Robinhood's Proprietary Chain Generates $26 Million in Quarterly Revenue, Even as Crypto Trading Fees Decline

By Xiaobing

Robinhood’s crypto business is finding a new way to make money.

After the US stock market closed on October 27, Robinhood released its third-quarter earnings report. Crypto revenue increased by 20% quarter-over-quarter to $120 million. Robinhood Chain, which launched on the mainnet on July 1, contributed $26 million in its first full quarter; excluding this, crypto trading revenue decreased by 6% quarter-over-quarter to $94 million, meaning total crypto revenue remains 55% lower than the same period last year.

All growth comes from the new chain, while the legacy business is shrinking.

Where did the $26 million come from?

This was the first full quarter after Robinhood Chain launched on the mainnet. Since going live on July 1, this Arbitrum-based L2 chain processed over $80 billion in DEX trading volume through the end of September, 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 was only $94 million, down approximately 6% quarter-over-quarter.

On-chain data shows that activity on this chain is highly concentrated: 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 briefly surpassed $1.5 billion, with single-day fees exceeding both Ethereum mainnet and Base, momentarily reaching the highest in the entire network.

What drove this wasn’t the tokenized stocks and RWAs envisioned by Vlad Tenev, but memecoins.

In less than three weeks since launch, Robinhood Chain’s daily active addresses surpassed Coinbase’s Base, with over 80% of DEX trading volume driven by memecoin speculation.

Of the $50 million in on-chain fees, Robinhood recognized only $26 million in revenue, with most of the remainder flowing to the Arbitrum DAO revenue share and on-chain application layers. This monetization rate of roughly 50% isn’t particularly high, but it represents a substantial incremental gain for a chain that has been live for just three months.

Crypto Trading Revenue Is Shrinking

Taking the focus off-chain back to within the app, the situation is far from optimistic.

Crypto trading revenue plummeted 55% year-over-year, dropping its share of total company revenue from last year’s peak to 8.4%. Even though trading volume rose from $40 billion in Q2 to $50 billion in Q3, revenue actually contracted, indicating that the monetization efficiency per trade continues to decline.

The pressure from competition and fee reductions is evident.

Crypto trading is no longer a monopoly for Robinhood. Coinbase, various DEXs, and an increasing number of brokers are all vying 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, representing a year-over-year increase of over 6 times and a sequential growth of 11%, surpassing crypto trading revenue for two consecutive quarters.

Robinhood currently has 14 business lines generating over $100 million in annualized revenue, with three new ones added for 2026: Rothera (its self-built prediction market exchange), credit cards, and Robinhood Legend (the premium trading platform).

This shift is fascinating: two years ago, Robinhood’s growth narrative was “beneficiary of the crypto bull market.” Now, crypto trading accounts for only 8% of total revenue, while prediction markets and options are the largest sources of trading income.

Overall Financial Report: Record Revenue, Declining Profits

Total Q3 revenue hit a record high of $1.42 billion, up 12% year-over-year. However, net profit fell to $476 million, down 14% YoY; diluted EPS was $0.51, down 16% YoY, missing market expectations of $0.55.

Revenue growth is not translating into profit growth, as expanding operating expenses are eroding margins.

In recent years, Robinhood has aggressively expanded into new business lines: building its own chain, acquiring Bitstamp and WonderFi, launching the lending product Robinhood Earn, and securing prediction market licenses. These investments began impacting cost structures in Q3.

CFO Shiv Verma highlighted that net deposits surpassed $13 billion in October (including a $6 billion injection from the Dell family into Trump Accounts), and Gold members reached a record 5.2 million. User and asset base growth continues, but the market is clearly unconcerned with slowing profits.

What Does This Mean for the Crypto Industry?

Robinhood’s financial report reflects a broader trend: for traditional financial platforms, “trading crypto” is becoming increasingly unprofitable, but “building chains” is opening new revenue windows.

The $26 million in revenue from Robinhood Chain stems from redirecting users from internal matching transactions within the app to on-chain DEX trading, 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 alongside on-chain activity.

This logic aligns perfectly with Coinbase’s rollout of the Base chain. The difference is: Base has yet to directly contribute explicit revenue, whereas Robinhood Chain generated measurable GAAP revenue in its first quarter online.

The issue is also clear: the bulk of Q3 on-chain revenue came from a 12-day memecoin frenzy. Whether this explosive activity can be sustained will ultimately determine if Robinhood Chain is a genuine revenue engine or merely a highly volatile, cyclical add-on.