Author: Evgeny Gaevoy, Wintermute CEO

Translation: Deep Tide TechFlow

Deep Tide Introduction: Wintermute CEO Evgeny Gaevoy draws on the "Golden Path" from "Dune" to pen a rare philosophical declaration on the crypto industry. He does not discuss prices, nor does he shout alpha; instead, he directly states: the mass adoption of stablecoins, the entry of institutions, KYC chains—these are not victories; rather, we have exchanged one set of shackles for a more efficient one.

This article is shared across two channels, representing the authentic sentiments of a group of crypto veterans: we have won on the surface but lost our souls.

The full text is as follows:

I have been contemplating this article in my mind for a long time. My position has been wavering: Is cyberpunk feasible? Is liberalism feasible? Is crypto itself feasible? Here are my latest thoughts on the philosophical state of the crypto industry.

I do not believe these ideas are necessarily linked to price movements, nor do I think my article has any capacity to influence prices. If you are here to find "alpha," you can turn off right now. This article is more like a declaration, a questioning of "why we are here"—a questioning that has become extremely rare lately. The "p1" in the title implies (perhaps) that there may be more to come.

Golden Path

"Dune" has been among my top three books for most of my life. This ranking may have changed in recent years (the "Cultural" series now ranks higher), but its impact on me has been profound, particularly during the period from my late teens to my early twenties.

People often focus on the first three books of the series, but what truly left a mark on me was the fourth book, "Dune: God Emperor." It deeply influenced my overall thinking about progress, the value of diversity (not the politically defined diversity), and "how things should operate." I will spoil some details here, and I apologize in advance.

The core idea of the series prior to the fourth book is that the only viable path for human survival is to expand outward and embrace diversity. The "Golden Path" is a plan lasting thousands of years—imposing order on humanity so that once it disappears, people will develop a thorough aversion to stability and reject any form of centralization at a cellular level. In other words, it aims to "teach humanity a lesson at its core":

"Protected security is equivalent to total death, no matter how long this death is postponed."

Seeking stability, organizing order, resisting chaos and entropy—this is human nature. Establishing empires is also human nature, whether in the form of states or corporations. We know that all empires will decline, all corporations will perish, but we continue to try time and again, each time building bigger and stronger. And the bigger we build, the more catastrophic the collapse will be.

Worse still, the ultimate establishment of an empire may push humanity towards extinction—either due to excessive centralization and an inability to withstand external shocks or due to internal "evolution" and abandonment of the meaning of societal existence. Thus we cycle through history: from chaos to self-organization, from self-organization to empire, from empire to collapse.

The core revelation from the "Golden Path" concept for me is this: during the integration phase, we should embrace diversity and reject empires—no matter how tempting stability (and the prosperity it promises) may be.

Existing nation-states provide a great deal of "protected security." Existing corporate/financial machines also offer a great deal of "protected security." In my view, both are slowly pushing us toward inevitable collapse. It is important to clarify: this is not a stance against capitalism and/or progress. On the contrary, what is truly capitalism within this system is dwindling, while suffocating nationalism is on the rise.

Overall, the potential future forms of "Leviathan" are as follows:

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

Nationalism. Nation-states control everything and divide the world. Whether we eventually trend towards a world akin to "1984" or some milder form remains an open question.

Fascism. An unholy alliance between corporations and governments. This is reminiscent of the Galactic Empire era in "Star Wars"—rebellion is almost inevitable. As for which countries might be heading down this path, I leave it to the readers to judge.

So what is the other side? What does not provide "protected security," but prioritizes individual sovereignty and independence? What is dedicated to transcending borders and utterly ignoring closed financial systems? What perceives "insecurity" as a characteristic rather than a defect? I’m glad you asked this question—the word you are looking for is: crypto.

A Few Paths Ahead

I have been in this "industry" for nearly nine years. I do not remember feeling such a strong sense of loss or lack of something to look forward to.

On the surface, we seem to have gotten most of the things we wanted: "institutional adoption," technology is truly being used. But something has been lost—not just in prices, but in its "soul," concerning the question of "what exactly are we doing?" Meanwhile, the world around us is advancing, and cooler kids (AI) have appeared in the neighborhood. We are utterly lost.

Of course, not everyone feels this way. Some people see the rise of stablecoins as a victory. Some are celebrating (what I consider to be very hasty celebrations) the decentralized perpetual exchanges winning against the "dinosaurs" of TradFi and CeFi. Others are exploring building their own empires at the intersection of DeFi and TradFi. We see the "enterprise chains" rising again, and corporate blockchain is becoming "great" again.

Yes, some people are excited, but I am not among them—though Wintermute can benefit immensely from this fusion.

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

Path One: TradFi absorbs crypto. Widespread adoption of stablecoins. KYC-compliant enterprise chains. KYC-compliant "decentralized exchanges." The financial machine operates more efficiently, with fewer intermediaries. Bitcoin is digital gold, mostly owned by sovereign governments, corporate balance sheets, and ETFs. Or perhaps CBDCs are globally adopted, achieving complete control over our (financial) privacy. The technology operates flawlessly, but isn’t it obvious—we have lost? Probability: highest

Path Two: Governments surrender to blockchain, everything runs on permissionless ledgers, completely disregarding KYC/AML regimes. Crypto is only taxed when converting to fiat. Token valuations reach trillions. This is a free, glorious world. It is also a very illusory world. We have won (but this is a dream). Probability: lowest

Path Three: Uncomfortable coexistence. We build something that operates in parallel to the existing system, completely independent of it. You can personally exist in both worlds, and the government cannot touch it because it is inherently closed. We have won and won beautifully. Probability: entirely dependent on us

I hope I have conveyed a feeling: Path One holds no appeal for me. It merely makes the existing machine (whichever of the three Leviathans ultimately prevails) operate more efficiently.

I know some people believe that Path Two is possible, but that is a daydream. Governments will not surrender sovereignty, just as corporations will not willingly give up monopoly status. The casino will not operate uninterrupted on Solana. The CFTC will not allow Hyperliquid to operate unchecked without KYC (even if current regulators do, the next ones won’t). Do I need to remind you that any centralized stablecoin issuer can freeze your tokens at the direction of a court? The only scenario where this path could potentially be realized is widespread socioeconomic collapse—and as a father of three and an employer of over a hundred employees, this is not what I am looking forward to.

Thus, only Path Three remains. You can call it the metaverse, network states, DAOs, or cultural tribes. Their commonality lies in independent existence, often in conflict with the political and financial systems of "physical space."

Entering the Matrix

Our biggest problem is that many people have never truly internalized this lesson. Especially we Westerners; we have gradually become accustomed to progress, accustomed to everything becoming more convenient, yet we have never truly experienced the dark side of losing our sovereignty.

Ironically, our experience of that dark side between 2022 and 2024 has been the most profound—we have faced regulatory blows from the SEC and CFTC while nearly confronting a situation where centralized entities bought up most of the crypto industry (FTX/Alameda plus the VC complex). Yet we have learned entirely the wrong lesson. Rather than doubling down on freedom, we believed that placing the right people in the right positions would lead to victory.

Meanwhile, for years we have complained about the poor user experience in crypto, how inconvenient Bitcoin is as a medium of exchange (which is true, it really is inconvenient), endless hacks, and so on. What if we got it wrong from the start? What if this inconvenience is precisely the culture we need to embrace actively, the reasonable price of sovereign identity?

I am not saying we should view MetaMask as the pinnacle of innovation. I am not saying we should all engrave our seed phrases on metal cylinders. I am saying we should strive to develop user experiences for that 50% of truly sovereign individuals who need it—addressing those from developing countries who are facing the erosion of democracy, total government control, and those in developed countries where life is becoming increasingly reminiscent of China and Russia, enacting all sorts of stupid privacy-invading laws (yes, I mean you, Europe and the UK).

Our goal should not be to fight against "regulation" or "government." Our struggle should be to create something fundamentally unmanageable. This means not relying on any single point: fiat entry/exit channels, app stores, DNS hosting, centralized orderers, social media platforms, and of course, centralized stablecoins (which can be frozen).

No matter what we build, it should not be easily shut down by a court order or the press of a button by some corporate bureaucrat. The tax authorities should not be watching our tokens that do not comply with MiCA (at least not before we exchange them). The ultimate goal is simple—we should create a system in which ordinary people can exist without needing to ask anyone for permission.

Specifically, this means:

Embrace permissionless sovereign protocols, reject black-box off-chain solutions.

DAOs are the right direction—I am indeed talking about those "unsuccessful" DAOs, those without centralized entities actually controlling them, fooling people with a pretense of governance. We have never really built suitable communities; rather, we have focused our energy on how to incentivize "comment spam."

Learn to either not rely on centralized tech stacks or be able to dynamically switch tech stacks when some external switch is flipped. This applies to infrastructure (cloud services, large language models), social coordination mechanisms, and of course, stablecoins (which I will elaborate on next).

Make algorithmic stablecoins great again. Our mistake was being too entrenched in Ponzi structures. DAI and UST themselves are not the wrong path—the mistake was including USDC as collateral for DAI and assigning completely unsustainable yields to UST. DAI cannot scale to the size of Tether solely with ETH backing, which is perfectly reasonable—we need to first establish a parallel economy, an endeavor we have never truly attempted. A better choice would be to trade directly using cryptocurrencies among ourselves, though I believe this will be realized at a later stage.

Privacy tools are essential.

Dispersal

"God Emperor" ends with "dispersal"—after the fall of the God Emperor, humanity scatters into the void. After 2022, at the moment we are supposed to learn our lessons, we should have our own "dispersal," but it is not too late now.

We do not always get to choose what part of the world we inhabit today. Some of us are trapped in countries with almost no way out, while others are bound by self-imposed responsibilities. My rather pessimistic prediction is: in the coming years, we will have more and more reasons to want to escape. Leviathan will continue to grow, conquer, and oppress. Even if a parallel crypto world truly exists, it is currently impossible to escape into it completely. But we can at least begin to (re)build exit 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 in vogue (which is inevitable), something will still operate amidst the indifference of the outside world. But more importantly, it 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 fine. Those who stay will build exits, perhaps (and only perhaps) recovering what we have lost.