“Crypto Has Lost Its Way”: Gavin Wood speaks on Governance, Greed, and Rebuilding the Blockchain Ethos

Gavin Wood, the co-founder of Ethereum and founder of Polkadot, sat down with me on the 124th episode of When Shift Happens to unpack why he believes crypto has fundamentally failed its original mission. 

Through a long and honest conversation, Gavin diagnoses the problems plaguing the blockchain industry and offers a philosophical and technical reimagining of what it could become.

The episode is almost like a manifesto. From Ethereum’s controversial Layer 2 design to the dysfunction of blockchain governance, from the illusion of free societies to the rise of meme coins and financial escapism, Gavin explores what went wrong, how we got here, and what could come next.

“I Stopped Trusting Systems”

Early in the conversation, Gavin traces the roots of his disillusionment with broader systems of governance and power. “We’re not free,” he says plainly, describing modern society as an illusion of autonomy propped up by invisible gatekeepers, regulations, and traditional institutions. He describes our ‘neutral’ world as a tightly controlled sandbox. 

His diagnosis? The current social contract is broken, and not just in Web3. His response was to build: to create tools that offer actual sovereignty. But even in the crypto world, things didn’t go to plan.

Stablecoins, Banks, and the Illusion of Progress

One of the early wake-up calls for Gavin was how quickly crypto reinvented traditional institutions under a new name. Stablecoins, he notes, are too similar to digital banks: custodial, opaque, and dependent on regulations.

This critique sets the stage for his broader point: that Web3 has often traded its ideals for convenience, familiarity, and short-term gains.

Ethereum’s Layer 2 Mistake and the JAM Response

For Gavin, Ethereum’s pivot toward Layer 2 solutions was a betrayal of its founding ideals. "It was a mistake." The reliance on L2s, he says, represents a dangerous power grab that undermines decentralisation by consolidating control in fragmented silos with weak trust assumptions.

Instead, Gavin introduces Join-Accumulate Machine (JAM), a new vision for a “magic internet supercomputer.” JAM is Polkadot’s next evolution, a response to Ethereum’s shortcomings. What sets JAM apart is its multi-core elastic scaling architecture. Instead of fragmenting trust across rollups or external execution environments, JAM allows for many parallel “cores” to operate in synchrony within  the same trust model. Each core can process its own workloads, like a  modern multi-core CPU, and the system dynamically allocates resources based on demand.

We Can’t Remove Greed

One of the episode’s central themes is the challenge of aligning human incentives with the ethos of crypto. Gavin argues that we can’t remove greed, but we can design systems where personal gain aligns with the collective good.

He explores how DAOs can become better models of governance, but only if they’re rooted in shared fate, meaningful transparency, and actual utility. He’s particularly critical of shallow tokenomics and flashy launches that serve only early investors and speculators. 

Polkadot’s Mixed Governance and the Limits of Leadership

When I pushed Gavin to explain Polkadot’s journey, from the successes, to the challenges, Gavin admits the governance system has had “mixed results,” with transparency and communication often falling short. Yet he remains committed to experimenting with better models.

He also speaks frankly about stepping down from the CEO role: “I suck at management, I hate managing people.” Instead, he has shifted toward a more architectural / conceptual role, trying to define what “good” looks like for Polkadot, and for crypto at large.

The Cultural Decay of Crypto: From Cypherpunk to Casino

Perhaps the most striking part of the conversation is Gavin’s harsh critique of the current crypto culture. What began as a movement for freedom and trustless systems, he says, has devolved into a meme-driven casino, full of "fart coins" and “financial escapism.”

He worries that the space now rewards charisma over engineering, and hype over utility. But rather than abandon ship, he sees an opportunity to rebuild. To use the tools we’ve created to re-centre around values like transparency, curiosity, and decentralisation.

On Bitcoin, Digital Gold, and the Best Tech Losing

While Gavin is no Bitcoin maximalist, he sees value in Bitcoin as a decentralised store of value. But he’s also realistic about its limitations, particularly in governance and adaptability.

He warns that better technology doesn’t always win. History shows that convenience, inertia, and marketing often prevail. “Sometimes the best tech doesn’t win — but the tech that solves the most relatable problems does.”

Rebuilding Crypto’s Ethos

As our talk came to a close, Gavin returned to JAM, a project that synthesises years of learning from Ethereum, Polkadot, and other chains. He sees it as a chance to get things right from the ground up without compromising on trust.

Gavin’s belief is in crypto as a philosophical project, not merely a financial one. He talks about more than replacing money, but also building better systems to live and govern ourselves. He states firmly that Crypto has an ethical problem as opposed to a technical one. 

And that, for Gavin, is the heart of the problem: “We forgot why we were building,” he says.

Still, the episode closes on a note of quiet optimism. If the space can let go of hype, embrace complexity, and return to curiosity, there’s still a path forward.

👉If you enjoyed reading the summary, head over to When Shift Happens on YouTube or your favorite podcast platform to access the full convo.