With so many technology stacks, why did Robinhood choose Arbitrum to launch its chain?

Author: Haotian

A brief interpretation of the news about @RobinhoodApp planning to build layer2 on Arbitrum:

1) From a technical perspective, Robinhood's choice to align with Arbitrum's Nitro is no different from Coinbase's alignment with Optimism's OP Stack technology stack. However, the performance of Base has proven a rule: the success of a technology stack does not equate to the success of its parent chain. The rise of Base is more a result of Coinbase's brand effect + compliance resources + user traffic, which in some ways provides Robinhood with certain guidance in its move to Arbitrum. This means that, in the short term, it cannot prove that the price of $ARB is undervalued (compared to the performance of $OP), but in the long term, once Robinhood successfully navigates the "U.S. stock on-chain" scenario it is targeting, it may change the awkward situation where layer2 is seen as an "Ethereum layer1 expansion solution with technology but no implementation." This could open up an unprecedented path for mass adoption in both the L1 and L2 ecosystems of Ethereum.

2) Coinbase's approach to layer2 is more about general layer2 solutions, primarily utilizing past DeFi, GameFi, MEME, and other transaction-oriented scenarios. In contrast, Robinhood may take a different approach, moving towards a specialized layer2 direction, specifically customizing a set of on-chain infrastructure for traditional finance? Although OP-Rollup can achieve sub-second transaction confirmation times, the security of such transactions still falls within the optimistic Rollup category of 7-day fraud verification. Robinhood's new layer2 will need to handle stock T+0 settlement, real-time risk control, compliance requirements, and other characteristics, which may require deep customization at the virtual machine level, consensus mechanism, and data structure of layer2, fully tapping into the potential of layer2 expansion solutions.

3) Arbitrum's technical solution has certain mature aspects compared to Optimism: Nitro's WASM architecture has higher execution efficiency, providing a natural advantage for handling complex financial calculations; Stylus supports multi-language development of high-performance contracts, capable of carrying some heavy computational tasks of traditional finance; BoLD addresses malicious delay attacks, reinforcing the security of optimistic verification; Orbit supports customized Layer3 deployment, offering sufficient flexibility for development features. You see, if Arbitrum is chosen, there must be a reason for it; its technical advantages seem to align with the stringent "customization" requirements of traditional finance for infrastructure, unlike OP Stack, which only needs to run effectively. This makes a lot of sense, as the maturity and specialization of technology will determine success or failure in the face of the ultimate challenge of supporting trillion-level TradFi businesses.

4) The on-chain U.S. stock market and coin-stock exchanges are no longer the "token issuance narratives and games" commonly used in the traditional crypto space. They face not only speculative users who completely disregard whether the project products are delivered or whether the experience is smooth, but also the absolute intolerance of users familiar with traditional financial product lines when network gas fluctuations cause congestion and transaction delays. These traditional finance users are accustomed to millisecond-level responses, 24/7 uninterrupted service, and seamless T+0 settlement experiences. More critically, they are often backed by institutional funds, algorithmic trading, and high-frequency strategies, which have extreme demands for system stability and performance. This means that the user base Robinhood's layer2 aims to serve will be completely different, presenting a very challenging task.

In summary, Robinhood's significance in laying out layer2 will be substantial. It is no longer just another new player in the layer2 technology stack; rather, it is a hardcore experiment to validate whether crypto infrastructure can support the core operations of the modern financial system. If the experiment succeeds, the subsequent digital reconstruction of the entire trillion-level TradFi market, including bonds, futures, insurance, and real estate, will accelerate. Of course, in the long run, this will directly benefit the application scenarios of the entire Ethereum L1+L2 ecosystem's technical infrastructure and will redefine the value capture logic of Layer2.