Author: Castle Labs

Compiled by: Deep Tide TechFlow

Deep Tide Overview: U.S. SEC Commissioner Hester Peirce warned that the operation of some crypto Vault strategies may trigger regulatory red flags for investment advisors. This means that Vault managers may need to be licensed, grassroots strategists will be eliminated, but traditional financial institutions will accelerate their entry. The biggest change for investors is: are you entrusting your money to code or to people?

Are Vault Managers the Same as Fund Managers?

In the past year, Vault managers have seen significant growth in Assets Under Management (AUM). The chart below shows the AUM of various Morpho V2 managers, clearly illustrating this trend.

Chart: Historical AUM trend of various Vault managers in Morpho V2, experiencing significant growth over the past year. Source: Castle Labs (Data: Morpho)

One reason for this is that Vault management is, in essence, similar to fund managers in traditional finance. As institutions increasingly focus on on-chain finance and how to use their RWA, Vault management is the ideal vehicle.

However, Vault managers have been operating in an environment without clear regulation—until now. This is the typical developmental path for anything new in the crypto space, especially in asset management: new things emerge, grow enough to attract regulators’ attention, and ultimately such things have to comply with the law.

Such a situation has recently occurred. Hester Peirce warned that some crypto Vault strategies may raise regulatory issues typically targeted at portfolio managers or investment advisors, depending on how the yield activities are chosen and how assets are redistributed.

Chart: U.S. SEC Commissioner Hester Peirce warns that some crypto Vault strategies may trigger investment advisor regulations. Source: SEC

Industry participants have differing views:

Former ACI member Togbe believes that some managers’ policies and redistribution bots are still too opaque, especially when users cannot easily understand who is making decisions and when those decisions are made.

Adcv from Steakhouse argues that Vaults do not unilaterally set yields, and their mechanism is not simply "the manager chooses the yield and users follow."

KPK emphasizes their transparency on this issue, publishing target weights for each market and detailing underlying infrastructures (but not disclosing everything).

Tesseract agrees with the SEC's view. Their stance is that a Vault is not a singular entity: "One end is governed by immutable code with fixed rules; the other end involves people choosing strategies, reallocating capital, and setting risks. The more discretion the manager exercises, the more the Vault resembles portfolio management."

Matthew Graham from TokenLogic holds a similar view: If managers choose configurations and manage risks on behalf of users, it's difficult to avoid comparisons with investment management.

Regardless of whom you agree with, the arrival of regulation is positive, indicating that Vault managers will continually be embedded as alternatives to traditional investment vehicles.

Regulation can enhance the transparency of Vault managers, who have sometimes been accused of being too opaque.

Managers can do better in explaining and documenting the following aspects:

• Their configuration policies and who has the authority to change them
• What will happen under certain stress conditions
• Who ultimately is responsible for the Vault’s configuration
• What the underlying off-chain infrastructure in operation is
• Where off-chain dependencies and permissions reside

On the other hand, the barriers to obtaining licenses may be too burdensome for small managers, stifling grassroots Vault management.

However, we can expect more regulated traditional financial managers to operate compliant Vault positions on-chain.

That said, it is still too early to state what regulatory actions the SEC will take in this matter.

We see the Morpho team and other representatives in the Vault space meeting with the SEC following the release of this memo.

We expect the SEC to publish more specific documents in the coming months.

Looking at Data on Robinhood Chain

Robinhood Chain launched earlier this month and has already captured significant attention in the crypto space.

The initial positioning was around tokenized stocks, but in this month they have leaned more towards memecoins, with Vlad repeatedly posting about them, and several launchpads vying for attention—impressively even pairing memecoins with stock tokens inside an AMM.

This means that users wanting to trade memes actually start from ETH or USD, go through tokenized stocks, and ultimately enter memecoin trading.

The chain has already seen impressive growth and stability; data from Entropy shows that on-chain assets exceed $800 million, with stablecoin market cap close to $500 million. In terms of TVL, Morpho accounts for approximately $259.9 million, with Ethena at another $184.7 million, followed by Maple, Uniswap, and Spark.

Chart: Robinhood Chain’s on-chain assets exceed $800 million, stablecoin market cap near $500 million, with Morpho, Ethena, and others leading TVL. Source: Entropy

Daily fee income runs between approximately $150,000 to $350,000, with a gross margin of about 88-89%. The 7-day annualized revenue line is nearing $66 million, leading the 30-day line of about $41 million, indicating that activity is still accelerating rather than retreating.

Chart: Robinhood Chain’s daily fee income is approximately $150,000–$350,000, with the 7-day annualized revenue line approaching $66 million. Source: Castle Labs

As mentioned, memecoins dominate the daily activity on the chain, with memecoin trading pairs accounting for 65.9% of spot DEX trading volume, whereas ETH-USD accounts for 24.1%, and Robinhood’s stock tokens only account for 8.2%. This shift happened so quickly that Robinhood’s launchpad has now surpassed pumpfun and pumpswap (the pumpfun’s DEX) in trading volume.

Chart: Memecoin trading pairs account for 65.9% of Robinhood Chain’s spot DEX trading volume, far exceeding stock tokens. Source: Castle Labs

Among these Robinhood launchpads, pons currently account for around 75% of the total trading volume of launchpad tokens on the chain, with total revenues exceeding $2 million so far.

Chart: Launchpad pons have accounted for approximately 75% of the total trading volume of launchpad tokens on Robinhood Chain. Source: Castle Labs

The stock segment is also growing, with the total tokenized value surpassing $25 million yesterday, and rwa.xyz reports nearly 330,000 RWA holders among 97 assets.

Chart: Robinhood Chain's total tokenized stock value surpasses $25 million, with nearly 330,000 RWA holders. Source: rwa.xyz

Overall, Robinhood is experiencing strong early growth and can be seen as a consumer trading venue rather than just a pure RWA project.

While stock tokens and their underlying representations lend legitimacy to the chain, it is currently the memecoins and launchpads that have given it user speed. By cleverly pairing memecoins with stock tokens inside an AMM, they found a way to embed stock tokens into the high-volume memecoin trading category.

But can Robinhood Chain maintain these memecoin trading and launchpad volumes and capture a meaningful share from chains like Solana? Will the deployment of tokenized stocks continue to grow beyond the first wave of stock codes? To what extent will Robinhood integrate the chain and its assets into its main mobile trading application?

Are NFTs Back?

You encounter a guy on the street, and he says: "NFTs are not dead!!!"

You look at him with pity, toss him $5, and go home.

Then you open X and discover a new NFT gacha protocol on the Ethereum mainnet.

TokenWorks has launched Fake World Assets, and the core of this protocol resembles some gacha mechanisms:

Chart: Fake World Assets (FWA) gacha mechanism illustration—users deposit NFTs and randomly win after payment. Source: TokenWorks

• NFT owners deposit NFTs into a pool, with corresponding ETH backing
• Buyers pay a specific price for each NFT pool; each attempt has a random chance of winning that NFT

Users who win NFTs can choose how to receive payment. This is some interesting data about the outcomes, with some bias because the FWA token is in an extreme and early stage this week, explaining why users opted for FWA payments in most cases.

Chart: Distribution of FWA user payment choices, leaning towards FWA payments in the early stages. Source: Castle Labs

In just 7 days, this protocol now accounts for 10% of gas consumption on the Ethereum mainnet. These statistics can better illustrate the activity situation:

Chart: The FWA protocol accounts for 10% of gas consumption on the Ethereum mainnet. Source: Castle Labs

It is still too early to say whether this is a short-term burst or a sustainable dynamic.

Chart: Overview of activity data for the FWA protocol after 7 days of launch. Source: Castle Labs

The trend of daily participants remains healthy, showing less inflation than trading volume, indicating fewer hardcore users doing a lot of rotations, and more casual users doing less rotation.

Chart: FWA daily participant trend is robust, with the proportion of casual users increasing. Source: Castle Labs

While gambling is not the only hope for doing new things right now, in this case, it shows how a simple consumer-facing protocol can revitalize and attract interest through gacha dynamics.

More builders should take this as an inspiring example and an opportunity to build something that people want to use.

Not another L1, L2, or even prediction market application.

This week, two veteran CEX representatives shut down: BitMEX, one of the OG CEXs, and BitMart.

What does this indicate? Firstly, the competition in the CEX business is exceptionally fierce, dominated by just a few incumbents. Depending on the geographic region, this is often a duopoly or complete monopoly.

Additionally, regulation (such as MiCa in Europe) and competition from on-chain trading venues like Hyperliquid, Lighter, and Variational, have led to a comprehensive loss of users and trading volume.

DEX/CEX spot trading volume reached 24.3% in July, setting a historical high, up from 17.9% in June and 18% to 21% for most of 2026.

Chart: DEX/CEX spot trading volume reached 24.3% in July, setting a historical high. Source: The Block

The power of exchanges is concentrating toward the top, while the next growth or innovation layer is shifting on-chain. DEXs may eventually follow the same path, with spot dominated by Robinhood/Uniswap, and perpetual contracts led by Hyperliquid, as a few application layer distributors decide the flow direction.

In the next cycle, we can anticipate fewer CEXs consolidating, with more traffic controlled by trading venues and front-end controls that own distribution rights.

However, an important point to note about the recent closure events is that they were conducted in an orderly manner without affecting user funds, indicating that the entire industry is maturing and perhaps repairing itself.

Mantle’s Third Anniversary and Q2 Review

Mantle celebrated its third anniversary last week.

Chart: Mantle celebrates its third anniversary, positioned as a full-stack distribution layer for tokenized RWA. Source: Nansen

The network originally was a DAO aimed at supporting the growth of open finance and developing a decentralized tokenized economy; recently it has focused on DeFi, yield products, and institutional RWA infrastructure.

Nansen recently defined Mantle's Q2 theme as a full-stack distribution layer for tokenizing real-world assets. By the end of the quarter, it had 155 tokenized stocks, over $1 billion in DeFi TVL, and a stablecoin market cap of $955 million.

Real-time data from RWA.xyz now shows about $120 million in tokenized active strategies on Mantle. We emphasize active strategies because they more clearly reflect the capital actually put into operation through managers, products, and platforms, rather than passive tokenized exposures placed on-chain.

The application layer is also developing in this direction, particularly around the trading infrastructure built for RWA:

• Fluxion is Mantle's native spot liquidity for RWA-related assets, utilizing AMM pools and concentrated liquidity, designed around the xStock/USDC market and other asset-supported trading pairs.
• xChange is an atomic RFQ routing for xStocks, providing direct quotes from issuers for minting and redeeming xStocks to participating entities, settling in a single on-chain transaction or not at all.

It is becoming increasingly clear that Mantle is not only trying to host tokenized assets on its chain but also building the necessary liquidity and execution stack around those assets, as emphasized by Nansen: the full-stack distribution layer for tokenizing real-world assets.