Wintermute founder Evgeny Gaevoy says the only path for crypto is to break free from centralized systems and build independent, permissionless decentralized systems. He rejects absorption by traditional finance and utopian ideals, advocating for a parallel system outside state and corporate control. Gaevoy emphasizes the need for privacy, decentralized governance, and resilient infrastructure. He also identifies state channels as a key tool for scaling and preserving autonomy within this new framework.

Golden Path (p1)

Original author: Evgeny Gaevoy, founder of Wintermute

AididiaoJP, Foresight News

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

Below are my recent thoughts on the philosophical position of cryptocurrency. This is more like a manifesto, explaining “why we are here.”

Golden Route

For a long time, Dune has been one of my top three favorite books. In recent years, this might have changed (for example, the Culture series is now higher on my list), but it still holds a special place in my heart, as it helped shape my thinking around the age of twenty.

Most people focus on the first three books in this series, but for me, it was the fourth book, God Emperor of Dune, that left a lasting impression and truly shaped my views on the value of progress, diversity, and what the world ought to be. By that point, the core idea of the series was this: for humanity to survive, its only path is diversification. The "Golden Path" is a millennia-long plan that first imposes a rigid stability upon humanity, so that when this stability eventually vanishes, humanity will come to despise it from the very core of its being—hating all forms of centralization. As the books put it:

A lesson etched into humanity’s bones: comfort protected from all harm is no different from total death, no matter how long it’s prolonged.

We are naturally drawn to stability, to organizing things against chaos and disorder. We are inherently inclined to build empires—whether nations or corporations. We know all empires fall and all businesses die, yet we keep building, each time larger and stronger. But the bigger we build, the harder the fall. Even more terrifying is that this ultimate empire-building could drag all of humanity into extinction—either because excessive centralization makes us vulnerable to external shocks, or because internal “evolution” leads us to abandon our existence as a society. Thus, history repeats itself in cycles: from chaos to self-organization, to empire, then collapse. The most important lesson I learned from the “Golden Path” is this: during the phase of integration, we must embrace diversity and reject empire, no matter how tempting its stability (and promised prosperity) may seem.

In today’s nations, there is too much “protected comfort.” In today’s corporations and financial systems, there is also too much “protected comfort.” I believe both are slowly pushing us toward an inevitable collapse. To be clear, this is not opposition to capitalism or progress. On the contrary, there is less and less capitalism within this system, and more of a mediocre, uninspired form of nationalism. In summary, the major monsters that may emerge in the future are:

· Anarcho-capitalism: Businesses win, governments lose. Whether it’s the world of Tessier-Ashpool, CosaNostra Pizza Inc., or Weyland-Yutani, everyone except the big gears in the machine has a hard time.

Nationalism: Nation-states control everything and divide the world. Whether this leads ultimately to something like 1984 or something slightly better is unclear.

Fascism: Businesses and government collude. This is the Galactic Empire from Star Wars—rebellion is almost inevitable. Which country might head down this path?

What’s on the other side? What refuses to give you “protected comfort” and instead forces you to treat personal sovereignty and independence as your top priority? What strives to break free from national borders and completely ignores closed financial systems? What treats “insecurity” as a feature, not a flaw? Good question—the answer is cryptocurrency.

The road ahead

I’ve been in this industry for nearly nine years, and I’ve never felt this lost—there’s nothing truly exciting to look forward to. On the surface, it seems we’ve gotten most of what we wanted: institutions have entered, and people are using the technology. But something’s missing—not just the price, but the soul, the sense of “what are we even doing?” Meanwhile, the outside world keeps moving forward, and now an even hotter new thing has emerged (“artificial intelligence”). We’ve completely lost our way.

Of course, not everyone feels this way. Some believe that the rise of stablecoins means victory. Others are celebrating how decentralized perpetual trading platforms have outdone traditional finance and centralized finance’s “old-school” models. Still others aim to build their own empires at the intersection of DeFi and traditional finance. We’re seeing “enterprise blockchains” resurface, once again hailed as “great.” So yes, some are excited—but I’m not, even though Wintermute could certainly profit if it integrated with traditional finance.

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

Traditional finance has absorbed cryptocurrency. Stablecoins have become widespread, with KYC-compliant enterprise blockchains and KYC-compliant “decentralized exchanges.” The financial machine runs faster, with fewer intermediaries. Bitcoin has become digital gold, mostly held by sovereign governments, corporate treasuries, and ETFs. Or perhaps CBDCs are adopted globally, and our financial privacy is completely controlled. The technology is impressive, but haven’t we been utterly defeated? It’s obvious. Probability: Highest

The government surrenders to blockchain, with everything running on permissionless ledgers, while KYC/AML systems go take a hike. You only pay crypto taxes when converting to fiat, and token market caps reach trillions. A free, glorious world—and also a purely imaginary one, where we’ve won (but only in our dreams). Probability: Minimal

Coexisting uncomfortably. We built a completely independent system parallel to the existing one. You can personally remain in both, but the government cannot touch it—it’s architecturally isolated. We won, and we won fairly. The odds depend entirely on us.

I hope you sensed that I have zero interest in Option 1—it merely makes the existing machine (whichever of the three giants ultimately wins) run more smoothly.

I know some people think Option 2 is possible, but that’s pure fantasy. Governments won’t give up sovereignty any more than corporations will voluntarily abandon monopolies. Casinos won’t just pop up randomly on Solana. The CFTC won’t turn a blind eye to Hyperliquid operating without KYC and no regulation. Do I really need to remind you? Which centralized stablecoin issuer can’t freeze assets when served with a court order? For this to happen, the entire socioeconomic system would have to collapse—and I have three children to support and over a hundred people under my care. I certainly don’t wish for that.

That leaves only Option 3. You can call it the metaverse, a digital nation, a DAO, or a cultural tribe. What they all have in common is that they exist independently—and often conflict with, or even oppose, the political and financial systems of the "real world."

Matrix

Our biggest problem is that many people have never truly internalized this lesson—especially those of us in Western countries, who have grown accustomed to progress and increasing convenience, never having experienced what it’s like to lack sovereignty. Ironically, between 2022 and 2024, we got our most vivid taste of it yet: on one side, aggressive regulatory crackdowns from the SEC and CFTC; on the other, centralized institutions (FTX/Alameda plus venture capital) nearly buying up half the crypto space. What did we learn? The lesson was completely backwards. Instead of doubling down on fighting for freedom, we came to believe that winning simply meant putting the right people in the right positions.

At the same time, we’ve complained for years about the poor user experience in cryptocurrency, how Bitcoin isn’t a convenient payment tool (indeed, it isn’t), and the endless hacks. What if we’ve been completely wrong? What if these inconveniences are precisely the price we must pay for sovereignty—the culture we should actively embrace? I’m not saying we should consider MetaMask the pinnacle of innovation, nor am I saying everyone must engrave their seed phrases on metal plates. I’m saying we should strive to optimize user experience with a target audience not of the 50% who fundamentally don’t need it, but of the 50% who truly need sovereignty—whether it’s people in developing countries watching their democracy erode and fall under total government control, or those in developed nations where laws are increasingly resembling those in China and Russia, eroding privacy (such as in Europe and the UK).

Our goal shouldn’t be to fight against “regulation” or “government.” Our goal should be to create something they fundamentally cannot control. The key is to avoid dependencies on points that can be shut down: fiat on-ramps and off-ramps, app stores, DNS resolution, centralized sequencers, social media platforms, and of course, centralized stablecoins (which can be frozen at will). What we build must not be shut down by a single court order or a corporate bureaucrat flipping a switch. Tax authorities shouldn’t even be thinking about our non-compliant tokens—unless we convert them to fiat. Ultimately, it comes down to this: we must create a place where ordinary people can exist without needing anyone’s permission.

Specifically:

• Embrace permissionless, sovereign protocols—not opaque off-chain solutions.
• The DAO was originally right, but what I’m referring to are those that never actually functioned—those completely controlled by centralized entities, putting on a fake governance show. We never truly built a real community; we were only focused on how to incentivize people to post comments.
• Learn to either avoid relying on centralized systems altogether, or be ready to instantly switch to an alternative if any external component is cut off. This includes infrastructure (cloud, large models), social coordination tools, and of course, stablecoins.
• Let’s make algorithmic stablecoins great again—we went wrong by becoming too obsessed with Ponzi models. The core ideas behind DAI and UST were sound; the mistake was adding USDC to DAI and stacking unsustainable yields on UST. It’s perfectly normal that DAI, backed solely by ETH, hasn’t matched Tether’s scale—we never truly tried to build a parallel economy. Even better—what if we just traded directly with cryptocurrencies among ourselves? But that step might still be premature.
• Privacy must be protected. Any tool is acceptable as long as it works.

Discrete

The ending of "God Emperor of Dune" is "Dispersal"—the God Emperor dies, and humanity scatters into the void. After 2022, we too should have fragmented, should have learned the lessons—but it’s not too late now.

We don’t always get to choose where in the world we find ourselves. Some are trapped in their countries with no way out; others are bound by responsibilities they’ve taken on. My more pessimistic prediction is that in the coming years, our reasons for wanting to escape will only multiply. The great monster will keep growing, suppressing more and more. It’s currently impossible—even if such a place truly existed—to fully flee into a “better” parallel crypto world. But at the very least, we can (re)start building something, so that future generations have somewhere to escape to, while allowing the real world and the crypto world to coexist.

The only tools worth building are those that can be used to escape. When cryptocurrency eventually loses its popularity (and it will), it will still function independently of the outside world. More importantly, it gives meaning to what we do and what we build.

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

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