Original title: Golden Path (p1)
Original author: Evgeny Gaevoy, founder of Wintermute
Original translation: AididiaoJP, Foresight News
I've been pondering this article for a long time. My views on whether cypherpunks can succeed, whether libertarianism can succeed, and whether cryptocurrencies can really work have changed back and forth.
The following are my recent thoughts on the philosophical position of cryptocurrencies. This is more like a manifesto, discussing 'why we are really here.'
The Golden Path
For a long time, (Dune) has been one of my top three books. This may have changed in recent years (for example, the (Culture) series now ranks higher), but it remains special to me, as it shaped my thoughts around the age of twenty.
People generally pay attention to the first three books of this series, but for me, it’s the fourth book (God Emperor of Dune) that has lingered in my mind and has genuinely influenced my views on the value of progress and diversity, as well as questions like 'what the world should look like.' The core idea of this series up to that point is that if humanity wants to survive, the only way is to diversify. 'The Golden Path' is a millennium-spanning plan to forcibly shackle humanity with stability, and when that shackle disappears, humanity will inherently hate such stability and any form of centralization.
‘Give humanity a lesson etched in bone: protected comfort is no different from complete death, regardless of how long it can be dragged out.’
We are inherently drawn to stability, to organize things to combat chaos and disorder. We are inherently inclined to build empires, whether they are nations or corporations. We also know that all empires will fall, and all businesses will die, but we still keep building, bigger and stronger each time. Yet the larger we build, the more catastrophic the collapse will be. Even worse, this ultimate imperial construction might drag all of humanity into extinction, either due to its excessive centralization unable to withstand external shocks or because of internal 'evolution' that gives up the existence as a society. Thus history repeats itself: from chaos to self-organization, to empire, and then to collapse. What I learned most importantly from 'The Golden Path' is that during the integration phase, we should embrace diversity and reject empires, no matter how tempting the stability (and promised prosperity) they offer.
In today's countries, there is too much 'protected comfort.' In today's corporations/financial machines, there is also too much 'protected comfort.' I believe both are slowly pushing us toward an unavoidable collapse. To be clear, this is not against capitalism or progress. Quite the opposite; capitalism within this system is diminishing, and what’s more prevalent is poor, unambitious nationalism. In summary, the great monsters that might emerge in the future are several:
· Anarcho-capitalism: Businesses win, governments lose. Whether it's the world of Tessier-Ashpool, CosaNostra Pizza Inc, or Weyland-Yutani, everyone else has a hard time except for the big gears in the machine.
· Nationalism: Nation-states control everything, dividing the world. In the end, it leads to something like (1984), or maybe a little better, it's hard to say.
· Fascism: Corporations and governments collude together. This is the Galactic Empire in (Star Wars) — rebellion is almost inevitable. Which countries might go down this path?
So what is on the other side? What does not offer you 'protected comfort,' but instead forces you to treat personal sovereignty and independence as a top priority? What strives to leap beyond national borders, completely disregarding those 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 9 years, and I've never felt the atmosphere to be so bewildering; it feels like there's nothing worth looking forward to. On the surface, it seems like we’ve gotten most of what we wanted: 'institutions have entered' and the technology is being used by some. But it always feels like something is missing; it's not just about the price; it's about the 'soul' being lost, the feeling of 'what are we even doing' has vanished. Moreover, the outside world keeps moving forward, and now there's a new, hotter thing (artificial intelligence). We are completely lost.
Of course, not everyone feels this way. Some believe that once stablecoins take off, it’s a victory. Some celebrate that decentralized perpetual contract trading platforms have defeated traditional finance and those 'old relics' of centralized finance. Others want to build their own empires at the intersection of DeFi and traditional finance. We have seen 'enterprise chains' emerging again, and enterprise blockchain being 'great' again. So yes, some are quite excited, but I'm not, even though Wintermute could make quite a bit by integrating with traditional finance.
I'm not excited because I see several different paths ahead, with only one that is both feasible and worthwhile:
Traditional finance swallows cryptocurrencies. Stablecoins become mainstream, with KYC-compliant enterprise chains and KYC-compliant 'decentralized exchanges.' Financial machines have sped up, with fewer intermediaries. Bitcoin becomes digital gold, mostly held in the treasuries of sovereign governments, corporate vaults, and ETFs. Or perhaps the whole world uses CBDCs, with our (financial) privacy completely controlled. The technology is indeed impressive, but we have lost thoroughly; isn't that obvious? Probability: maximum
Governments surrender to blockchain, everything runs on permissionless ledgers, and KYC/AML regimes play on the side. Only when converting to fiat do we pay taxes on cryptocurrencies, with token market values in the trillions. A free, glorious world. It is also a purely imagined world; we won (but it’s just a dream). Probability: minimal
Uncomfortably coexisting. We build a system that is parallel and completely independent of the existing one. You can be on both sides; the government cannot touch it because it’s designed to be isolated. We won, and we won fairly. Probability: entirely depends on ourselves
I hope you feel it, I have no interest in solution 1 at all. It merely makes the existing machine (no matter which of the three monsters ultimately wins) run more smoothly.
I know some people think that solution 2 is possible, but that's just wishful thinking. Governments cannot give up sovereignty, just as corporations cannot voluntarily relinquish monopolies. Casinos cannot just pop up on Solana. The CFTC cannot ignore KYC or regulation for Hyperliquid. Do I need to remind you? Which centralized stablecoin issuer can’t freeze assets with a court order? For this to happen, the entire socio-economic system would have to collapse. I have three kids to raise and oversee over a hundred people; I don’t wish for that.
Then only solution 3 remains. You can call it the metaverse, network nation, DAO, or cultural tribe. Their commonality is independent existence, often conflicting with and even opposing the political and financial systems of the 'real world.'
Matrix
Our biggest problem is that many people have never truly 'learned this lesson to the bone.' Especially for those of us in Western countries, slowly getting accustomed to progress and convenience, we have never experienced what it's like to lack sovereignty. Ironically, between 2022 and 2024, we experienced it most vividly: on one hand, the aggressive regulation from the SEC and CFTC, and on the other hand, centralized institutions (FTX/Alameda + venture capital) nearly bought up half the cryptocurrency. And what did we learn? The lesson we learned was entirely the opposite. Instead of doubling down to fight for freedom, we felt that as long as the right people were placed in the right positions, we could win.
At the same time, we've complained for years about the poor user experience of cryptocurrencies, that Bitcoin isn't a convenient payment tool (which it's really not), and that there are endless hacks, etc. What if we were all wrong? What if these inconveniences are precisely the price we must pay for sovereignty and a culture we should actively embrace? I'm not saying we should consider MetaMask the pinnacle of innovation. Nor am I saying we must all engrave our seed phrases on metal plates. What I'm saying is that the user experience we should strive to optimize should not be aimed at the 50% of the world that doesn't need it, but rather at the 50% that truly needs sovereignty — whether it’s those in developing countries who see their democracy eroding and being completely controlled by the government, or those in developed countries that are increasingly resembling China and Russia, where anti-privacy laws are being enacted (like in Europe and the UK).
Our goal should not be to fight against 'regulation' or 'government.' Our goal should be to create something that they cannot control at all. The key is not to rely on points that can be choked: fiat currency entry and exit channels, app stores, DNS resolution, centralized sorters, social media platforms, and of course centralized stablecoins (which can be frozen at the flick of a switch). What we create cannot be shut down by a court subpoena or a bureaucrat flipping a switch. The tax authority should not be concerned with our non-compliant tokens (unless we exchange them for fiat). In the end, it comes down to one thing: we need to create a place where ordinary people can live without having to seek approval from anyone.
Specifically:
· Embrace permissionless, sovereign protocols, and avoid those black-box off-chain solutions.
· DAOs were right in principle; I’m specifically referring to those that never got operational, which are completely controlled by centralized entities and merely pretend to govern. We have never really built a decent community; we only thought about how to incentivize everyone to comment.
· Learn to either not rely on centralized solutions or immediately switch if any of them get choked. This includes infrastructure (cloud, large models), societal coordination tools, and of course stablecoins.
· Make algorithmic stablecoins great again; our mistake was being too obsessed with Ponzi models. The ideas behind DAI and UST were not wrong, but the mistake was adding USDC to DAI and piling on completely unsustainable yields to UST. DAI relying solely on ETH for support is normal; it can't match Tether's scale. We have yet to genuinely try building a parallel economy. Better yet — we can trade directly using cryptocurrencies among ourselves, though that step might still be a bit early.
· Must protect privacy. Any tool is fine, as long as it achieves that.
Discrete
(God Emperor of Dune) ends with 'discrete' — the God Emperor dies, and humanity scatters into the void. After 2022, we should have fragmented and remembered the lessons, but it’s not too late now.
We (and) cannot always choose which corner of the world we are in. Some are trapped in their countries with no way to leave; others are bound by the responsibilities they have taken on. My rather pessimistic prediction is that in the coming years, the reasons we want to escape will only increase. That great monster will grow larger, suppressing more and more. It’s impossible to completely escape into a 'better' parallel crypto world right now; even if it truly existed, it wouldn't be possible. But at least we can (re)start building something to give future generations a place 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 for escape. When one day cryptocurrencies aren't popular anymore (and they definitely will lose popularity), they should still be usable without outside influences. More importantly, they should allow what we do and build to have some meaning.
Most of us would still choose to coexist with empires. Because responsibility, comfort, money, or other pursuits can be understood, no problem. The remaining small group will create exits and retrieve what we lost.
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