On the eve of its Q2 earnings report, Robinhood held a 'The World is Flat' event in London on July 2, officially launching its Layer 2 blockchain Robinhood Chain. The market reacted positively, with Robinhood shares surging 8.35% to $108.6, a near six-month high. Simultaneously, the company unveiled a suite of crypto products including tokenized stocks, on-chain lending, and AI-powered trading, while accelerating global expansion—signaling its ambition to evolve from an internet brokerage into a next-generation global financial on-ramp.
Robinhood Chain and the On-Chain Financial Product Suite
Built on Arbitrum Orbit, Robinhood Chain went live on public mainnet after months of testing. It is positioned as an institutional-grade, AI-native blockchain infrastructure optimized for real-world assets (RWA). Around the chain, Robinhood expanded its product matrix covering trading and yield:
- Tokenized Stocks: Added to Robinhood Wallet, available in over 120 countries. Users can trade tokenized equities via DEXs like Uniswap, Rialto, Lighter, 1inch, and Arcus, and use them as collateral in DeFi lending or liquidity pools.
- On-Chain Perpetuals: Robinhood Wallet now supports perpetual contracts for stocks, commodities and other assets outside traditional market hours. An initial 90-day fee waiver and gas subsidies, plus points incentives, aim to boost adoption.
- Yield Products: Robinhood Earn (for US users) rolls out gradually. Users can deposit USDG stablecoins into self-custody wallets and earn an estimated ~7% APY. The product is powered by Morpho's lending infrastructure and backed by Steakhouse, Ethena, Spark, Maple, with insurance integration.
- AI Trading: The crypto version of Agentic Accounts allows eligible US users to connect AI models that autonomously scan markets and execute strategies, subject to user-defined risk parameters and capital limits.
These launches come as Robinhood's crypto business faces headwinds: Q1 crypto revenue fell 47% YoY to $134 million, and nominal crypto trading volume dropped 48% to $24 billion. To bolster growth, Robinhood has expanded globally to ~28 million users, launched in Canada, secured a MAS license in Singapore, and plans to offer commodity, ETF and forex perpetuals in Europe, plus UK crypto trading services soon.
dYdX's Arcus Controversy Shakes the Community
Leveraging its massive user base, Robinhood Chain quickly attracted top protocols including Uniswap, 1inch, Lighter, Morpho, Chainlink, BitGo, Ethena, and EtherFi. Among them, the dYdX foundation announced a collaboration with Robinhood to launch a new DEX—Arcus—on Robinhood Chain. Arcus supports 95 tokenized stocks, perpetual contracts, and major crypto assets, with plans to accept tokenized stocks and crypto as collateral for perps, and to enable pre-IPO equity trading of hot private companies like OpenAI. A beta version is live, with full launch expected in late 2026.
Controversy erupted because Arcus, developed by the dYdX team, was not built on dYdX Chain but as an independent product on Robinhood Chain. Founder Antonio explained in an open letter that running a dedicated public chain forces trade-offs between performance, UX and decentralization, while competitors with faster execution and simpler products are grabbing market share. Choosing Robinhood Chain was largely driven by user access and liquidity: Robinhood has ~27.7 million funded accounts, providing Arcus with an immediate user base and liquidity pool. Arcus also received a strategic investment from Robinhood Crypto.
However, the community voiced strong concerns that the core dYdX team building a separate brand would divert development resources, product focus, and market attention to Arcus, potentially cannibalizing dYdX's brand value. Given dYdX's history as one of the largest airdrops in the industry, Arcus's potential token launch could attract traders and liquidity away from dYdX Chain, diluting DYDX token value. The dYdX foundation reiterated that its support for the dYdX protocol and governance remains unchanged; dYdX Chain continues operating normally, with staking rewards paid in USDC and governance controlled by DYDX holders. Antonio further committed that if Arcus issues a token, a portion will be reserved for dYdX community distribution, and Arcus will grant early access to dYdX traders. Despite these reassurances, DYDX token price plunged ~40.7% intraday.
Market Reaction and Strategic Outlook
Robinhood's ambition extends far beyond providing just a blockchain infrastructure. With ~28 million users, a mature brokerage business, and a global compliance footprint, it is using Robinhood Chain to expand its service perimeter and accelerate its transformation from an internet broker into the next-generation on-ramp for global finance. Yet the dYdX community backlash highlights the delicate balance required in ecosystem building—whether Robinhood Chain can retain top protocols without internal friction remains to be seen.