Wintermute Founder: There is only one way out for cryptocurrency — escape the "empire"

Title: Golden Path (Part 1)

Author: Evgeny Gaevoy, Founder of Wintermute

Translation by: AididiaoJP, Foresight News

I’ve been thinking about this article for a long time. My views on whether cypherpunks can succeed, whether libertarianism can work, and whether cryptocurrencies are viable have been changing constantly.

Below are my recent thoughts on the philosophical position of cryptocurrency. This feels more like a declaration—explaining “why we are here.”

The Golden Path

For a long time, Dune has been one of my top three favorite books. It might have shifted in recent years (now the Culture series ranks higher), but it remains very special to me, as it shaped my thinking around age twenty.

Most people focus on the first three books, but for me, it’s the fourth book, Dune Messiah, that I can’t forget. It truly influenced my views on progress, diversity, and what the world should be. The core idea of this series up to that point is: humanity’s only way to survive is through diversification. The “Golden Path” is a millennia-long plan—initially forcing humanity into stability, but once that stability is gone, humans will fundamentally despise it and any form of centralization. As the book puts it:

“A lesson carved into their bones: comfort provided by protection is no different from total death, no matter how long it can be delayed.”

We are naturally drawn to stability, to organizing things, to fighting chaos and disorder. We are inherently inclined to build empires—whether nations or corporations. We know all empires will fall, all companies will die, but we keep building, bigger and stronger each time. Yet, the larger we build, the worse the collapse will be. Even more frightening is that this ultimate empire-building might lead humanity to extinction—either because of over-concentration making us vulnerable to external shocks, or because internal “evolution” leads us to abandon social existence altogether. So history repeats itself: from chaos to self-organization, to empire, then collapse. The most important lesson I’ve learned from the Golden Path is: during the phase of integration, we should embrace diversity and reject empires—no matter how tempting the stability (and promised prosperity) they offer.

Today, there are too many “comforts of protection” in our countries. There are also too many “comforts of protection” in our financial systems and corporations. I believe both are slowly pushing us toward an inevitable collapse. To be clear, this isn’t an attack on capitalism or progress. Quite the opposite—capitalism within this system is diminishing, replaced by increasingly dysfunctional and unambitious nationalism. In summary, the potential monsters of the future include:

· Anarcho-capitalism: corporations win, governments lose. Whether it’s Tessier-Ashpool, CosaNostra Pizza Inc., or Weyland-Yutani’s world, aside from the big gears of machinery, life is tough for everyone else.

· Nationalism: nation-states control everything, dividing the world. Will it lead to a 1984-like dystopia, or something slightly better? Hard to say.

· Fascism: corporations and governments colluding. This is like the Galactic Empire in Star Wars—rebellion is almost inevitable. Which countries might go down this path?

And what about the other side? What is it that refuses to give you the “comfort of protection,” instead forcing you to prioritize personal sovereignty and independence? What efforts aim to break out of national borders, ignoring closed financial systems? What treats “insecurity” as a feature rather than a flaw? Good question—that word is cryptocurrency.

The Road Ahead

I’ve been in this “industry” for nearly nine years, and I’ve never felt such confusion and disillusionment. It seems like there’s little to look forward to. On the surface, we’ve achieved most of what we wanted: “institutions are entering,” and some are using the technology. But something feels missing—not just in price, but in spirit, in the sense of “what are we really doing.” Meanwhile, the outside world keeps moving forward, and now there’s a new hot topic (“Artificial Intelligence”). We are completely lost.

Of course, not everyone feels this way. Some believe that the rise of stablecoins is a win. Others celebrate how decentralized perpetual trading platforms have defeated traditional and centralized finance “dinosaurs.” Still, some want to build their own empire at the intersection of DeFi and traditional finance. We see “enterprise chains” re-emerging, and enterprise blockchains being “great” again. So yes, some are excited, but I’m not—though Wintermute could profit from integrating with traditional finance.

My lack of excitement comes from seeing several different paths, only one that is feasible and worth pursuing:

1. Traditional finance absorbs cryptocurrencies. Stablecoins become widespread, enterprise chains with KYC, decentralized exchanges with KYC. The financial machinery speeds up, with fewer middlemen. Bitcoin becomes digital gold, mostly held by sovereign governments, corporate treasuries, and ETFs. Or perhaps CBDCs are adopted worldwide, and our (financial) privacy is fully controlled. The technology is impressive, but it’s clear we’re losing—big time. Probability: high.

2. Governments surrender to blockchain—everything runs on permissionless ledgers, with KYC/AML still in play. Only when converting to fiat do cryptocurrencies get taxed, with token market cap reaching trillions. A free, glorious world—yet purely imaginary, a dream we hold onto. Probability: low.

3. Coexistence in discomfort. Building a parallel, fully independent system alongside the existing one. Individuals can operate in both worlds; governments can’t interfere because it’s designed to be separate. We win, and we do so legitimately. Probability: entirely up to us.

I hope you can sense that I have zero interest in option 1. It’s just about making the current machine run more smoothly—regardless of which of the three monsters ultimately wins.

I know some believe option 2 might be possible, but that’s just a dream. Governments won’t give up sovereignty, just as corporations won’t voluntarily relinquish monopolies. Casinos won’t just open on Solana. The CFTC won’t turn a blind eye to Hyperliquid’s lack of KYC and regulation. Need I remind you? Which centralized stablecoin issuer can hold a court order to freeze assets? Such scenarios will only happen if the entire socio-economic system collapses—I have three kids to raise and over a hundred people to support, and I don’t wish for that.

So, only option 3 remains. You can call it the metaverse, cyber-nation, DAO, or cultural tribe. The commonality is independence, often conflicting with or even opposing “real-world” political and financial systems.

The Matrix

Our biggest problem is that many people have never truly internalized this lesson. Especially those of us in Western countries, who have gradually become accustomed to progress and convenience, never experiencing what life is like without sovereignty. Ironically, from 2022 to 2024, we actually experienced it firsthand: on one side, SEC and CFTC’s regulatory onslaught; on the other, centralized institutions (FTX/Alameda + venture capital) nearly bought up half of all crypto. And what did we learn? The opposite of what we should have. Instead of fighting harder for freedom, we thought that just putting the right people in the right places would be enough.

Meanwhile, we’ve complained for years about poor user experience in crypto—Bitcoin isn’t convenient for payments (it’s true), and we’ve been hacked endlessly. But what if we’re all wrong? What if these inconveniences are precisely the sacrifices we must make for sovereignty? A culture we should actively embrace? I’m not saying we should think MetaMask is the pinnacle of innovation, or that everyone should engrave seed phrases on metal plates. I mean that we should focus on optimizing user experience—not for the 50% of the world that doesn’t need sovereignty, but for the 50% that truly does—whether it’s people in developing countries watching their democracies erode and being fully controlled by governments, or in developed nations where laws increasingly resemble those of China and Russia (like Europe and the UK).

Our goal shouldn’t be to fight “regulation” or “governments.” It should be to create something they can’t control at all. The key is to avoid reliance on choke points: fiat on/off ramps, app stores, DNS resolution, centralized order books, social media platforms, and of course, centralized stablecoins (which can be frozen with a single court order). What we build shouldn’t be shut down by a court subpoena or a bureaucrat flipping a switch. Tax authorities shouldn’t be able to target our non-compliant tokens (unless we switch to fiat). Ultimately, we need to create a place where ordinary people can live without needing anyone’s approval.

Specifically:

• Embrace permissionless, sovereign protocols—avoid opaque off-chain solutions.
• DAOs are correct in principle, but I mean those that haven’t actually worked—those controlled entirely by centralized entities, just pretending to be decentralized governance. We’ve never truly built a proper community, just thinking about how to incentivize comments.
• Learn to either not rely on centralized systems or be able to switch instantly if they’re cut off. This includes infrastructure (cloud, large models), social coordination tools, and stablecoins.
• Make algorithmic stablecoins great again—our mistake was obsessing over Ponzi models. DAI and UST weren’t wrong in concept; the mistake was adding USDC to DAI or stacking unsustainable yields on UST. DAI is backed solely by ETH, but it can’t match Tether’s scale—that’s normal. We need to build a parallel economy first, which we’ve never truly tried. Even better—direct crypto-to-crypto transactions among ourselves, though that might still be early.
• Privacy must be protected. Whatever tools are used, as long as it’s implemented, it’s fine.

Dispersal

The ending of Dune Messiah is “dispersal”—the God Emperor dies, and humanity scatters into the void. After 2022, we should have already dispersed, learned the lesson, but it’s not too late.

We (and) can’t always choose where in the world we are. Some are trapped in countries with no way out; others are bound by their responsibilities. My more pessimistic prediction is that in the coming years, the reasons to escape will only grow. That big monster will keep growing, and repression will intensify. Fully escaping into a “better” parallel crypto world is impossible now, even if it exists. But at least we can (re)build something—creating a refuge for future generations, while allowing the coexistence of the real world and the crypto world.

Tools for escape are the only things worth building. When crypto inevitably falls out of favor (which it will), it will still be usable without external influence. More importantly, it will give our actions and creations some meaning.

Most of us will choose to coexist with the empire—because responsibility, comfort, money, or other pursuits are understandable and acceptable. The remaining small group will create an exit, then reclaim what we’ve lost.

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