Yes, you are absolutely correct in your decision to resign.
It's - if I'm being honest here - painfully clear you are much more interested in your side project (from the prospective of UW) than your ostensible job.
I think for your sake and theirs' you should resign and try to commercialize this, or you will fail at both. Either that or completely hand off or abandon the project.
It's not inherently a side project, it only has to be one because his department doesn't view this work as a contribution to pure mathematics. Seems shortsighted for a field where progress is often measured in centuries.
It's - if I'm being honest here - painfully clear you are much more interested in your side project (from the prospective of UW) than your ostensible job.
I think for your sake and theirs' you should resign and try to commercialize this, or you will fail at both. Either that or completely hand off or abandon the project.