This study explores the role of hackathons as temporary organizations within innovation ecosystems. Hackathons, known for their intensive, collaborative nature, are increasingly recognized as pivotal in addressing grand challenges through transdisciplinary collaboration. This research, drawing from extensive participatory observation of 70 global hackathons over ten years and iterative qualitative analysis, develops a novel taxonomy of hackathon typologies and identifies 28 key attributes that differentiate different hackathon types. The hackathon typologies are further distinguished by their core purpose and contribution to specific ecosystems—educational, entrepreneurial, or socio-institutional. The study unveils the critical risk of incurring in an "over-optimization paradox," which indicates that attempting to cater to all ecosystems simultaneously may dilute the effectiveness and impact of hackathons and highlights the tension between the depth of impact within a specific ecosystem and the breadth of engagement across multiple ecosystems. The findings demonstrate that while hackathons hold promise as platforms for innovation and learning, their success hinges on clear design choices and understanding how to work through their inherent paradoxes. This study contributes to the literature on hackathons, innovation ecosystems, and paradox theory, offering insights for both academics and practitioners on the design and evaluation of hackathons.