Wintermute CEO: The crypto industry has already lost its way; only personal sovereignty is the path worth taking.

Author: Evgeny Gaevoy, CEO of Wintermute

Translation: Deep潮 TechFlow

Deep潮 Introduction: Wintermute CEO Evgeny Gaevoy starts from the “Golden Path” in Dune and writes a rare philosophical declaration about the crypto industry. He doesn’t talk about prices or shout alpha, but directly points out: large-scale stablecoin adoption, institutional entry, KYC chains — these are not victories, but rather we’ve exchanged one set of shackles for a more efficient one.

This article was reposted simultaneously in two channels, representing the genuine sentiment of a group of crypto veterans: we’ve won on the surface but lost our soul.

The full text is as follows:

I’ve been pondering this article in my mind for a long time. My stance has been wavering: Is cyberpunk feasible? Is liberalism feasible? Is crypto itself feasible? Here are my latest thoughts on the current state of crypto philosophy.

I don’t believe these ideas are necessarily linked to price trends, nor do I think my article has any power to influence prices. If you’re here looking for alpha, you can just turn off now. This article is more like a declaration, a question of “why are we here”—a question that has become increasingly rare. The “p1” in the title suggests there may be more to come.

The Golden Path

Dune has been one of my top three books for most of my life. Recently, that ranking may have shifted (the “Culture” series now ranks higher), but it has profoundly influenced me, especially during my late teens to early twenties.

People often focus on the first three books of the series, but what truly left a mark on me was the fourth, Dune: The God Emperor. It deeply shaped my overall thinking about progress, the value of diversity (not in the political sense of pluralism), and “how things should work.” I apologize in advance for some spoilers.

Before the fourth book, the core idea of the series was: the only viable path for human survival is outward expansion, toward diversity. The “Golden Path” is a millennia-long plan—imposing order on humanity so that once it disappears, people will develop a thorough aversion to stability itself, rejecting any form of centralization at the cellular level. In other words, to “teach humanity a lesson deep in its bones”:

“Protection and security are equivalent to complete death, no matter how long that death is delayed.”

Seeking stability, organizing order, fighting chaos and entropy—these are human instincts. Building empires is also a human instinct, whether in the form of nation-states or corporations. We know all empires decay, all companies perish, yet we keep trying, each time building bigger and stronger. And the larger we build, the more catastrophic the collapse.

Worse still, the establishment of the ultimate empire might push humanity toward extinction—either through excessive centralization making us vulnerable to external shocks, or through internal “evolution” that abandons the very meaning of social existence. We cycle through history: from chaos to self-organization, from self-organization to empire, from empire to collapse.

The core insight from the “Golden Path” is: during the integration phase, we should embrace diversity and reject empires—no matter how tempting stability (and the prosperity it promises) may seem.

Existing nation-states offer abundant “protection and security.” Existing corporate/financial machinery also provides plenty of “protection and security.” In my view, both are slowly pushing us toward an inevitable collapse. To be clear: this is not an anti-capitalist or anti-progress stance. Quite the opposite, the real capitalism within this system is diminishing, while suffocating nationalism is increasing.

Overall, the potential future “Leviathan” could take several forms:

Anarcho-capitalism. Corporations win, governments retreat. Whether it’s the world of Tessier-Ashpool, CosaNostra Pizza, or Weyland-Yutani, the prospects look bleak for anyone not at the top of the machine.

Nationalism. Nation-states control everything, dividing the world. Will we end up in a 1984-like world or some milder form? No definitive answer yet.

Fascism. An unholy alliance between corporations and governments. This is the era of the Galactic Empire in Star Wars—rebellion is almost inevitable. As for which country might be heading down this path, that’s up to the reader’s judgment.

And what about the other side? What doesn’t offer “protection and security” but instead prioritizes individual sovereignty and independence? What seeks to transcend borders, completely ignoring closed financial systems? What considers “insecurity” a feature rather than a flaw? I’m glad you asked—that word is: crypto.

The Roads Ahead

I’ve been in this “industry” for nearly nine years. I’ve never felt such a profound sense of confusion, such a lack of promising directions.

On the surface, it seems we’ve achieved most of what we wanted: “institutional adoption,” technology being genuinely used. But something is lost—not just in price, but in its “soul,” in the question of “what are we really doing.” Meanwhile, the world keeps moving forward, with cooler kids emerging in the neighborhood (“AI”). We are utterly lost.

Of course, not everyone is. Some see the rise of stablecoins as a victory. Some are celebrating (perhaps prematurely) the victory of decentralized perpetual exchanges over TradFi and CeFi “dinosaurs.” Others are exploring building their own empires at the intersection of DeFi and TradFi. We see the resurgence of “enterprise chains,” and enterprise blockchains are once again “great.”

Yes, some are excited, but I am not—despite the fact that Wintermute could benefit greatly from this fusion.

I am not excited because I see different paths ahead, and only one is both feasible and worth pursuing:

Path 1: TradFi absorbs crypto. Stablecoins become widespread. KYC-compliant enterprise chains. KYC-compliant “decentralized exchanges.” The financial machinery runs more efficiently, with fewer middlemen. Bitcoin becomes digital gold, mostly owned by sovereign governments, corporate balance sheets, and ETFs. Or perhaps CBDCs are adopted globally, achieving total control over our (financial) privacy. The technology runs flawlessly, but isn’t it obvious—we’ve lost? Probability: highest.

Path 2: Governments surrender to blockchain, everything runs on permissionless ledgers, completely ignoring KYC/AML regimes. Crypto is taxed only when exchanging for fiat. Tokens reach a valuation in the trillions. This is a world of freedom and brilliance. But it’s also a very illusory world. We win (but it’s a dream). Probability: lowest.

Path 3: Uncomfortable coexistence. We build something that operates parallel to the existing system, completely independent of it. You can exist in both worlds simultaneously, and governments cannot touch it because it’s designed to be closed. We win, and we win beautifully. Probability: entirely depends on us.

I hope I’ve conveyed this feeling: Path 1 is utterly unappealing to me. It’s merely about making the existing machine (whichever of the three Leviathans ultimately wins) run more efficiently.

I know some believe Path 2 is possible, but that’s a pipe dream. Governments won’t give up sovereignty, just as corporations won’t voluntarily relinquish monopolies. Casinos won’t operate undisturbed on Solana. The CFTC won’t just let Hyperliquid run unregulated without KYC (even if current regulators are doing so, the next or the one after that won’t). Need I remind you that any centralized stablecoin issuer can be frozen by court order? The only scenario where this path might be realized is widespread socio-economic collapse—and as a father of three and employer of over a hundred, that’s not what I hope for.

So, only Path 3 remains. You can call it metaverse, cyber-nation, DAO, or cultural tribe. The commonality is independence, often in conflict with the political and financial systems of the “meatspace.”

Entering the Matrix

Our biggest problem is that many have never truly learned this lesson deep in their bones. Especially us Westerners, who have gradually become accustomed to progress, to everything becoming more convenient, but have never truly experienced the dark side of losing sovereignty.

Ironically, our most profound experience of that darkness—between 2022 and 2024—was when we were hit hard by SEC and CFTC regulation, yet also narrowly avoided the scenario where centralized entities almost bought out most of the crypto industry (FTX/Alameda plus VC conglomerates). But we learned the wrong lessons from it. Instead of doubling down on freedom, we believed that putting the right people in the right places would be enough to win.

Meanwhile, for years, we’ve complained about poor user experience, Bitcoin’s inconvenience as a medium of exchange (which is true—it’s inconvenient), endless hacks, and so on. But what if we got it all wrong from the start? What if this inconvenience is exactly what we need to actively embrace as a culture, as a reasonable price for sovereignty and identity?

I’m not saying we should treat MetaMask as the pinnacle of innovation. I’m not saying we should all engrave seed phrases on metal cylinders. What I am saying is that we should strive to optimize user experience for that 50% of truly sovereign individuals who need it—those in developing countries facing democratic erosion and full government control, and those living in countries increasingly resembling China and Russia, with all sorts of stupid privacy-infringing laws (yes, I’m talking about you, Europe and the UK).

Our goal should not be to fight “regulation” or “government.” Our fight should be to create something fundamentally uncontrollable. This means avoiding any single point of control: fiat on/off ramps, app stores, DNS hosting, centralized order books, social media platforms, and of course, centralized stablecoins (which can be frozen).

Whatever we build, it should not be easily shut down by a court order or a corporate bureaucrat with a switch. Tax authorities shouldn’t be able to target tokens that don’t comply with MiCA (at least before we exchange them). The ultimate goal is simple—we should create a system where ordinary people can exist without asking anyone’s permission.

Specifically, this means:

Embracing permissionless sovereign protocols, rejecting black-box off-chain solutions.

DAO is the right direction—I’m actually talking about those “failed” DAOs, the ones without a centralized entity behind the scenes controlling and fooling people with pretend governance. We’ve never truly built the right community, instead focusing on how to incentivize “comment spam.”

Learn to either avoid reliance on centralized tech stacks or be able to dynamically switch tech stacks when an external switch is turned off. This applies to infrastructure (cloud services, large language models), social coordination mechanisms, and of course, stablecoins (more on that next).

Make algorithmic stablecoins great again. Our mistake was being too deep into Ponzi-like structures. DAI and UST are not wrong paths per se—what’s wrong is backing USDC with DAI’s endorsement and giving UST unsustainable yields. DAI alone, backed only by ETH, cannot scale to Tether’s size—that’s perfectly reasonable—we need to first build a parallel economy, which we’ve never truly tried or done. A better approach is to trade directly with crypto among ourselves, but I believe that will happen at a later stage.

Privacy tools are essential.

Dispersal

The God Emperor ends with “dispersal”—after the emperor falls, humanity scatters into the void. After 2022, when we learned our lessons, we should have had our own “dispersal,” but it’s not too late.

We don’t always get to choose the part of the world we’re in today. Some are trapped in nearly inescapable countries; some are bound by self-imposed responsibilities. My rather pessimistic prediction is: in the coming years, more and more of us will have reasons to escape. The Leviathan will continue to grow, conquer, oppress. Even if a parallel crypto world truly exists, it’s unlikely we can fully escape into it now. But at least we can (re)start building escape routes for others, while allowing the real world and the crypto world to coexist.

The means of escape will be the only thing worth building. When crypto is no longer popular (which is inevitable), some systems will still operate outside the mainstream’s indifference. But more importantly, they will give meaning to everything we do and build.

Most of us will choose to coexist with Leviathan. Responsibility, comfort, money, or other meanings will drive them, and that’s okay. Those who stay will build exits, perhaps (just perhaps) reclaim what we’ve lost.