The Wintermute CEO points out the switch niche in cryptocurrencies — what are the industry’s fundamental challenges

Evgeny Gaevoy, CEO of Wintermute, issues a serious warning about the structural challenges currently facing the cryptocurrency industry. According to reports from PANews, Gaevoy points out that a fundamental issue called “switch niche” is latent throughout the entire industry, and this problem exposes an intrinsic contradiction that goes beyond mere technical issues.

Competition Between Blockchains Conceals the Essence of Switch Niche

Gaevoy argues that the competition among public blockchains like Solana and Ethereum may seem fierce at first glance, but in reality, it holds little significance. The reason is that none of the existing chains have introduced groundbreaking applications that fundamentally transform the industry. The competition among multiple platforms is a typical example of a switch niche — that is, a competition based on minor differences when the basic functions are similar.

Limitations of Stablecoins and Switch Niche

The stablecoin market faces similar structural issues. Gaevoy describes the stablecoin industry as a “niche success,” stating that it does not fundamentally alter the industry. This is a typical application of the switch niche, ultimately just replacing one centralized intermediary with another. Because there is no fundamental change to the system’s core structure, it lacks the power to revolutionize the entire industry.

Scalability Issues and Contradictions in Token Economics Models

Concerns about blockchain application scalability remain unresolved. Especially due to constraints in risk engine design, emerging products like perpetual exchanges struggle to reach the scale of traditional finance. More seriously, the overall token economy models are on the brink of failure. Mechanisms such as buybacks, staking, and airdrops are facing increasing challenges, and to break free from the switch niche, it is necessary to restart experiments from the fundamental logic.

Loss of Industry Vision — Moving Away from Cyberpunk Spirit

Gaevoy’s greatest concern is that the industry has lost sight of its original vision. The primitive vision of Bitcoin has been overshadowed by the story of price appreciation, and the cyberpunk spirit that accompanied institutional investor entry has been overtaken by crypto-punk ideals. Except for a few ideological leaders like Vitalik Buterin, most industry participants focus on superficial discussions within the switch niche without addressing core issues. There is a structural problem where the entire industry emphasizes fine-tuning existing systems rather than pursuing genuine innovation.

Beyond Market Cycles — Toward an Era of Builders

While pointing out many of these challenges, Gaevoy maintains a cautiously optimistic outlook on the industry’s long-term development. He believes that the market is moving beyond the phase of blind enthusiasm driven by hype — the “Trump-led rally” stage — toward a more mature phase. The gradual exit of speculators from the market and the emergence of true builders creating a healthy development environment are opening the way. Gaevoy is watching closely for the era when the industry escapes the switch niche and genuine innovation becomes mainstream.