Robinhood Chain is hot, but is it profitable?
Source: Blockworks Research Authors: Ryan Graham and Sam Schubert Compiled and organized: BitPushNews highlights The crypto business is getting cold: Although Robinhood's overall performance hit a record high, its crypto business is shrinking. Q2 Crypto business revenue fell 38% year over year to $100 million, accounting for only 8% of total revenue; retail crypto trading volume fell 36% year over year, and the share of crypto assets in total custodian assets (AUC) also fell to a record low of 7%. Robinhood Chain (Robinhood Chain) started strongly: Robinhood Chain had one of the strongest starts of the L2 expansion network in recent years, generating $3.6 million in real economic value (REV) in July, accounting for 38% of all L2 chain revenues counted by growthepie, surpassing mature networks such as Polygon and Base. Meme coins dominated early activity: Meme coins, not real world assets (RWA), drove Robinhood Chain's early activity. Meme coins accounted for 51% of July spot trading volume, while RWA only accounted for 5%; and 48% of RWA trading volume occurred in the “Meme Coin + RWA” liquidity pool. Monetization opportunities lie in the application layer: Robinhood's clearest monetization opportunities lie above the infrastructure layer. USDG has generated around $10.5 million in annualized interest income; Morpho has proven the great value of direct distribution of Robinhood's main app; while Lighter only uses the Robinhood Wallet (Robinhood Wallet) partnership, accounting for only 0.2% of its total perpetual contract trading volume. The company's overall performance has yet to be boosted: Robinhood Chain is currently unable to substantially improve Robinhood's underlying performance. Its total known annualized revenue is only $54.8 million, which is equivalent to only 14% of Robinhood's annualized crypto revenue. For the Robinhood Chain to have a real impact, Robinhood needs to scale up USDG, monetize access to main apps, or use the chain as a traffic entry point to introduce high-value products. Robinhood's crypto business at the crossroads is probably no company that has managed to capture the rise of retail investors as successfully as Robinhood. It has become synonymous with retail investment, and its underlying business is booming as a result. In the second quarter of 2026, Robinhood reported quarterly revenue of $1.31 billion (a record high), up 32% year over year and 92% from Q2 2024. This strong momentum comes not only from its core stock and options trading business, but also from its ever-expanding product matrix. Robinhood now has 13 different lines of business, each generating more than $100 million in annualized revenue. In fact, almost all transaction-based business lines experienced double-digit year-on-year growth in the second quarter... well, with one exception: cryptocurrencies. The crypto business, which once accounted for more than one-third of Robinhood's revenue, has now shrunk to the point where it's almost negligible for the company. In the second quarter of 2026, only 8% of Robinhood's quarterly revenue came from cryptocurrencies, the lowest share since the third quarter of 2023. The crypto business's share of Robinhood's revenue pie has declined so much that event contracts (event contracts), which were only launched last year, generated more revenue in the second quarter ($156 million) than the crypto business ($100 million). This weakness goes far beyond the crypto business's declining share of Robinhood's revenue. Overall, its core user base is losing interest in cryptocurrencies. While the reason behind it isn't unique to Robinhood, the extent of its weakness is shocking. This is particularly evident in trading activities. In the second quarter of 2026, retail crypto trading volume on the Robinhood App was just $182 billion, down 36% year over year, to record...