Hi Fintech Futurists —
Robinhood showed their hand in DeFi last Wednesday as they officially launched their own blockchain “Robinhood Chain”. The company’s execs, including co-founder Vlad Tenev, took the stage in a well-rehearsed theatrical display at the historic Old Royal Naval College in London as they announced a string of new on-chain trading primitives.
The stock is up 10% on the news.
This week we unpack Robinhood’s underlying bet on on-chain finance, what it means in the context of the broader digital asset industry, and how it stacks up against similar offerings from Coinbase.
FINTECH: Behind Robinhood’s bet to bring on-chain finance to 27M customers
ANALYSIS: Launching a $201MM SPAC for Fintech, AI, and Crypto
CURATED UPDATES: Paytech, Neobanks, Lending, Digital Investing
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Behind Robinhood’s bet to bring on-chain finance to 27M customers
Economic activity across blockchains has plummeted over the last twelve months. Spot volumes on decentralised exchanges in June were down -71% YoY.
The fees generated by the underlying blockchain networks hosting this activity are likewise down -86% since Jan’25. A major driver behind this fall has been the October 10 crash following US/China trade tensions, which sparked a mass deleveraging event across the ecosystem.
Contagion spread to centralised venues, with a basket of major exchanges like Binance, Kraken, and Coinbase reporting a 50%+ drop in combined spot trading volumes. Robinhood itself reported a -20% fall in quarterly transaction revenue in 1Q26.
This wouldn’t strike investors as the best market backdrop for launching a new chain. But volumes and network activity are reactive indicators. They are responses to past market events, like October 10th.
The trends in venture capital paint a slightly different picture. Data from Galaxy shows VC capital flowing into the crypto industry in 1Q26 annualizing to ~$16B; not far off the $18B recorded in 2025.
The underlying segments are revealing. Firms building financial primitives like trading, lending, and investment products grew their share of VC capital from 10% in 2024 to over 50% today. The industry is converging on the narrative that the next wave of growth in digital assets will be led by financialisation.
This is the bet that Robinhood unveiled with the launch of Robinhood Chain — its own blockchain to distribute tokenized stocks, investment, and derivatives to its 27M customers. This frames chains as a primarily a capital markets venue.
From a technical perspective, Robinhood Chain is a permissionless Layer 2 network, meaning developers and users can interact publicly with it outside the Robinhood app, with transactions ultimately settling on Ethereum.
The company originally launched tokenized stocks for EU customers directly on the Arbitrum network last Summer, but has now completed its migration to Robinhood Chain, which uses the same underlying technology stack. This gives it more customisability to ensure regulatory compliance and more predictable transaction costs.
Coinbase’s Base blockchain pursued a similar path using the competitor Optimism stack. This gives us a glimpse into the economics Robinhood can expect from the network’s transaction (sequencer) fees. Coinbase made around $75M in sequencer revenues from Base in 2025 on the back of a record in transaction volume associated with memecoin and AI-token trading.
The majority of Base activity occurred outside of the core Coinbase app, so it is difficult to estimate the transaction volume Robinhood Chain can achieve. But $75M in annual fees would grow Robinhood’s topline revenue of $4.5B by less than 2%. Nothing to write home about.
The real growth comes from the financial products Robinhood is building on top and distributing directly to users. At launch, these span (1) tokenized stocks, (2) perpetual futures, and (3) yield, with the USDG stablecoin as the connective tissue between them.
Robinhood launched their initial set of 90+ tokenized stocks linked to major companies and ETFs. The tokens are backed 1:1 by the underlying equities and are held by a licensed US custodian. This unlocks both 24/7 trading for users by routing to decentralised exchanges like Uniswap, as well as the ability to borrow against tokens via lending protocols like Morpho.
We think this is closely related to the launch of the company’s native integration of the Lighter perps exchange, which enables users to make bets on tokens with up to 50x leverage. Both borrowing against tokens and accessing leverage via perps builds on one of Robinhood’s fastest-growing products: margin financing.
In 1Q26, the company reported a +75% YoY increase to $193M in interest income on margin financing, making up 18% of total revenues. Stock Tokens and perps give users new ways to access leverage, even though the underlying monetization engine is different.
This is where USDG comes in; the Paxos-issued dollar stablecoin. Robinhood earns net interest income from the short-term Treasuries backing USDG and is positioning it as the default cash token on its network.
Case in point:
Liquidity for Stock Tokens in Uniswap is against USDG
Perps markets on Lighter use USDG as collateral
Borrowing against Stock Tokens on Morpho will be in USDG
The company’s new Yield offering 7% APY (for now) likewise sweeps users’ deposits into a USDG vault on Morpho on Robinhood Chain. The interest comes from a combination of interest income (passed down from Robinhood) and borrower payments from underlying lending markets.
The overarching opportunity is to gradually shift user idle cash balances into the native stablecoin and unlock interest income.
In 1Q26, Robinhood held $26B in customer cash on the platform in its Cash Sweep program, on which it earned $45M. We assume that (1) users allocate 20% of their assets towards this higher-yield (and higher-risk) product, and (2) Robinhood earns 3% APY on USDG on the platform. This would result in the new Yield offering growing quarterly interest income by $156M; a +15% uplift to total revenue.
The upside is larger when accounting for the USDG in the underlying markets for Stock Tokens and Perps. The downside is that the majority of this revenue won’t flow into Robinhood’s bottom line. The current 7% APY at launch is sustained by the company passing the yield back to users.
This is a similar opportunity that Coinbase pursued early-on through its partnership with Circle to promote USDC on the platform. Today, the company earns 22% of its total revenue from interest income passed down by Circle ($305M in 1Q26).
Owning the stablecoin economics is becoming table stakes as traditional fintechs begin to pursue the on-chain opportunity. Stripe’s launch of the Open USD stablecoin with 149 partners last week is a testament to it. Paxos’ USDG is now a core component of Robinhood’s DeFi strategy, adding to its existing partnerships with both Kraken and OKX.
Crypto trading remains just 13% of Robinhood’s total revenue today, compared to CEXs where it is typically 50%+. Based on the annual share performance of HOOD compared to COIN, and CRCL, the market appears to be favouring those who pursue the on-chain opportunity with a diversified trading business to fall back on.
👑 Related Coverage 👑
Analysis: Our SPAC Launch
We discuss the launch of $IPVV, a $201M SPAC that target high-growth companies across fintech, digital assets, AI, and the machine economy. We argue that a growing backlog of venture-backed companies remains private despite reaching meaningful scale, while weak venture DPI and a constrained IPO market have created demand for alternative liquidity pathways.
We review the SPAC structure, and note that today’s SPAC market is materially smaller than the 2020–2021 booms. We conclude that the next generation of SPAC targets is likely to be profitable or near-profitable companies with $50–250MM of revenue and $1–5B valuations rather than the pre-revenue growth stories that defined the prior cycle.
Curated Updates
Here are the rest of the updates hitting our radar.
Paytech
⭐ Stripe’s New Stablecoin Bet: Open USD - Forrester
MetaMask launches Money Account - Coindesk
Airwallex hits $11 billion valuation with $320 million raise - CNBC
Neobanks
⭐ Elon Musk’s ‘bank’ is live - American Banker
Revolut to launch in UAE - Bloomberg
Rain Launches Rewards Loyalty Capability - Finovate
Lending
Plaid Launches Sequential AI Model - Fintech Finance
Visa Cards for AI Agents - Forbes
Barclays to buy GoHenry kids’ debit card and money app - The Guardian
Digital Investing
Coinbase is launching AI tools that give investment advice - Yahoo Finance
SpaceX stock tumbles 16.4%, shaving off most IPO gains - Yahoo Finance
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Robinhood owning the chain instead of renting rails is the tell here. Tokenized equities printed a record volume in June, but a broker running its own chain keeps the fees and the float in house, which is a very different future than the neutral tokenization layer most infrastructure names are priced on. Do stock tokens end up consolidating around brokers or around chains?
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