Cyberpunk Overpowers Crypto Punk! Wintermute: Bitcoin Has Lost Its Original Purpose, Stablecoins Are a Fake Revolution

Wintermute founder Gaevoy criticized the crypto market for deviating from its original intentions, saying that Bitcoin lost its price chase and cyberpunk (institutional control) overwhelmed cypherpunk (privacy freedom). Stablecoins are just intermediaries replacing non-real changes, and the DEX risk engine limits scale. He praised Ethereum founder Vitalik for sticking to his original intentions and calling himself a cynic with hope.

Bitcoin loses its raison d’être, cyberpunk overwhelms cypherpunk

Gaevoy bluntly stated that Bitcoin’s raison d’être has been completely lost in chasing price increases, symbolizing the cyberpunk culture controlled by corporations and institutions, and has overwhelmed the cypherpunk spirit that emphasizes privacy and freedom. He lamented that institutional entry has changed the ecosystem and believes that Ethereum founder Vitalik Buterin is currently the only opinion leader (KOL) who still adheres to his original intention.

This critique touches on the philosophical dilemma at the core of cryptocurrencies. The cypherpunk movement was born in the 1990s with the core idea of using encryption technology to protect individual privacy and freedom, and to resist government and corporate surveillance. The birth of Bitcoin is a product of this movement, and Satoshi Nakamoto’s embedding in the genesis block “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks” clearly expresses his distrust of the centralized financial system.

However, today’s Bitcoin has become part of institutional portfolios, trading targets on Wall Street, and strategic reserves for governments. The launch of ETFs, large-scale corporate holdings, and the establishment of regulatory frameworks, while driving up prices and market recognition, have also made Bitcoin more and more like traditional financial assets. When Bitcoin’s main narrative changed from “free money” to “digital gold” and “inflation hedge”, it has deviated from the original intention of cypherpunk to some extent.

The difference between cyberpunk and cypherpunk is the attitude towards the relationship between technology and power. Cypherpunk believes that technology should empower individuals, protect privacy, and fight against centralized power. Cyberpunk depicts a dystopian future where technology is controlled by corporations and governments, and individuals are reduced to data commodities. Gaevoy believes that the current crypto market is closer to the latter: technology exists, but the power structure has not changed and may even become more consolidated.

Cypherpunk vs Cyberpunk values are opposed

Cypherpunk: Privacy first, decentralization, confrontation against power, technology empowering individuals

Cyberpunk: Enterprise control, institutional leadership, regulatory friendliness, technical service capital

Vitalik is called the only KOL by Gaevoy who sticks to his original intention, which is extremely high. Vitalik’s recent criticism of DeFi, his insistence on decentralized stablecoins, and his push for the solidification of the Ethereum protocol all show that he is still working for the ideals of cypherpuncture. In contrast, most KOLs and project teams pay more attention to token prices, financing scale, and institutional cooperation, with idealism giving way to pragmatism.

Stablecoins are just niche wins for intermediary replacement

Regarding the development of stablecoins, Gaevoy believes that this is just a victory for the niche market and does not change the operational nature of the financial system from a broader perspective. The current situation of stablecoins is only to replace the original set of centralized intermediaries with another set of smaller and more efficient centralized intermediaries, and has not achieved true decentralization change.

This criticism hits the weaknesses of the stablecoin industry. Although USDT and USDC circulate on the blockchain, their value is entirely dependent on the fiat currency reserves held by centralized companies such as Tether and Circle. When users use stablecoins, they still trust a centralized entity, but they have changed from trusting banks to trusting stablecoin issuers. If Circle goes bankrupt or is frozen by the government, USDC holders will face losses, which is essentially the same risk that depositors face when a bank fails.

From a financial system perspective, stablecoins do offer some improvements: 24/7 transfers, faster cross-border payments, and lower fees. But these improvements are efficiency, not structural. Financial power remains concentrated in the hands of a few issuers, and governments can still control stablecoins by regulating these companies. Gaevoy’s argument is that if our goal is to build a financial system that is not controlled by centralization, stablecoins do not bring us closer to that goal.

In contrast, truly decentralized stablecoins (such as DAI and RAI) have a very small market share and are far inferior to centralized stablecoins in terms of user experience and capital efficiency. This reality makes the decentralized vision of stablecoins seem more like an unattainable ideal. The market votes with its feet, choosing convenience and efficiency over pure decentralization.

The DEX risk engine has become a large-scale dead end

In response to the issue of on-chain scaling, Gaevoy believes that projects currently built on blockchain cannot scale effectively, especially Perp Exchanges. He expressed strong doubts about whether these exchanges can reach the size of the Chicago Mercantile Exchange (CME), pointing out that the risk engine is the ultimate expansion bottleneck, not the number of transactions per second (TPS).

He further explained that CME’s risk engine is actually scaled by spreading risk through prime brokers (Prime Brokers), only managing the solvency of brokers. Current on-chain protocols like Hyperliquid must constantly struggle between liquidation mechanisms, automatic dwindling (ADL), and depleting insurance funds, limiting the possibility of scale.

This technical criticism is very professional. Most people discuss the scaling of DEXs and focus on performance metrics such as TPS, latency, and gas fees, but Gaevoy pointed out that the real bottleneck lies in risk management. CME clears trillions of dollars in derivatives every day, and at the heart of its risk engine is to shift the risk of retail traders to prime brokers, who in turn hedge to the broader market. This layered risk diversification mechanism is the result of decades of evolution in traditional finance.

On-chain DEXs like Hyperliquid lack this layered structure. All traders bet directly on-chain, and when the market fluctuates violently, liquidation and ADL (automatic deleveraging) mechanisms may not be able to handle all liquidation positions in a timely manner, leading to depletion of the insurance fund or systemic risks. This structural flaw makes it difficult for on-chain DEXs to carry institutional-grade transaction scale. Gaevoy, as a professional market maker, has a far better understanding of risk management than the average observer, a criticism worthy of deep consideration by the industry.

Regarding the public chain debate, Gaevoy believes that the current community is keen to debate which is better and who is inferior on Solana, Ethereum, or other blockchains, but it is actually meaningless. Because on these public chains, there are currently no applications of great significance. In this competition, neither obvious results were produced, naturally no one really won the game, and no one really lost the game yet.

A cynic with hope

Despite many criticisms of the current situation, Gaevoy emphasized that he remains optimistic about the industry as a whole. He calls himself a wishful cynic, believing that the market has finally moved out of the irrational boom phase of simply hoping for political gains (such as the Trump effect). As speculative tourists are eliminated by the market, what will ultimately remain are builders who truly believe in the crypto mission.

This “critical optimistic” stance is not common in the crypto industry. Most people are either unconditionally bullish believers or skeptics who sing about the overall short. Gaevoy exhibits a third attitude: acknowledging current issues and deviations, but still believing in long-term potential. This stance may be closer to reality, as it neither avoids problems nor gives up hope.

The self-positioning of “cynics with hope” is extremely accurate. Cynicism is because they see the dirt and compromise of reality clearly, and hope is because they still believe that ideals are worth pursuing. Gaevoy believes that the current market downturn could be a necessary purge, weeding out speculators and projects that come only for short-term gains, ultimately leaving behind builders with genuine conviction. This Darwinian market evolution may allow the crypto industry to regain its direction after experiencing pain.

Looking at the industry cycle, Gaevoy’s criticism could signal the beginning of a period of reflection. In a bull market, everyone is busy making money, and no one cares about ideas. In a bear market, when price is no longer the only concern, people have time to think about “what the hell are we doing”. This reflection, if it triggers a substantial directional adjustment, could lay a stronger foundation for the next cycle.

For crypto practitioners, Gaevoy’s criticism is a mirror. Are we striving for cypheroidpunk ideals, or have we become part of a cyberpunk dystopia? Are we developing products empowering users, or are we providing new control tools for institutions and businesses? There are no simple answers to these questions, but they are worth pondering for every practitioner.