Written by Xiao Bing
Robinhood's cryptocurrency business is finding a new way to make money.
After hours on October 27, Robinhood reported its third-quarter earnings. Crypto revenue increased 20% quarter-over-quarter to $120 million. Robinhood Chain, which launched on mainnet on July 1, contributed $26 million in its first quarter; excluding this, crypto trading revenue declined 6% quarter-over-quarter to $94 million, while total crypto revenue remained 55% lower year-over-year.
All growth comes from new chains, while existing business is declining.
Where did the $26 million come from?
This is the first full quarter since Robinhood Chain launched on mainnet. From its July 1 launch through the end of September, this Arbitrum-based Layer 2 chain processed over $80 billion in DEX trading volume, generated more than $50 million in on-chain fees, of which $26 million was recorded as Robinhood’s crypto revenue.
Excluding contributions from Robinhood Chain, traditional crypto trading revenue amounted to just $94 million, a sequential decline of approximately 6%.
On-chain data shows that activity on this chain is highly concentrated: over 12 days from August 30 to September 10, the surge accounted for 74% of the quarter’s total transaction fees. During this period, daily on-chain trading volume briefly exceeded $1.5 billion, and daily fees surpassed those of Ethereum Mainnet and Base, reaching the highest in the network.
What’s driving all of this isn’t Vlad Tenev’s envisioned tokenized stocks and RWAs—it’s meme coins.
In less than three weeks, Robinhood Chain's daily active addresses surpassed Coinbase's Base, with over 80% of DEX trading volume coming from meme coin speculation.
$50 million in on-chain fees; Robinhood recognized only $26 million in revenue, with most of the remainder going to Arbitrum DAO’s share and on-chain application layers, resulting in a monetization rate of approximately 50%—not high, but still a significant increase for a new chain only three months old.
Crypto trading income is shrinking.
Bring your focus back into the app—the situation is not promising.
Cryptocurrency trading revenue plummeted 55% year-over-year, falling from a high level last year to just 8.4% of the company’s total revenue. Despite trading volume increasing from $40 billion in Q2 to $50 billion in Q3, revenue continued to decline, indicating a sustained drop in monetization efficiency per trade.
Competition and fee pressure are evident.
Crypto trading is no longer a monopoly of Robinhood—Coinbase, various DEXs, and an increasing number of brokers are all vying for retail trading volume.
Prediction markets are the new engine.
The real growth story lies in event contracts (prediction markets). Q3 revenue reached $173 million, more than six times year-over-year growth and an 11% quarter-over-quarter increase, having exceeded crypto trading revenue for two consecutive quarters.
Robinhood currently has 14 business lines with annual revenues exceeding $100 million; the three new ones added by 2026 are Rothera (a self-built prediction market exchange), a credit card, and Robinhood Legend (an advanced trading platform).
This shift is interesting: two years ago, Robinhood’s growth narrative was that of a “beneficiary of the crypto bull market”; now, crypto trading accounts for only 8% of total revenue, with prediction markets and options being the largest sources of trading income.
Overall financial report: Revenue hits a new high, but profits are declining.
Q3 total revenue reached a record high of $1.42 billion, up 12% year-over-year. However, net profit was $476 million, down 14% year-over-year; diluted EPS was $0.51, down 16% year-over-year and below the market expectation of $0.55.
Revenue is increasing, but profits are not, as rising operating expenses are eroding profit margins.
Over the past two years, Robinhood has aggressively expanded into new business lines: building its own blockchain, acquiring Bitstamp and WonderFi, launching the lending product Robinhood Earn, and securing a license for prediction markets. These investments began to reflect in costs starting in Q3.
CFO Shiv Verma emphasized that net deposits in October exceeded $13 billion (including $6 billion from the Dell family into Trump Accounts), and the number of Gold members reached a record 5.2 million. While users and assets continue to grow, the market is clearly not responding positively to the slowdown in profits.
What does it mean for the cryptocurrency industry?
Robinhood's earnings report reflects a broader trend: for traditional financial platforms, profiting from cryptocurrency trading is becoming increasingly difficult, but building blockchains is opening new revenue opportunities.
Robinhood Chain's $26 million in revenue comes from directing users from in-app matched trades to on-chain DEX trades, shifting from a trade commission model to a fee-sharing model based on chain infrastructure. The former is pressured by market cycles and fee wars, while the latter grows in tandem with on-chain activity.
This follows the same logic as Coinbase’s launch of the Base chain. The difference is that Base has not yet generated direct, explicit revenue, while Robinhood Chain generated measurable GAAP revenue in its first quarter.
The issue is clear: the bulk of Q3 on-chain revenue came from a 12-day meme coin surge. Whether this burst of activity can be sustained will determine whether Robinhood Chain is a genuine revenue engine or merely a highly volatile, cyclical add-on.