The Castle Chronicle: Memecoins are Back, Exploring the "On-chain Robinhood"
PLUS: What you Need to Know about the $RESOLV airdrop
Welcome to Edition 120 of The Castle Chronicle!
We are seeing your support in the first editions here on Substack, so we want to thank you by sending out another edition covering projects and topics we have been exploring lately.
Here’s what we have for you today:
🔍 Market Watch - Price action & Relevant metrics across sectors and assets
🔬 Research Corner - Exploring Lighter, a new perp DEX with zero trading fees
🏛️ Fundamentals Corner - What you need to know about the $RESOLV airdrop
🏰 Castle Reads - All of Castle’s research you might have missed
📖 Recommended Reads - The best reads from the best researchers on CT
Great news! Castle Labs is an official Media Partner of ETHMilan 2025, the largest EVM-focused conference in Italy, taking place on June 24 in the city of Milan.
As partners, we have secured an exclusive 25% discount on tickets for the event for the Castle community. Get yours here!
I bet you want to explore one of the best cities in Italy and talk crypto with us, as well as with top degens and builders in the space, coming from many countries, including those outside Europe. See you there!
🔍 Market Watch
PRICE ACTION
Another very bullish week for $BTC! After the first impulse out of the accumulation range, I was looking for just a bit more confirmation to turn fully bullish, and that’s exactly what happened with the Thursday candle close. My expectation now is new all-time highs.
Here is what I expect for in the next weeks:
HTF re-accumulation (1W).
Breakout from accumulation range and confirmed re-accumulation (1D).
Expecting bullish continuation.
I want to be very clear that this does NOT mean mindlessly buying cryptocurrencies. It indicates we are in a favorable context for long positions, but we still need to identify strong bullish setups. If this indeed continues to new highs, there will be many opportunities along the way.
This week, I also want to take a deeper look at $ETH. I know many of us are hoping for $ETH to rise, bringing with it the momentum of an alt-season. But is that realistic? Let’s start by examining the weekly chart using the same zoom level as $BTC so we can make a proper comparison:
Never reached new ATHs in 2024.
Lots of chop.
Price below all down-sloping EMAs.
Just from a single look, it’s very clear to me that $ETH is much weaker compared to $BTC, and the current price action from a high timeframe perspective indicates bearishness across the board. Yes, we got a nice pump recently, but look where it brought us — we’re still below all the EMAs, and they are still sloping downward. This is by no means a bullish chart.
My expectation, therefore, is that this bullish push serves the purpose of re-distribution and will ultimately lead to bearish continuation. I will need to see significantly more bullish action to flip my bias. Chances are that $ETH will move upward along with $BTC, but it will likely lag behind as a relatively weaker asset. If this were an uncorrelated asset, my game plan would be to wait for the current LTF (low timeframe) trend to break down and then start following with shorts.
And of course, the analysis wouldn’t be complete without directly comparing these two assets, so let’s take a look at the ETH/BTC chart.
Okay, bye.
Sorry, $ETH bulls, I’m not seeing it.
TOP PERFORMERS AND NARRATIVE PERFORMANCE
With $BTC pumping once again, it's clear we’ll see some relatively stronger performers. Last week we saw minor pullbacks across the board as everything was taking a breather. This week we’re back in full bull mode, with DeFAI adding +87% and Memecoins adding +79%. These are HUGE numbers and they tell us a clear story: these are the most demanded narratives across the board and we SHOULD be paying attention to them.
Many of these meme coins are coming off a long-lasting bear market, so what we should look for is an accumulation phase that halts the preceding sell pressure, typically shown by sideways price action, followed by an impulse that breaks above all rising EMAs. Then we want to see a pause, or re-accumulation, with capital flowing back in. This confirms a re-accumulation and, with it, a new trend direction—just as $BRETT is showcasing on the 1D chart.
It’s great to see crypto performing well again. In the current context, I’ll be looking for ways to gain exposure, especially to DeFAI, AI Agents, and meme coins, as these seem to be the most in-demand and relatively stronger assets. Remember not to get too euphoric, and as always, risk responsibly. I’ll see you all next time!
Not following what I’m talking about? Check out my quick cheatsheet to understand how I approach a chart.
Courtesy of 0x_Vlad - trend-based trader and MentFX student
🔬 Research Corner: Why Lighter could be the “On-chain Robinhood”
In the last few weeks, we have been hearing quite a lot about Lighter, a new player in the perpetual space. Their points season, in particular, has been widely discussed, but I wanted to offer our readers a deeper understanding of how Lighter works, so let’s get started.
HOW LIGHTER WORKS
Built on Arbitrum, Lighter is a zk-rollup-powered order book exchange. It combines the performance of centralized exchanges with the trustless transparency of DeFi, offering sub-5ms latency, zero-slippage trades, and a verifiable matching engine.
It employs a hybrid model that processes order matching and execution off-chain, which enables its high throughput and low latency, while settling final trades on-chain. What sets Lighter apart, compared to platforms like Hyperliquid, is its zk-verifiable order book, which ensures provable fairness and resistance to manipulation.
Its liquidity structure is also quite interesting. Lighter operates as a pool-based perpetual futures exchange, meaning it relies on a liquidity pool to facilitate trades, similar to the GLP model used by GMX. However, it also integrates advanced market-making techniques to optimize pricing and liquidity provision.
The platform’s liquidity is primarily driven by its LLP (Lighter Liquidity Pool), which serves as the backbone for trading activities. The LLP contains a basket of assets such as BTC, ETH, and stablecoins. Unlike traditional AMM pools that require paired assets, such as ETH and USDC, Lighter allows single-asset contributions, simplifying the process for liquidity providers. When users trade perpetual futures or swap assets, the LLP pool acts as the counterparty, ensuring that liquidity is always available. This removes the need for traditional order books or direct buyer-seller matching.
Liquidity providers on Lighter earn LLP tokens representing their stake in the pool, entitling them to trading fees and potential rewards such as yield farming. Fees earned are proportional to their share of the pool. With a TVL of 75 million USD and a return on investment above 150 percent, it has been a significant success so far.
But the platform’s design suggests it may employ programmatic market-making strategies, similar to those used by institutional market makers like GSR or Cumberland, to optimize liquidity depth and minimize spreads. For example, Lighter’s ability to offer low swap fees and zero price impact trades indicates sophisticated liquidity management, potentially involving proprietary trading algorithms.
THE ON-CHAIN ROBINHOOD?
One of the unique features of Lighter is that it currently charges no transaction fees, with maker-taker fees (such as maker rebates and taker fees) planned to fund platform maintenance and governance. This fee-free model lowers barriers for traders, especially high-frequency ones. It is a significant draw for cost-conscious users, particularly when compared to platforms with fixed fee structures. Lighter may choose to follow the path of Robinhood (the famous stocks and crypto trading app) and sell its customer order flow to large institutions to fund itself in the future.
Let’s compare it to its peers:
Hyperliquid has low fees of 0.015 percent for makers and 0.045 percent for takers, which can be reduced depending on the amount of $HYPE token the user is staking.
Ostium charges fixed percentage-based fees ranging from 2 to 10 basis points (0.02 percent to 0.10 percent), depending on the asset, leverage, and whether the trade increases or decreases open interest (OI) imbalance. Trades that reduce OI imbalance, typically with low leverage between 1x and 20x, may qualify for lower maker fees, while high-leverage or skew-increasing trades incur higher taker fees.
In addition, Ostium charges a flat oracle fee of $0.50 per trade to cover price fetching and order costs.
CREATE NEW MARKETS PERMISSIONLESSLY
Another unique feature of Lighter is that any user can propose a new trading pair, such as a perpetual futures contract for a specific token against USDC or ETH. This process is permissionless, meaning it does not require approval from a centralized authority or a governance vote.
To enable a new market, the proposer may need to integrate a reliable price feed for the asset, likely via Chainlink oracles, which Lighter uses for accurate, exchange-aligned pricing. Once integrated, the trading pair can be deployed in a matter of hours or days thanks to Lighter’s scalable zk-rollup architecture. Unlike platforms requiring DAO votes or token-based governance like Hyperliquid’s planned staking model, Lighter’s permissionless approach removes bureaucratic hurdles. This aligns with DeFi’s ethos of openness and minimizes gatekeeping by core teams or large token holders. As a result, developers and projects can create markets for their tokens, boosting visibility and liquidity, and incentivizing new DeFi protocols to integrate with Lighter, driving ecosystem growth. Additionally, new markets benefit from universal liquidity via the LLP pool, without needing individual liquidity provisioning.
Lighter’s main risk is its reliance on Chainlink oracles. If Chainlink becomes unavailable or poorly maintained, markets may face manipulation or mispricing, affecting traders and the LLP pool. However, since Chainlink is a major player in crypto and lots of protocols depend on its feeds, Lighter is not alone in this dependency.
CONCLUSIONS
The platform is still in closed beta but has already seen more than 9,700 users execute over 18 million trades and more than 820 million orders. While the platform may still be rough around the edges, it is gaining traction. It has experienced significant growth in recent weeks, and its presence on Crypto Twitter continues to increase. I have been using it a bit recently and I intend to continue using it to farm their points season. With an average daily volume of 200 to 300 million USD, the platform could become a real money printer for early users once the TGE takes place.
A special thanks to Hansolar for the referral code and for answering my questions about Lighter
Courtesy of CL
🏛️ Fundamentals Corner: What you Need to Know about the $RESOLV airdrop
Last week, Resolv finally announced their token, RESOLV, which will likely be one of the most anticipated launches and airdrops of the year.
I extensively farmed it, mainly through LPing and buying YT on Pendle. Given that 10% of the RESOLV total supply (100 million tokens) will be distributed among Season 1 point farmers, I will focus today on points and asset pricing. This should give you an estimate of how much your points could be worth and what RESOLV’s valuation might be at TGE.
Let’s look at some data that could help us assess a reasonably accurate valuation:
6.2 trillion points were distributed;
RESOLV total supply is 1 billion tokens;
50,600 users participated in Season 1;
Resolv’s TVL is currently $357 million and USR market cap is $268 million.
USR and RLP market cap - Source: Dune Analytics
If we compare Resolv to Ethena, which is its direct competitor (I wrote about their comparison on X a while ago, check the article), things do not look particularly promising for RESOLV, since:
USDe was able to retain 78% of its market cap’s all-time high, while USR retained only 48%.
USDe’s market cap is $4.74 billion, almost 18 times larger than USR’s.
USDe market cap - Source: Coingecko
However, there are a few factors working in Resolv’s favor:
They are about to launch in a more bullish market environment than a few weeks ago.
The incredibly low float, since the Season 1 airdrop will essentially be locked for two weeks, means that not much demand is needed to strongly impact the price on the upside.
Given all these factors and the fact that most newly launched tokens have had a fully diluted valuation (FDV) between $200 million and $600 million, I will now break down three RESOLV TGE scenarios: Bearish ($200 million FDV), Neutral ($400 million), and Bullish ($600 million), in order to assess the value of 1 million Resolv points.
Bearish: [($200M * 0.1) / 6.2T] * 1M = $3.23
Neutral: [($400M * 0.1) / 6.2T] * 1M = $6.45
Bullish: [($600M * 0.1) / 6.2T] * 1M = $9.68
To be fair, I’m not expecting this to be an enormous airdrop, given that the ROI on Pendle YTs turned out to be less favorable compared to other cases, the allocation to the drop is not very high, and Resolv has lost half of its market cap in the last few months. However, if you farmed by LPing on Pendle or through other methods that offered the maximum multiplier, you will certainly be well rewarded without having to commit too much capital.
That said, we are all in the same boat, and I wish Resolv (and myself, lol) a successful TGE.
Courtesy of Matt
🏰 Castle Reads
This week we covered the secret sauce behind MegaETH’s growth:
Sophon is gaining mindshare and its SophonOS app might be interesting to look into, by @mattdotfi:
DeFi on Bitcoin might be worth exploring, by @chilla_ct:
📖 Recommended Reads
An interesting deep dive into Hyperliquid’s Market Making Vault mechanics, by @defiance_cr:
Big things are happening (and coming) for Pendle PTs, by @crypto_linn:
Lorebuilders and ‘Breakers: The Creators and Destroyers of Communities, by @DeFiDave22:
That’s it for today’s issue, we hope you enjoyed it.
You can check out our X for new research reports and weekly gigabrain content.
See you in the next issue,
The Castle Team
In our newsletter, we may discuss projects or tokens in which we hold positions. While we aim to provide informative content, our views are not financial advice. Please conduct your research and consult professionals before making investment decisions. Crypto markets are volatile, and past performance doesn't guarantee future results. Invest responsibly, and be aware of the risks. Your capital is at risk, and we do not accept liability for any losses.
gg
Dope