Regulatory Clarity Ignites DeFi: SEC's Staking Greenlight and Beyond

Happy Thursday, TM Family!

Welcome to the Token Metrics Research | Daily newsletter, where we cover key market movements, regulatory updates, and early alpha for our readers and investors. 

Let's dive in! 

Today's edition of Token Metrics Research | Daily Newsletter is brought to you by Pacaso.

The wealthiest companies tend to target the biggest markets. For example, NVIDIA skyrocketed nearly 200% higher in the last year with the $214B AI market’s tailwind.

That’s why investors are so excited about Pacaso.

Created by a former Zillow exec, Pacaso brings co-ownership to a $1.3 trillion real estate market. And by handing keys to 2,000+ happy homeowners, they’ve made $110M+ in gross profit to date. They even reserved the Nasdaq ticker PCSO.

No wonder the same VCs behind Uber, Venmo, and eBay also invested in Pacaso. And for just $2.90/share, you can join them as an early-stage Pacaso investor today.

Invest for $2.90/Share

_{Paid advertisement for Pacaso’s Regulation A offering. Read the offering circular at invest.pacaso.com. Reserving a ticker symbol is not a guarantee that the company will go public. Listing on the NASDAQ is subject to approvals.}

Now let's get back to the top stories of the day.

In a significant regulatory breakthrough, the U.S. Securities and Exchange Commission (SEC) has affirmed that properly structured liquid staking protocols and their associated receipt tokens do not qualify as securities under federal law. This staff statement from the SEC's Division of Corporation Finance addresses a long-standing gray area in decentralized finance (DeFi), where users stake assets like ETH for yields while retaining liquidity through derivative tokens.

The announcement triggered immediate market reactions, with Lido's governance token (LDO) rising about 9.23% to $1.01 and Rocket Pool's RPL surging 6.93% to $7.97. Despite these gains, total value locked (TVL) in liquid staking remained stable at around $71.56B, with Lido holding a dominant 47% share at $34.1B, per DeFiLlama. No major capital inflows were observed post-announcement, suggesting the market had partially priced in this clarity.

From an investor standpoint, this ruling reinforces these protocols' decentralized, non-custodial nature, emphasizing user ownership of staked assets. Legal experts hailed it as a "big win for stakers," potentially paving the way for liquid staking tokens to be included in exchange-traded funds (ETFs). For institutions, this could unlock billions in inflows by reducing compliance hurdles, especially as DeFi yields remain attractive amid global rate uncertainties.

However, the SEC's narrow guidance focuses on "properly structured" protocols, so projects must ensure transparency and decentralization to avoid scrutiny. This development underscores DeFi's maturation, but investors should watch for any appeals or enforcement actions that might test these boundaries.

Bitcoin's market behavior is shifting toward maturity, with implied volatility plummeting to levels unseen since October 2023. The 30-day implied volatility, tracked by Volmex's BVIV index, has dipped to an annualized 36.5%, even as BTC hovers steadily between $110,000 and $120,000. This decoupling of volatility from price, historically correlated, mirrors traditional markets like the S&P 500 during bull runs, driven by structured products and options strategies that involve selling out-of-the-money calls.

Compounding this stability is a political tailwind: President Trump is reportedly set to issue an executive order greenlighting cryptocurrency investments in 401(k) retirement plans, alongside private equity and real estate. This directive would instruct the Department of Labor to relax fiduciary rules, addressing past concerns over oversight and data gaps in crypto allocations. The news sparked a quick BTC rally from $114,900 to $115,670, with derivatives markets showing spikes in open interest and trading volume.

For crypto-native investors, low volatility implies reduced hedging costs but fewer short-term trading opportunities; think of it as BTC evolving into a "store of value" akin to gold in a diversified portfolio. Trump's push could catalyze mainstream adoption, potentially injecting trillions from retirement funds into digital assets. Yet, risks remain: economic data signaling stagflation could reintroduce volatility, and regulatory pushback from labor advocates might delay implementation.

Solana's mobile ambitions are advancing with the launch of the Seeker phone, a $500 device tailored for crypto users. Weighing in as notably lightweight, it boasts solid battery life, a decent display, and a Mediatek Dimensity 7300 chip that handles everyday tasks without lag. However, it can run hot under heavy load. The camera is functional but not stand out, positioning Seeker as a practical secondary device rather than a flagship competitor.

Key to its appeal is deep Solana integration: a built-in "seed vault" for secure wallet key storage, a fingerprint-protected native wallet, and an expanded dApp Store with over 100 apps, including exclusives like Moonwalk. It also features a stocks tab for tokenized assets (xStocks) outside the U.S., and access to the Google Play Store.

While no immediate token airdrops are planned, the forthcoming SKR token could offer future incentives. Marketed to about 150,000 buyers, Seeker improves on its predecessor by focusing on portability and ecosystem utility. However, Solana Mobile's long-term hardware strategy remains uncertain, potentially shifting toward broader device onboarding.

In parallel, Phantom, the top Solana wallet, has acquired Solsniper, a high-speed trading and analytics platform specializing in memecoins and NFTs. Founded in 2021, Solsniper brings real-time token tracking, whale wallet monitoring, and precision trading tools to Phantom's ecosystem, marking its fourth acquisition in 16 months. Following Solsniper's pivot from NFTs due to market slowdowns, this move aims to transform Phantom into a "consumer finance superapp" with AI-driven features.

For investors, these developments signal Solana's push for user-friendly on-chain experiences amid competition from Ethereum L2s. The Seeker could drive adoption in mobile DeFi, while Phantom's expansion enhances trading efficiency, potentially boosting SOL's utility and price. We see upside in Solana-native tokens, but caution on hardware risks like supply chain issues. This duo strengthens Solana's narrative as a high-throughput chain for real-world applications.

Ethereum shattered its daily transaction record, logging 1.74 million on August 5, topping the 1.65 million peak from May 2021. July also set a monthly high with 46.67 million transactions, while active addresses hit 683,520, nearing 2021 levels. This boom stems from Ethereum's gas limit increase to 45 million, bolstering scalability, alongside DeFi growth fueled by stablecoins, yield farming, and corporate ETH treasuries.

Contributing factors include point farming, institutional accumulation (public companies hold over $7.5 billion in ETH), and regulatory optimism in the U.S. However, layer-2 networks like Base are facing growing pains; a recent 29-minute outage halted block production due to an automated system glitch, highlighting scalability challenges amid rising activity from apps like Base Pay. DeFi protocols weathered it well, with no bad debt, underscoring the need for robust infrastructure.

Investor implications: This activity surge validates Ethereum's post-Merge upgrades and positions it as a yield hub, especially if staking ETFs gain approval, potentially turning ETH into an institutional staple. Price has lagged, trading cautiously, but sustained on-chain metrics could drive upside.

Keeping up with AI is hard – we get it!

That’s why over 1M professionals read Superhuman AI to stay ahead.

Sign up and start mastering AI