Robinhood's Proprietary Chain Generates $26M in Quarterly Revenue as Crypto Trading Fees Actually Drop
By Xiaobing
Robinhood’s crypto business is finding new ways to generate revenue.
After US stock market close on October 27, Robinhood released its third-quarter earnings report. Crypto revenue grew 20% quarter-over-quarter to $120 million. Robinhood Chain, 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, and total crypto revenue remains 55% lower than the same period last year.
All growth comes from the new chain, while the old business is shrinking.
Where Did the $26 Million Come From?
This was the first full quarter since Robinhood Chain launched on mainnet. Launched on July 1, by late September, this Arbitrum-based L2 chain processed over $80 billion in DEX trading volume, generating more than $50 million in on-chain fees, of which $26 million was recognized as Robinhood’s crypto revenue.
Excluding Robinhood Chain’s contribution, traditional crypto trading revenue stood at just $94 million, down approximately 6% quarter-over-quarter.
On-chain data shows highly concentrated activity on this chain: a 12-day frenzy from August 30 to September 10 accounted for 74% of the quarterly fees. During this period, daily on-chain trading volume once surpassed $1.5 billion, with daily fees exceeding those of the Ethereum mainnet and Base, briefly ranking first across the entire network.
What drove this wasn’t tokenized stocks and RWAs envisioned by Vlad Tenev, but meme coins.
In less than three weeks after launch, Robinhood Chain’s daily active addresses surpassed Coinbase’s Base, with over 80% of DEX trading volume driven by meme coin speculation.
Of the $50 million in on-chain fees, Robinhood recognized only $26 million in revenue. The majority of the remainder went to payouts to the Arbitrum DAO and the on-chain application layer. This conversion rate hovers around 50%, which isn't particularly high, but for a chain that has been live for only three months, it represents a substantial incremental gain.
Crypto Trading Revenue is Shrinking
Shifting focus back to the app itself, the outlook isn't promising.
Crypto trading revenue plummeted 55% year-over-year, dropping from a peak last year to 8.4% of total company revenue. Even though trading volume rose from $40 billion in Q2 to $50 billion in Q3, revenue actually shrank, indicating a continuous decline in monetization efficiency per trade.
The pressure from competition and fee cuts is obvious.
Crypto trading is no longer a pie exclusively enjoyed by Robinhood; Coinbase, various DEX platforms, and an increasing number of brokers are all competing for retail user trading volume.
Prediction Markets Are the New Engine
The real growth story lies in event contracts (prediction markets). Q3 revenue reached $173 million, up more than six times year-over-year and 11% quarter-over-quarter, surpassing crypto trading revenue for two consecutive quarters.
Robinhood currently has 14 business lines generating over $100 million in annualized revenue. Three new additions expected in 2026 are Rothera (its self-built prediction market exchange), credit cards, and Robinhood Legend (the premium trading platform).
This shift is interesting: Two years ago, Robinhood’s growth narrative centered on being a beneficiary of the crypto bull market. Now, crypto trading accounts for just 8% of total revenue, with prediction markets and options serving as the largest sources of trading income.
Overall Earnings Report: Revenue Hits Record High, Profits Decline
Q3 total revenue reached $1.42 billion, setting a new record and growing 12% year-over-year. However, net profit came in at $476 million, down 14% year-over-year; diluted EPS was $0.51, down 16% year-over-year, falling short of market expectations of $0.55.
Rising revenue without matching profit growth, expanding operating expenses are eroding profit margins.
Over the past two years, Robinhood has aggressively rolled out new business lines: building its own chain, acquiring Bitstamp and WonderFi, launching the lending product Robinhood Earn, and securing prediction market licenses. These investments are beginning to reflect on the cost side in Q3.
CFO Shiv Verma highlighted that net deposits exceeded $13 billion in October (including a $6 billion injection from the Dell family into Trump Accounts), and Gold membership hit a record 5.2 million. While users and assets continue to grow, the market is clearly unimpressed by the slowing profit growth.
What Does This Mean for the Crypto Industry?
Robinhood’s earnings report reflects a broader trend: for traditional financial platforms, “trading coins” is becoming increasingly difficult to monetize, while “building chains” is opening new revenue windows.
The $26 million in revenue from Robinhood Chain stems from redirecting users from in-app matching engines to on-chain DEX trades, shifting from a transaction commission model to a chain infrastructure fee-sharing model. The former is squeezed by market cycles and fee wars, while the latter rises naturally with on-chain activity.
This aligns with the logic behind Coinbase rolling out its Base chain. The difference lies in this: Base has yet to directly contribute explicit revenue, whereas Robinhood Chain generated measurable GAAP revenue in its very first quarter.
The issue is also clear: the bulk of on-chain revenue in Q3 came from a 12-day meme coin frenzy. Whether this explosive activity can sustain itself will directly determine whether Robinhood Chain becomes a genuine revenue engine or merely a highly volatile cyclical add-on.