On July 2, Robinhood held its 'The World is Flat' event in London, unveiling the mainnet launch of its Layer2 blockchain, Robinhood Chain, and announcing a suite of crypto products. Following the announcement, Robinhood's stock price rose 8.35% to $108.6, a six-month high. In the highly competitive L2 landscape, Robinhood leveraged its massive user base and mature financial operations to quickly assemble a roster of leading crypto protocols—but also triggered an unexpected community conflict.
Self-Built L2 Goes Live: Multiple Products Build On-Chain Finance Gateway
Robinhood Chain is built on Arbitrum Orbit, positioned as an institutional-grade, AI-native blockchain optimized for real-world assets (RWA). Alongside the chain, Robinhood expanded its on-chain product matrix significantly. For tokenized stocks, Robinhood Wallet added support covering over 120 countries and regions, allowing users to trade via DEXs like Uniswap, Rialto, Lighter, 1inch, and Arcus, and to use tokenized stocks as collateral for lending or liquidity provision. Previously exclusive to Europe, this global expansion reflects surging demand for tokenized assets and increasing competition between traditional and crypto trading platforms.
In on-chain perpetuals, Robinhood Wallet launched corresponding features, enabling investors to trade stocks, commodities, and other assets outside traditional market hours. To drive adoption, the platform offered 90 days of fee-free trading and gas subsidies, plus loyalty incentives. On the yield front, Robinhood Earn began rolling out to US users—the first decentralized lending product within the main app. Users can deposit the US dollar stablecoin USDG into self-custodial wallets to earn an estimated ~7% APY. The product relies on Morpho's lending infrastructure and is supported by Steakhouse, Ethena, Spark, Maple, and other DeFi protocols, with insurance mechanisms to mitigate risk. Additionally, Robinhood extended its AI trading capabilities on-chain with Agentic Accounts for crypto. Eligible US users can connect AI models to autonomously execute market scanning and trading strategies based on preset risk parameters and capital boundaries. Similar tools were previously introduced for equity and options.
This expansion comes amid pressure on Robinhood's crypto business: Q1 crypto revenue fell 47% year-over-year to $134 million, and crypto notional trading volume dropped 48% to $24 billion. The company now serves approximately 28 million funded accounts and continues global expansion, including launching in Canada, securing a MAS license in Singapore, and preparing European perpetual contracts for commodities, ETFs, and forex, as well as crypto trading services in the UK.
Protocols Rally Around Robinhood Chain, dYdX 'Strikes Out Alone' Sparks Controversy
Leveraging its vast user base, major protocols including Uniswap, 1inch, Lighter, Morpho, Chainlink, BitGo, Ethena, and EtherFi announced integration with Robinhood Chain, covering trading, liquidity, lending, oracles, custody, and cross-chain services. However, the dYdX Foundation's announcement of a new DEX called Arcus ignited community backlash. Arcus is built on Robinhood Chain and supports 95 tokenized stocks, perpetual contracts, and major crypto assets, with plans to allow tokenized stocks and crypto as perpetual collateral, as well as pre-IPO equity trading for private companies like OpenAI. Arcus is currently in beta, with a full launch expected later in 2026.
The core of community discontent: as a product from the dYdX team, Arcus did not deploy on dYdX Chain but chose an entirely different infrastructure. dYdX founder Antonio explained in an open letter that running dYdX Chain forced constant trade-offs between performance, user experience, and decentralization, while competitors gained market share with faster execution, simpler products, and deeper liquidity. The decision to use Robinhood Chain was largely driven by access to its ~27.7 million funded accounts for immediate user base and liquidity; Arcus also received strategic investment from Robinhood Crypto.
However, community members worried that development focus, product resources, and market attention would shift toward Arcus, potentially cannibalizing the dYdX brand. With Arcus' potential token launch expectations, traders and liquidity might migrate from dYdX Chain, diluting DYDX token value. The dYdX Foundation responded that its commitment to supporting the dYdX protocol and community governance remains unchanged. dYdX Chain operates normally; deposits, withdrawals, staking, and governance functions are unaffected. DYDX governance and staking mechanisms remain intact, with staking rewards still distributed in USDC. Community treasury and reward funds remain fully controlled by DYDX holders via governance. Antonio also pledged that if Arcus issues a token, a portion will be reserved for the dYdX community, and access will be prioritized for dYdX traders. Despite these assurances, market sentiment worsened, and DYDX dropped approximately 40.7% intraday.
Overall, Robinhood's ambition extends far beyond offering a blockchain infrastructure. By combining massive user traffic, mature brokerage capabilities, and global compliance, Robinhood aims to transform itself from an internet broker into a next-generation global financial gateway via Robinhood Chain. Whether this vision becomes reality remains to be tested by the market.