The financial market is pulled by two forces: a solid belief in tangible value and a passionate pursuit of intangible expectations. At this moment, the crypto world is vividly portraying this tug of war. On one side, the tokenization wave of Real-World Assets (RWA) attempts to create an anchor for this digital realm previously known as an "on-chain casino", tying it to the large ship of the real economy.
On the other hand, the "entertainment is trading" model represented by pump.fun simplifies trading into a game of absorbing attention and dopamine, creating millions of meme casinos that attract massive capital yet vanish in an instant.
These seemingly divergent trends raise a core question: Are they fundamentally contradictory in terms of regulation? The answer may be more complex than it appears. This is not a zero-sum game, but more like two races with different purposes playing out on the same technological foundation.
How can a unified legal framework govern two entirely different financial universes?
Attention Casino: When Friction Disappears, Trading Becomes Instinctive
The core of "entertainment is trading" is not creating value, but eliminating friction. From one-click orders on Telegram bots, to creating and trading a new token on pump.fun in seconds, to the doomscroll-style immersive information flow (infinite scrolling), the ultimate goal of all these designs is to separate thinking from trading decisions, making it an almost instinctive reaction.
Kyle Samani from Multicoin Capital is right, this is like a deep preview of "software as finance", where the evaluation criteria are no longer traditional value assessments, but whether users "want to come back and see if there's anything new".
In the world of entertainment trading, traditional financial logic is completely overturned. Analysts are surprised to find: "The most profitable players are often willing to accept a 10% slippage just to get in three seconds earlier." This sentence precisely captures the essence of the attention market: time value overwhelms price value, with speed and community consensus replacing fundamental analysis.
The rise of memecoins and User-Generated Assets (UGA) is the ultimate manifestation of this logic. Their value comes from community belief and narrative propagation power, not any quantifiable cash flow or physical assets. This is an attention black hole that perfectly financializes human FOMO, social competition, and entertainment needs.
When everyone becomes a chip, banker, and gambler all at once, this best explains the situation.
Everything Can Be RWA, But Regulation Is Not That Simple
Meanwhile, the RWA narrative seems as calm as a 50-year-old sipping from a thermos. The Hong Kong-published "RWA Industry Development Research Report" emphasizes that not "everything can be RWA".
Successful tokenized assets must meet strict thresholds such as value stability, clear legal rights, and verifiable off-chain data. From US Treasury bonds and commercial real estate to carbon credits and artworks, RWA aims to liberate high-quality assets with limited liquidity and high transaction costs from the traditional financial system to the blockchain.
This path pursues trust, stability, and efficiency. It attempts to solve the long-standing issues in the crypto world of "trading air" and "tokens without fundamentals", transforming it from a purely speculative stage to a value internet that can serve the real economy.
The entry of traditional financial giants like Citibank and Standard Chartered, and blockchain platforms designed specifically for RWA trading, all indicate that RWA will be institution-led, premised on compliance, and aimed at upgrading rather than subverting the existing financial order (which is almost becoming common sense).
The core of RWA is prudent policy and long-term trust-building, forming a black and white contrast with the short-cycle, high-volatility attention casino.
Regulatory Dilemma: Difficult to Manage Two Worlds Legally
On the surface, these two trends seem to be able to develop peacefully on their own tracks. But in the offices of regulators, contradictions emerge.
The U.S. Securities and Exchange Commission (SEC) or any country's financial regulatory body, when trying to apply existing financial regulations to these two worlds, is on the verge of a profound "regulatory schizophrenia".
Although complicated, the regulatory path for RWA is relatively clear. Whether tokenized funds or real estate equity, their economic substance is highly similar to traditional securities and cannot escape the jurisdiction of the ancient Howey Test.
Inevitably, the regulatory core will revolve around how to match requirements like registration, disclosure, and investor protection from securities law to the blockchain financial framework. The SEC's recent "Project Crypto" and focus on compliant token standards like ERC-3643 indicate that regulators are trying to pave a walkable path for RWA.
However, this logic falls short when applied to the memecoins infinitely launched on platforms.
Born from community meme, without a centralized management team, and with value entirely dependent on community sentiment, does it constitute a "security"? Is defining its users as "investors" expecting profit accurate? What they purchase might be more like a digital consumer good, a "ticket" to participate in a community game.
Let the on-chain remain on-chain, and Caesar's belong to Caesar. The United States states that DeFi and meme coins are not illegal, and they simply wave their hand. But what about RWA tokens quietly "going" on-chain, being fragmented by new standards, repackaged, and then traded? Can they be regulated?
Different Games, Different Rules
We must admit that this seemingly irreconcilable contradiction is fundamentally not the same game.
Viewing "entertainment as trading" and "RWA tokenization" as mutually conflicting is itself a misinterpretation. They are two games with entirely different rules, goals, and participants on the same technical venue (blockchain).
The RWA game is essentially TradFi 2.0, an upgraded version of traditional finance. Its players are institutions, high-net-worth clients, and risk-averse investors, with the goal of enhancing asset liquidity, reducing transaction costs, and obtaining "stable returns" within a compliant framework, at least hoping for stability.
The "entertainment as trading" game, on the other hand, is a Web3 Native original tribe, pure digital cultural residents. Its players are broad retail investors and community participants, aiming to pursue high-risk speculative returns, social identity, and entertainment experiences. Although regulators are reluctant to manage and find it too difficult, businesses wanting to cultivate this space will continue to operate increasingly exciting casinos.
As for touching the regulatory bottom line of RWA, that's the casino's skill. We also know that casinos are legal in some countries and regions, and illegal in others, but casinos will always exist in some form. Gambling is trading for entertainment, which is one of the essential nature of financial transactions.
