Author: Tanay Ved

Translated by: Deep Wave TechFlow

Deep Wave Overview: Just three weeks after its launch, Robinhood Chain attracted $200 million in ETH cross-chain, and its daily trading volume has matched that of Coinbase's Base chain. However, on-chain data shows that Robinhood retained 89% of the fee income, with less than 1% distributed to Ethereum—this once again exposes the old problem of insufficient value capture at the base layer in the L2 economic model.

Key Points

In just three weeks since its launch, Robinhood Chain has attracted over $200 million in ETH cross-chain, processing over 130 million transactions, with daily trading volume now on par with Coinbase's Base chain.

Robinhood Chain has generated about $1.9 million in fee income, with about 10% allocated to Arbitrum as Rollup infrastructure costs, and less than 1% paid to Ethereum for data availability and settlement.

The growing supply of stablecoins and tokenized stocks provides the infrastructure for lending vaults and 24/7 stock trading—this is precisely the on-chain financial system that Robinhood is building.

Introduction

With the launch of Robinhood Chain, one of the world's largest retail brokerage firms has officially joined the race to build a financial "super app," attempting to integrate traditional markets, cryptocurrencies, and tokenized RWAs. At the core of this strategy is the on-chain settlement layer supported by Robinhood's global influence. During Robinhood's "The World is Flat" event, the company unveiled a series of products, including its own Layer-2 blockchain—this model is becoming increasingly common among exchanges like Coinbase (Base) and Kraken (Ink).

Early user activity and on-chain data show that Robinhood Chain has achieved rapid growth, with over $200 million in ETH cross-chain, a total transaction volume of about 130 million, and fee income of approximately $1.9 million (as of July 20). As Robinhood retained most of the network's income, this launch has reignited questions about the Ethereum Layer-2 economic model and how much value the base layer can ultimately capture.

In this edition of the State of the Network, we will outline Robinhood Chain, compare its early on-chain usage with other Layer-2 networks, and analyze the economic relationship between Robinhood Chain and Ethereum.

Overview of Robinhood Chain

Robinhood Chain is an Ethereum Layer-2 based on the Arbitrum Orbit tech stack, operated by Robinhood. It focuses on tokenized real-world assets (such as stock tokens and ETFs) and on-chain financial services, including 24/7 trading and lending, with block times as low as 100 milliseconds. The chain is compatible with EVM tools and applications, utilizing Ethereum for data availability and security while using ETH as its native gas token.

Since the mainnet launched on July 1, Robinhood Chain has quickly attracted liquidity and early adoption. Over $200 million in ETH has been cross-chain to Robinhood Chain (hosted on Ethereum and minted on Robinhood Chain) for spending, trading, or as collateral. This demonstrates its early appeal, with users investing capital and generating demand for ETH as gas and collateral.

Figure: USD value of ETH bridged to Robinhood Chain (over $200 million as of July 20). Source: CoinMetrics

Meme Coins, Stablecoins, and Tokenized Stocks

Robinhood Chain has accumulated about $700 million in liquidity, with ETH accounting for 28% ($205 million). However, early growth was driven by speculative activities surrounding Cash Cat, a native minted meme coin that quickly reached about $200 million in market value, helping to kickstart initial liquidity and user engagement.

The chain also has a supply of $430 million in stablecoins, including the on-chain natively issued Global Dollar (USDG) and cross-chain Ethena USDe. These stablecoins underpin Robinhood's Earn product, which is built on the Morpho vault managed by Steakhouse Financial, with total deposits reaching $163 million.

USDG is a consortium stablecoin issued by Paxos, distributing reserve interest to partners within the Global Dollar Network, creating an incentive structure similar to OpenUSD (OUSD). This not only supports on-chain liquidity but also ties Robinhood and other distribution partners to USDG supply growth, providing an additional source of revenue linked to the expansion of the stablecoin base.

This liquidity translates into strong on-chain activity: the daily trading volume of Robinhood Chain has matched that of Coinbase's Layer-2 network Base, with about 270,000 daily active addresses and a total of approximately 3.4 million addresses.

Figure: Comparison of daily trading volume between Robinhood Chain and Base. Source: CoinMetrics

Activity is currently driven by various factors: speculative meme coin trading via Uniswap, Lighter, and other spot/perpetual DEXs, Morpho vault infrastructure, and early growth of tokenized stocks through Robinhood's stock tokens. Robinhood's tokenized stocks are ERC-20 tokens, adopting a model similar to Backed xStocks, structured as tokenized debt securities that provide economic exposure to the underlying assets held by custodians.

Whether this initial explosion can mature into sustainable on-chain usage, especially around RWAs and on-chain financial products, remains an important trend to monitor.

Robinhood Chain Economics: Fee Income and Operating Costs

The value generated by these activities ultimately belongs to different parts of the tech stack. Since its launch, Robinhood Chain has earned about $1.94 million in total transaction fee revenue, which is the total fees paid by users on L2. Of this, about 10% (around $193,000) is shared with Arbitrum for providing the Rollup infrastructure and execution environment, and less than 1% (about $12,000) is paid to Ethereum for data availability and security. The remaining approximately 89% (about $1.73 million) is retained by Robinhood, reflecting how L2 operators capture most of the value from application usage.

Figure: Gross revenue of Robinhood Chain, Arbitrum share, Ethereum L1 costs, and Robinhood net retention (as of July 20). Source: CoinMetrics

Robinhood Chain currently uses a first-come, first-served (FCFS) ordering. Transaction order is determined by arrival time rather than auction, meaning the chain does not derive additional revenue from transaction ordering or MEV like some orderers.

Figure: Comparison of daily fee payments to Ethereum by each L2. Source: CoinMetrics

This model is not unique to Robinhood; among major Layer-2s, L1 costs (for data availability and settlement) account for only a small portion of total fee income. Despite occasional peaks in demand, the fee income generated by these networks consistently exceeds the costs they pay to Ethereum for data availability and settlement.

As shown in the table below, Base has generated $30.08 million in total fee income to date in 2026, while paying $65,500 to Ethereum, sharing about $4.5 million with Optimism Collective, and retaining about $25.5 million in net profit, with a profit margin of approximately 85%. In less than a month since the mainnet launch, Robinhood Chain retained around $1.73 million (approximately 89%) of the $1.94 million in fees, paid only $12,000 to Ethereum, and shared 10% (approximately $193,000) with Arbitrum according to the fee-sharing plan.

Figure: Fee income and operating costs comparison of Base, Robinhood Chain, and Optimism. Source: CoinMetrics

For Ethereum, this re-exposes a familiar contradiction. Layer-2 and its tech stack capture most of the direct fee income, but their growth creates network effects, expanding the ecosystem and increasing demand for ETH as gas, as well as for Ethereum as the neutral settlement layer that protects these high-profit application chains.

Robinhood Chain has quickly become a highly active and profitable Layer-2, initiated by meme coins, stablecoin liquidity, and the growing base of tokenized stocks. Its economic model highlights how Robinhood captures most of the fees generated by user activity while relying on Ethereum for security and settlement.

Whether this initial explosion can mature into sustainable on-chain usage, particularly around RWAs and the on-chain financial infrastructure built based on 24/7 markets and Robinhood's global distribution capabilities, remains an important trend to watch as these markets accelerate their convergence.