlement layer that enables anyone to participate without authorization. Ethereum's value isn't its current scalability—it's the composable ecosystem where any developer can build financial primitives that interact with every other application.

Tempo may process payments more efficiently than public blockchains, but it cannot replicate the network effects that emerge from open, permissionless systems. When Uniswap launched on Ethereum, it didn't need permission from Ethereum's creators. When Lightning Network developers built on Bitcoin, they didn't require approval from Bitcoin Core. This permissionless innovation is what creates exponential value growth rather than linear efficiency improvements.

The inevitable convergence

The history of digital networks suggests that open, interoperable systems eventually prevail over closed, optimized alternatives. Minitel's technical superiority couldn't compete with the internet's ability to enable global innovation. AOL's curated online experience gave way to the open web. Corporate intranets served important functions, but never replaced the internet as the primary digital infrastructure.

This doesn't mean corporate blockchains like Tempo are worthless. Like intranets, they may serve legitimate purposes for specific use cases and time periods. Large enterprises with complex compliance requirements may benefit from controlled environments that bridge traditional and decentralized systems.

However, positioning these solutions as long-term infrastructure rather than transitional bridges misunderstands the fundamental dynamics that drive network value. The most valuable digital networks are those that enable permissionless innovation, not those that optimize for current use cases.

Why network effects win

Tempo's announcement reveals the fundamental tension between control and innovation in cryptocurrency. Corporate blockchain initiatives often achieve impressive technical benchmarks and serve specific enterprise needs, but they cannot replicate the most important characteristic of public blockchains: enabling open innovation.

This is why DACM focuses on investing in networks that continue to attract developers, users, and capital and aims to avoid the ‘Minitel’ ecosystems that seem smart, but ultimately can’t scale.

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Established in 2017, DACM is an institutional investor focused on the digital asset sector. Our team invest across the digital asset sector, from early-stage venture partnerships to listed and derivative markets. DACM has developed a fundamental investment philosophy designed for family office and institutional investors, tested across multiple market cycles.

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