The mounting tensions and risk of nuclear war that plague the Korean Peninsula today are typically attributed to a combination of North Korea’s aggressive nuclear posture and doctrine and the U.S.-South Korea alliance’s proactive deterrence countermeasures. However, while these factors are proximate and important, they themselves stem from a deeper, fundamental cause. The longstanding division of the Korean Peninsula has trapped the two Koreas in an endless unification competition to outcompete and take over one another, which drives the arms race and confrontational military postures against each other. Advancing a “two-state system” that mitigates the unification competition may help promote peaceful coexistence between South and North Korea and reduce the risks of conventional and nuclear war on the peninsula.