Robinhood Chain demonstrates strong Layer 2 performance but struggles to drive core cryptocurrency revenue.

This article comes from:ACJ

Compiled by Odaily Planet Daily (@OdailyChina); Translator: Azuma (@azuma_eth)

• Even as Robinhood’s overall business hit record highs, its crypto business is declining. In the second quarter of 2026, Robinhood’s crypto revenue fell 38% year-over-year to $100 million, accounting for only 8% of the company’s total revenue; retail crypto trading volume dropped 36% year-over-year, and the share of crypto assets in customer total assets under custody (AUC) fell to a historic low of just 7%.
• Robinhood Chain is one of the strongest-performing Layer 2 (L2) network launches recently, generating $3.6 million in real economic value (REV) in July, accounting for 38% of all L2 network revenue tracked by growthepie, surpassing established networks including Polygon and Base.
• Meme coins, not real-world assets (RWA), drove early activity on Robinhood Chain. In July, meme coins accounted for 51% of Robinhood Chain’s spot trading volume, while RWA made up only 5%. Additionally, 48% of RWA trading volume came from liquidity pools combining RWA and meme coins.
• Robinhood's clearest monetization opportunity lies not in the infrastructure layer, but in the application layer. Currently, the USDG stablecoin already generates approximately $10.5 million in annualized interest income; the Morpho case also demonstrates the value of Robinhood's primary app distribution capability. In contrast, Lighter's trading volume solely from Robinhood Wallet integration accounts for just 0.2% of its total perpetual contract volume.
• Currently, Robinhood Chain does not significantly impact Robinhood’s profits. The combined annualized revenue from known sources of Robinhood Chain is only about $54.8 million, equivalent to 14% of Robinhood’s annualized crypto revenue. For Robinhood Chain to become a material business line, the company needs to scale USDG, monetize traffic from its main app, or use the chain as an entry point for users to access higher-value products.

Perhaps no company better represents the rise of retail investors than Robinhood, which has become synonymous with retail investing, driving rapid growth in its underlying business.

In the second quarter of 2026, Robinhood's quarterly revenue reached $1.31 billion, a record high, representing a 32% year-over-year increase and a 92% increase compared to the second quarter of 2024. This growth was driven not only by its core stock and options trading business but also by its expanding product lineup. Today, Robinhood has 13 business lines each generating over $100 million in annualized revenue. In fact, during the second quarter of 2026, all of Robinhood's transaction-based revenue streams achieved double-digit year-over-year growth...

Except for one exception — cryptocurrency businesses.

The cryptocurrency business, which once contributed more than one-third of Robinhood’s revenue, has now been reduced to a nearly negligible portion. In the second quarter of 2026, cryptocurrency accounted for only 8% of Robinhood’s total revenue, the lowest level since the third quarter of 2023.

The importance of crypto revenue in Robinhood's revenue mix has declined significantly—even event contracts, launched just last year (i.e., prediction markets), generated more revenue in the second quarter than crypto:

• Event contract revenue: $156 million;
• Crypto business revenue: $100 million;

This weakness is evident not only in the declining revenue share but also in the fact that Robinhood's core users are losing interest in crypto assets. While this trend is not unique to Robinhood, the magnitude of its decline remains startling.

The most evident indication comes from trading activity. In the second quarter of 2026, retail cryptocurrency trading volume on the Robinhood app amounted to just $18.2 billion, a 36% year-over-year decline and the lowest quarterly level since the third quarter of 2024.

The decline was so significant that institutional trading volume on Bitstamp surpassed retail trading volume on Robinhood for the first time, even though institutional activity during the same period was not particularly strong—Bitstamp’s second-quarter trading volume was $22.2 billion, its second-lowest quarterly performance on record.

Trading volume is not the only indicator of crypto business contraction. In the first quarter of 2024, crypto assets under custody (AUC) amounted to $26.2 billion, representing 20% of Robinhood’s total AUC. More than two years later, crypto AUC remained roughly flat at $26.3 billion, but its share of total AUC dropped to just 7%, marking the lowest quarterly percentage on record.

Under this backdrop, Robinhood’s crypto revenue has been severely impacted. Crypto revenue declined by 38% year-over-year in the second quarter, and its share of total revenue dropped by 53%. In short, Robinhood as a whole is growing, but its crypto business is not.

However, Robinhood has not retreated from the crypto space. Instead, it has launched Robinhood Chain, its largest crypto bet to date. Rather than relying almost entirely on trading revenue, Robinhood is attempting to build a broader, more sustainable crypto business. The key question is whether Robinhood Chain can make crypto a meaningful growth driver for Robinhood once again.

On July 1, 2026, Robinhood officially launched the Robinhood Chain mainnet at The World Is Flat event. This is Robinhood’s proprietary Layer-2 (L2) blockchain, designed to power the company’s growing on-chain ecosystem. Since its launch, Robinhood Chain has become one of the fastest-growing blockchains in recent history.

In its first month after launch, Robinhood Chain generated $3.6 million in Real Economic Value (REV). While it is still too early to determine whether this level of activity is sustainable, if annualized based solely on the first month’s data, Robinhood Chain’s annualized REV would be approximately $43.2 million.

This is a good starting point, but this scale alone is still far from enough to reverse the decline in Robinhood's cryptocurrency business revenue.

Even so, the launch performance of Robinhood Chain remains impressive. In July, Robinhood Chain ranked first in revenue among all L2 networks, surpassing many mature networks that have been operating for years, such as Polygon ($2.7 million) and Base ($2.1 million).

According to data tracked by growthepie, Robinhood Chain currently accounts for 38% of all L2 network revenue. In other words, Robinhood Chain has become the L2 with the highest chain revenue, yet 62% of the market share still belongs to other networks. Even if total L2 chain revenue stagnates, Robinhood Chain can still achieve significant growth by capturing a larger share of the market.

However, Robinhood Chain’s early success had an important prerequisite: the majority of current activity is driven by meme coins, which have historically been one of the biggest drivers of blockchain REV. Robinhood appears to accept this willingly, with founder Vlad Tenev repeatedly expressing support for memes.

Even so, the extent to which meme coins have driven activity on Robinhood Chain is remarkable: the chain facilitated $6.93 billion in spot trading volume in July, with $3.55 billion (51%) coming from meme coins. In contrast, RWA—Robinhood Chain’s claimed core use case—accounted for only $313.2 million, or 5% of total trading volume.

In addition, the direct share of Meme coins in Robinhood Chain’s trading volume may still underestimate their true impact on network activity. Take RWA as an example. The Meme coin launch platform L()ng promotes a strategy of pairing Meme coins with tokenized stocks or ETFs in liquidity pools, thereby linking the price movement of Meme coins to the underlying RWA. If the underlying RWA increases by, say, 5%, the Meme coin’s price also rises by 5% (assuming no buying or selling activity). As a result, a significant portion of what appears to be RWA trading volume is actually driven by Meme coins. Between July 6 and July 31, 48% of RWA trading volume occurred in liquidity pools pairing Meme coins with RWA.

While meme coins have effectively driven growth in chain revenue, they have historically rarely served as a long-term, stable source of income. Meme coin activity is highly cyclical, with Ethereum, Avalanche, TRON, and Base all experiencing their own speculative surges, only for capital and users to eventually shift to other networks. It remains uncertain whether Robinhood Chain will be able to retain this activity. One month of data is insufficient to determine whether meme coins will become a sustainable source of REV for Robinhood Chain, or whether they are merely another temporary stop in the cycle of capital rotation, ultimately returning to Solana.

From a broader perspective, Robinhood Chain’s REV alone is unlikely to revive Robinhood’s cryptocurrency business. Across the entire industry, network revenue is undergoing a structural decline. First-generation smart contract platforms once generated substantial fee income from the scarcity of block space, but as block space becomes increasingly commoditized, new chains find it ever more difficult to generate significant revenue from infrastructure alone.

In July, blockchains tracked by Blockworks generated $122.4 million in network revenue, the lowest monthly total in three and a half years. By comparison, network revenue in July 2025 was $333.7 million, a 63% year-over-year decline. This deterioration cannot be simply attributed to market cycles; in July 2023, during the previous bear market, blockchains still generated $300.1 million in network revenue.

As previously mentioned, Robinhood already has 13 business lines generating at least $100 million in annualized revenue; it is difficult to imagine Robinhood Chain joining this group based solely on network revenue. Even if Robinhood Chain continues to capture a larger share of active L2 usage, its chain revenue will eventually hit a market ceiling of approximately $100 million in annualized revenue.

Breaking through this ceiling requires Robinhood to bring its existing user base on-chain. However, since Robinhood’s user base is primarily located in the United States, most of them currently cannot access Robinhood Chain through the Robinhood app under the existing regulatory environment, and this process may take time.

If Robinhood wants Robinhood Chain to become the next $100 million business line in the short term, the company needs to move beyond a simple network revenue model.

Value capture in the crypto industry is gradually shifting from the infrastructure layer to the application layer. Solana is a great example of this.

In January 2024, at the beginning of Solana’s recovery, Solana applications generated $40.9 million in revenue, while the Solana network earned $21.4 million in REV, with application revenue being approximately 1.9 times the network’s revenue; in January 2025, at the peak of Solana’s bull market, application revenue reached $1.13 billion, while Solana REV was $551.7 million, maintaining a ratio of about 2:1; however, since then, this gap has widened further. In July 2026, for every dollar of revenue generated by Solana ecosystem applications, the network itself earned only about $0.20.

In other words, the application layer is capturing an increasing share of value, while the proportion of value going to the underlying blockchain is declining. If Robinhood wants Robinhood Chain to become its next $100 million business line, it must directly engage in the monetization of on-chain applications. Although Robinhood has not officially announced this strategy, its early moves point in this direction.

The most prominent case to date is Robinhood’s stablecoin strategy. Unlike most blockchains that primarily rely on Circle’s USDC or Tether’s USDT, Robinhood has designated USDG as the native stablecoin of Robinhood Chain. This creates an additional revenue stream for Robinhood—interest income generated from the underlying reserve assets of USDG. As of the end of July, the market capitalization of USDG on Robinhood Chain was $333.1 million. Assuming a 3.5% yield on the underlying reserves and that 90% of the related interest income accrues to Robinhood, USDG would generate approximately $10.5 million in annualized additional revenue.

Robinhood should not find it difficult to further expand the supply of USDG, thereby creating a sustainable revenue stream. If the USDG supply reaches $1 billion (a realistic target, given that 11 blockchains already have stablecoin supplies of at least $1 billion), it would generate $31.5 million in annualized revenue, nearly matching Robinhood Chain’s current chain revenue.

Robinhood Chain also appears to be expanding its application layer beyond stablecoins. Lighter has launched a customized deployment of its Perp DEX on Robinhood Chain and will split transaction fees 50/50 with Robinhood. As part of the collaboration, Robinhood Wallet—an independent self-custody wallet separate from the main Robinhood app—will feature Lighter’s perpetual contracts directly within the app.

In addition, it is rumored that Morpho paid Robinhood fees for integration within the Robinhood app. If true, this would represent a distinctly different business model from the traditional blockchain ecosystem, where blockchain projects typically pay incentives to applications to encourage deployment—whereas Robinhood is now attempting the reverse, with applications paying to access Robinhood’s user distribution channel.

The feasibility of the entire application layer strategy ultimately depends on the value of Robinhood’s distribution channel. If protocol parties are willing to pay to reach Robinhood users, Robinhood can monetize this traffic asset.

Based on current cases, protocols on Robinhood Chain can primarily acquire users through two channels:

• Robinhood's main app, such as Morpho;
• Independent Robinhood Wallets, such as Lighter.

Although the distribution capability of Robinhood's main app is well known in the market, the value of distribution through Robinhood Wallet remains far from clear.

On the Robinhood Chain alone, Robinhood Wallet users generated $119.6 million in trading volume in July. Daily trading volume peaked at $11 million on July 8 and declined to an average of $2.1 million per day during the final week of the month. The average daily number of active wallets for Robinhood Wallet in July was also just under 7,000. This analysis did not apply sybil attack filtering, so the actual number of unique users may be lower.

Compared to the broader ecosystem of wallets and trading apps on Robinhood Chain, Robinhood Wallet remains a relatively small player. In July, the total trading volume across all tracked wallets and apps reached $3.08 billion, with Robinhood Wallet accounting for $119.6 million—less than 4% market share. However, the trading volume of these apps is primarily driven by power users. Robinhood Wallet ranks fourth in daily active wallets, despite ranking sixth in trading volume.

The integration of Lighter further demonstrates the limited distribution value of Robinhood Wallet. Since its integration with Robinhood Wallet, Lighter’s Robinhood deployment has accounted for only 0.2% of its total perpetual contract trading volume. In July, this figure amounted to $86.8 million, below the spot trading volume generated through Robinhood Wallet during the same month.

Perhaps more concerning, Lighter is directly incentivizing perpetual contract trading through Robinhood Wallet, allocating 11 million LIT tokens, currently worth approximately $25 million. Even the currently limited trading volume is driven by these incentives and would likely be lower without them. At this point, it is difficult to determine how much revenue the distribution via Robinhood Wallet alone can generate.

Although the distribution value offered by Robinhood Wallet may be limited, the main Robinhood app is very different. Morpho provides the clearest example: Robinhood users can directly deposit stablecoins into Morpho through the main app to earn an incentivized 7% annual yield. As of the end of July, the market deployed by Morpho on Robinhood Chain accounted for 5% of Morpho’s total deposits and nearly 6% of all loans. In just one month since launch, Robinhood Chain has become Morpho’s third-largest TVL market.

It should be acknowledged that this portion of TVL is also incentivized. Nevertheless, the disparity in distribution between the Robinhood main app and Robinhood Wallet remains significant. Although not a perfect like-for-like comparison, Robinhood Chain’s market share of Morpho’s total deposits is 25 times greater than Robinhood’s market share of Lighter’s total perpetual trading volume.

Therefore, early conclusions about the value of Robinhood’s distribution are mixed. For protocols that can secure direct integration into Robinhood’s main app, the distribution value appears extremely high; but distribution solely through Robinhood Wallet is far less appealing. Unless Wallet integration serves as a stepping stone to eventual access to the main app, it is difficult to understand why protocols would sacrifice meaningful economic value for it.

Certainly, this conclusion is based solely on two early cases. Robinhood has not officially designated app-level distribution of trades as a broader strategy, nor is it clear to what extent the company intends to pursue such partnerships. However, the differences observed so far are significant. The true value of Robinhood’s distribution capability does not come from “association with the Robinhood brand” or “deployment on Robinhood Chain,” but from direct access to users within Robinhood’s main app.

This report begins with a core question—can Robinhood Chain make crypto a meaningful growth driver for Robinhood again?

Early data paints a fairly clear picture. Robinhood Chain has achieved notable success as a blockchain, but has not yet become a meaningful contributor to Robinhood’s business. Robinhood’s crypto revenue for Q2 was $100 million, annualized to approximately $400 million. In comparison, known and quantifiable revenue streams associated with Robinhood Chain—chain REV, USDG interest income, and Robinhood’s share of Lighter fees—total only $54.8 million annualized, or about 14% of Robinhood’s annualized crypto revenue. It should be noted that this comparison annualizes only the first month of Robinhood Chain’s data and should not be mistaken for its long-term revenue potential.

Frankly, Robinhood Chain will never have a meaningful impact on Robinhood based on network revenue alone. Block space has become too commoditized, and the entire L2 revenue market is too small. For Robinhood Chain to make crypto business a meaningful growth driver again for Robinhood, the company needs to monetize economic activity above the infrastructure layer.

Stablecoins offer the clearest path. Tether and Circle have already demonstrated how lucrative interest income from stablecoin reserves can be. At a 3.5% yield, $1 billion in USDG supply would generate $35 million in annualized revenue for Robinhood (assuming it retains all related interest income). A supply of $10 billion would increase this to $350 million annually, nearly matching Robinhood’s current annualized crypto revenue. This won’t happen overnight, but given the scale and magnitude of Robinhood’s business, achieving this is not unimaginable.

App distribution is another compelling opportunity. Robinhood possesses something that nearly all other blockchains lack—direct access to a vast base of retail investors. If on-chain protocols are willing to pay fees to reach these users or share revenue with Robinhood, Robinhood can monetize its distribution capabilities beyond merely relying on fees generated by the chain itself. Early results indicate that this strategy works effectively when protocols integrate into Robinhood’s main app, even though the distribution of Robinhood Wallet itself holds little value.

Another possibility is that Robinhood does not view Robinhood Chain as a standalone revenue-generating business. Instead, it may see the chain as a user acquisition and conversion channel. Robinhood Chain could serve as a gateway to introduce users to tokenized assets before guiding them toward trading stocks, options, crypto, and other products within the broader Robinhood ecosystem. Under this model, the chain’s value may not be reflected in network revenue directly, but rather through increased engagement and revenue across other areas of Robinhood’s business.

Currently, the answer to the question posed at the beginning of this report remains “no.” Robinhood Chain has not yet become a meaningful driver of Robinhood’s growth, and network revenue alone will never make it one; for the answer to eventually become “yes,” Robinhood must either scale USDG or monetize its user distribution capability from the main Robinhood app. Otherwise, Robinhood Chain is likely to have only indirect financial value, serving merely as a traffic driver for the high-value products that are already fueling Robinhood’s business.