Wintermute Founder: In the Lost Cryptocurrency Market, What Can We Still Do?

Original Article Title: Golden Path (p1)

Original Article Author: EvgenyGaevoy, Wintermute Founder

Original Article Translation: AididiaoJP, Foresight News

This article has been on my mind for a long time. My views on whether cypherpunk ideas can materialize, whether libertarianism can prevail, and whether cryptocurrency is viable have always been evolving.

Below are my recent thoughts on the philosophical positioning of cryptocurrency. This is more like a manifesto, explaining "why we are here in the first place."

Golden Path

For a long time, "Dune" has always been one of the top three books in my heart. It may have shifted in recent years (for example, the "Culture" series now ranks higher), but it still holds a special place in my heart, as it was something that shaped my thinking around the age of twenty.

While most people focus on the first three books in the series, for me, it was the fourth book, "God Emperor of Dune," that has stayed with me and truly influenced my views on progress, diversity, and how the world should be. The core idea of the series up to that point was: for humanity to survive, the only way is through diversity. The "Golden Path" is a plan spanning millennia, initially imposing a stable yoke on humanity, so that when this yoke eventually disappears, humanity will inherently despise that stability, loathe any form of centralization. In the words of the book:

"To etch into humanity a lesson: protected comfort is no different from complete death, no matter how long it can be prolonged."

We are inherently drawn to stability, to organizing things, to combating chaos and disorder. We are inherently drawn to building empires, whether they are nations or corporations. We know that all empires will fall, all corporations will die, but we continue to build, each time larger and stronger than before. However, the larger we build, the more catastrophic the fall. What's more frightening is that this ultimate empire-building endeavor may drag the entire human race into extinction, either because it is too centralized to withstand external blows or because it "evolves" internally to the point of forsaking its societal existence. Thus, history repeats itself in a loop: from chaos to self-organization, to empire, and then to collapse. From the "Golden Path," the most important lesson I learned is: during the integration phase, we should embrace diversity, reject empire, no matter how appealing its stability (and promised prosperity) may be.

In today's world, there is too much "protected comfort." In today's corporate/financial machinery, there is also too much "protected comfort." I feel that both of these are slowly pushing us towards an inevitable collapse. Let me be clear, this is not against capitalism or progress. On the contrary, there is less and less capitalism in this system, and more of a lousy and unproductive form of statism. In short, here are a few potential future monsters:

· Anarchocapitalism: Corporations win, governments lose. Whether it's the world of Tessier-Ashpool, CosaNostra Pizza Inc, or Weyland-Yutani, aside from the big gear in the machine, everyone else is having a hard time.

· Nationalism: Nation-states control everything, dividing the world. Will it end up like "1984," or slightly better? Hard to say.

· Fascism: Corporations and governments collude. This is the Galactic Empire in "Star Wars"—rebellion is almost inevitable. Which country might go down this path?

On the other side, what is it? What doesn't give you "protected comfort" but instead forces you to prioritize personal sovereignty and independence? What strives to break free from the confines of the nation-state, completely disregarding closed financial systems? What considers "insecurity" a feature, not a bug? Good question. The answer is cryptocurrency.

The Road Ahead

I've been in this "industry" for almost 9 years now, and I've never felt the atmosphere so bewildering, feeling like there's nothing to look forward to. On the surface, it seems like we've got most of what we wanted: the "institutions" are in, and people are using the tech. But I always feel like something is missing, not just a matter of price; it's the lack of "soul," the feeling of "what are we really doing." And the world outside keeps moving forward; there's now something new and even hotter ("artificial intelligence"). We're utterly lost.

Of course, not everyone feels this way. Some think stablecoins winning is the victory. Some are celebrating decentralized perpetual swap platforms beating out the "fuddy-duddies" of traditional and centralized finance. And some want to build their empire in the fusion of DeFi and traditional finance. We watch as the "enterprise chain" emerges again, and enterprise blockchains become "great." So yes, some are quite excited, but I'm not, even though Wintermute could make quite a bit if they integrate with traditional finance.

I'm not excited because I see several different paths ahead, only one of which is both viable and worth taking:

Mainstream finance absorbing cryptocurrency. Stablecoins becoming widespread, enterprise chains with KYC, KYC'd "decentralized exchanges." The financial machine runs faster, with fewer intermediaries. Bitcoin becomes digital gold, mostly held by sovereign governments, corporate treasuries, and ETFs. Or perhaps the whole world adopts CBDCs, and our financial privacy is fully controlled. The technology is indeed impressive, but we are thoroughly defeated, isn't that obvious? Likelihood: Highest

Governments surrendering to blockchain, everything running on permissionless ledgers, KYC/AML systems pushed aside. Only paying crypto taxes when converting to fiat, token market caps in the trillions. A world of freedom and glory. Also a world purely imagined, where we have won (but in a dream). Likelihood: Lowest

Coexisting uncomfortably. We build a parallel, entirely separate system from the existing one. You can straddle both sides personally, and the government can't touch it because it's designed to be isolated. We win, and we win with honor. Likelihood: It's all up to us

I hope you feel how disinterested I am in Solution 1. It just makes the existing machine (whichever of the three monsters wins in the end) run smoother.

I know some people think Solution 2 is possible, but that's pure dreaming. Governments cannot relinquish sovereignty, just as businesses cannot willingly give up monopolies. The casino cannot casually operate on Solana. The CFTC cannot turn a blind eye to KYC/AML violations on Hyperliquid. Do I need to remind you? Which centralized stablecoin issuer cannot freeze assets under a court order? For this to happen, the entire socio-economic structure needs to collapse. I have three kids to raise, and I'm responsible for over a hundred people. I do not wish for that.

So, only Solution 3 remains. You can call it the metaverse, a network state, a DAO, or a cultural tribe. They all share the characteristic of independent existence and often conflict with the "real-world" political and financial systems, even confronting them.

The Matrix

Our biggest issue is that many people have never truly internalized this lesson. Especially those of us in Western countries, gradually accustomed to progress, increasing convenience, never experiencing what it's like to lack sovereignty. Ironically, from 2022 to 2024, we might have genuinely experienced it: SEC and CFTC regulations swooping in while centralized entities (FTX/Alameda + VCs) nearly bought up half of the cryptocurrency space. And the result? The lesson we learned was entirely reversed. Instead of striving harder for freedom, we now think that as long as we put the right people in the right positions, we'll win.

At the same time, we have been complaining for years about the poor user experience of cryptocurrencies, how Bitcoin cannot serve as a convenient payment tool (indeed it is not convenient), the endless hacks, and so on. What if we have all been wrong? What if this inconvenience is actually the price we must pay for sovereignty, a culture that we should actively embrace? I'm not saying we should think that MetaMask represents the pinnacle of innovation. Nor am I saying that we all have to engrave our seed phrases on metal plates. I'm saying that we should strive to optimize the user experience, with the aim not being the 50% of the world that doesn't really need it, but the 50% of people who truly need sovereignty—whether it's those in developing countries watching democracy erode before their eyes, under complete government control, or those in developed countries becoming more like China and Russia, enacting anti-privacy laws (such as in Europe and the UK).

Our goal should not be to fight "regulation" or "government." Our goal should be to create something they simply cannot control. The key is not to rely on those vulnerable points: fiat gateways, app stores, DNS resolution, centralized sequencers, social media platforms, and of course, centralized stablecoins (which can be frozen at will). What we create should not be shut down by a single court order or a company bureaucrat flipping a switch. Tax authorities should not be able to go after our non-compliant tokens (unless we convert them to fiat). In the end, it all comes down to one thing: we need to create a place where the average person can exist without having to seek approval from anyone.

Specifically:

· Embrace permissionless, sovereign protocols, and avoid those black-box off-chain solutions

· DAOs were right from the start; what I'm referring to are precisely those that haven't been operationalized, those that are actually fully controlled by centralized entities, engaging in a facade of governance theater. We have never truly built a decent community, only thinking about how to incentivize everyone to engage in comment threads.

· Learn to either not rely on the centralized system or have a quick exit strategy if something outside gets shut down. This includes infrastructure (cloud, big models), social coordination tools, and of course, stablecoins.

· Make algorithmic stablecoins great again; our mistake was being too obsessed with the Ponzi model. The idea behind DAI and UST is not wrong; what's wrong is stuffing USDC into DAI and piling unsustainable yields onto UST. DAI relying solely on ETH collateral and not reaching Tether's scale is quite normal—we need to establish a parallel economy first, something we have never truly attempted. What's even better is—trading directly between ourselves using cryptocurrency, but this step may still be a bit premature.

· Must be able to protect privacy. Any tool will do, as long as it achieves that.

Disperse

The ending of "Dune Messiah" is "disperse" - the Emperor God is dead, and humanity scatters into the void. After 2022, we should have also dispersed, learned the lesson, but it's never too late.

We cannot always choose where in the world we are. Some are trapped in their country with no way out; some are bound by responsibilities they have taken on. My rather pessimistic prediction is that in the coming years, there will only be more reasons for us to want to escape. That big monster will keep growing, suppressing more and more. It's not possible to completely escape into a "better" parallel encrypted world now, even if it does exist. But at least we can start something, create a place for future generations to escape to, while allowing the real world and the encrypted world to coexist.

The only worthwhile thing to build is a tool for escape. When the day comes that cryptocurrency is no longer a trend (it will definitely decline), it will remain unaffected by the outside world and still usable. More importantly, it can give meaning to what we do and build.

Most of us will still choose to coexist with the empire. Because of responsibility, comfort, money, or any other pursuit, all of which are understandable, no problem. The remaining few will create exits, then find what we've lost and bring it back.

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