The launch of Robinhood Chain triggers an industry earthquake: gathering top protocols, but leaving dYdX in a deep pit

Author: Nancy, PANews

On the eve of the second quarter earnings report, Robinhood announced the launch of its L2 chain, Robinhood Chain, and simultaneously introduced several crypto products including tokenized stocks, on-chain lending, and AI trading, while accelerating its global business expansion. Following the announcement, the market reacted positively, with Robinhood's stock price rising 8.35% to $108.6, reaching a nearly six-month high.

In the highly monopolized L2 sector, backed by Robinhood's massive user traffic and mature financial business, Robinhood Chain quickly gathered a number of leading crypto protocols, sparking an unexpected community controversy.

Self-built L2 launches mainnet, multiple products build on-chain financial entry

After several pre-heating tweets, Robinhood held a launch event titled "The World is Flat" in London on July 2, announcing its latest strategic layout around on-chain finance, AI trading, and global expansion, further showcasing its ambition to build global financial infrastructure.

At this launch event, the most market-attended was its Layer2 chain, Robinhood Chain. Built on Arbitrum Orbit, the chain officially launched its public mainnet after several months of testing, which will directly connect Robinhood's on-chain users and provide developers with a plug-and-play DeFi development environment. According to the official description, Robinhood Chain is positioned for institutional-level applications, AI-native architecture, and is specifically optimized for the blockchain infrastructure of real-world assets (RWA).

Around this chain, Robinhood simultaneously expanded its on-chain product matrix, covering trading and yield scenarios.

In terms of tokenized stocks, Robinhood Wallet has added relevant features, covering over 120 countries and regions worldwide. Users can trade through DEXs such as Uniswap, Rialto, Lighter, 1inch, and Arcus on Robinhood Chain, and can further participate in lending as collateral assets in DeFi scenarios or enter liquidity pools to earn yields. This feature was previously launched only in the European market, and its further expansion to the global market is driven by the rapidly growing demand for tokenized assets and the ongoing competition between traditional and crypto trading platforms.

In the on-chain perpetual contract field, Robinhood Wallet has also launched relevant features, providing investors with a new channel to participate in trading stocks, commodities, and other assets outside traditional market trading hours. To enhance user participation willingness, Robinhood is initially offering 90 days of fee waivers and gas subsidies, as well as point incentives.

In terms of yield products, Robinhood Earn, aimed at U.S. users, is gradually opening up, which is its first decentralized lending product within the main application. Users can deposit USD stablecoin USDG into a self-custody wallet, expecting to earn an annualized yield of about 7%. This product is supported by Morpho's underlying lending infrastructure and has the backing of several DeFi protocols including Steakhouse, Ethena, Spark, and Maple, while also introducing an insurance mechanism to reduce risk exposure.

Meanwhile, Robinhood is extending its AI trading capabilities to on-chain trading scenarios, launching the crypto version of Agentic Accounts. Eligible U.S. users can access AI models and set risk control parameters and funding boundaries, with AI autonomously executing market scans and trading strategies. Prior to this, Robinhood had already introduced similar tools in its stock and options business.

This series of expansion actions is built against the backdrop of Robinhood's crypto business facing continued pressure. In the first quarter, its crypto revenue fell 47% year-on-year to $134 million, and the nominal trading volume in crypto dropped 48% year-on-year to $24 billion. Faced with the slowdown in crypto business growth, Robinhood urgently needs to find new growth engines.

In terms of globalization, the company has covered about 28 million users and continues to advance its overseas market layout, including officially launching in the Canadian market, obtaining a MAS capital market services license for its Singapore subsidiary, planning to launch commodity, ETF, and forex perpetual contracts in Europe, and soon opening crypto trading services in the UK.

Gathering crypto protocols, dYdX's "new start" raises doubts

With its large user base, leading crypto protocols such as Uniswap, 1inch, Lighter, Morpho, Chainlink, BitGo, Ethena, and EtherFi have announced their integration with Robinhood Chain, covering multiple core sectors including trading, liquidity, lending, oracles, custody, and cross-chain.

However, the new DEX Arcus launched by dYdX has sparked controversy.

On July 2, the dYdX Foundation announced a partnership with Robinhood to launch the decentralized trading platform Arcus based on Robinhood Chain. This platform will support trading of 95 types of tokenized stocks, perpetual contracts, and mainstream crypto assets, and plans to further support tokenized stocks and crypto assets as collateral for perpetual contracts, while also opening up Pre-IPO equity trading for popular private companies like OpenAI. Currently, Arcus has launched a beta version, expected to officially launch in late 2026.

What has sparked community discussion is that, as a new product launched by the dYdX team, Arcus is not built on dYdX Chain but has chosen to deploy on Robinhood Chain and operates as an independent product and infrastructure.

In response, dYdX founder Antonio explained in an open letter that the team gradually realized during the operation of dYdX Chain that building a decentralized public chain means constantly balancing performance, user experience, and decentralization, while competitors are capturing market share with faster execution speeds, simpler product experiences, and more abundant liquidity. Combining the experience accumulated from past generations of dYdX products, user feedback over the past few months, and the current core pain points of DEXs, the team ultimately decided to launch Arcus.

Antonio revealed that the choice of Robinhood Chain was largely due to considerations of users and liquidity, as Robinhood has about 27.7 million funded accounts, which can provide Arcus with an existing user base and liquidity. In addition, Arcus has also received strategic investment from Robinhood Crypto, further deepening the cooperation between the two parties.

However, this news quickly sparked dissatisfaction within the dYdX community. Many community members believe that the original core team of dYdX starting a new brand means that development resources, product focus, and market attention may shift towards Arcus, even posing a risk of overshadowing or replacing the brand value of dYdX. Additionally, given that dYdX previously launched one of the largest airdrops in the industry, and the potential expectations for Arcus's token issuance, this will attract traders and liquidity to migrate to the new platform, leading to a decline in trading volume and activity on dYdX Chain, further diluting the value of the DYDX token.

In response, the dYdX Foundation emphasized that its responsibilities to support the dYdX protocol and community governance will not change. dYdX Chain remains unaffected, and functions such as trading, deposits, withdrawals, staking, and governance are operating normally, with the governance and staking mechanisms of the DYDX token remaining unchanged, and staking rewards continuing to be distributed in USDC, with assets in the community treasury and reward treasury still fully controlled by DYDX holders through governance.

At the same time, Antonio stated that as the founder of dYdX and the largest holder of DYDX tokens, his interests are highly aligned with the dYdX community. "My interests are more deeply tied to dYdX than anyone else's." He also promised that if Arcus issues tokens in the future, a portion of the tokens will be reserved for distribution to the dYdX community; in addition, Arcus will also prioritize access for dYdX traders.

However, these responses seem to have not alleviated market concerns. After the announcement of the new product, the DYDX token fell approximately 40.7% in a single day.

Overall, Robinhood's ambitions go far beyond providing a piece of on-chain infrastructure. Leveraging its massive user traffic, mature brokerage business, and global compliance layout, Robinhood is attempting to use Robinhood Chain to expand its business boundaries and accelerate its transformation from an internet brokerage to the next generation of global financial entry. Whether this ambition can become a reality still needs to be tested by the market.