Robinhood's proprietary chain generates $26 million in quarterly revenue, while crypto trading fees decline

Written by: Xiaobing

Robinhood's crypto business is shifting to a new way of generating revenue.

After the U.S. market close on October 27, Robinhood released its third-quarter earnings report. Crypto revenue rose 20% quarter-over-quarter to $120 million. Robinhood Chain, whose mainnet launched on July 1, contributed $26 million in its first quarter. Excluding this, crypto trading revenue fell 6% quarter-over-quarter to $94 million, and total crypto revenue remained 55% lower than the same period last year.

All growth came from the new chain, while the legacy business shrank.

Where did the $26 million come from?

This was the first full quarter after Robinhood Chain's mainnet launch. Launched on July 1, by the end of September, this Arbitrum-based L2 chain had processed more than $80 billion in DEX trading volume and generated 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 about 6% quarter-over-quarter.

On-chain data show that activity on the chain was highly concentrated: a 12-day surge from August 30 to September 10 contributed 74% of the quarter's fees. During that period, daily on-chain trading volume briefly exceeded $1.5 billion, and daily fees surpassed Ethereum mainnet and Base, briefly ranking first across the network.

What drove all of this was not the tokenized stocks and RWA envisioned by Vlad Tenev, but meme coins.

Less than three weeks after launch, Robinhood Chain's daily active addresses surpassed Coinbase's Base, and more than 80% of its DEX trading volume came from meme coin speculation.

Of the $50 million in on-chain fees, Robinhood recognized only $26 million in revenue, with most of the remainder going to Arbitrum DAO revenue sharing and the chain's application layer. This monetization rate of about 50% is not high, but for a new chain only 3 months old, it already represents a meaningful incremental gain.

Meme coin trading revenue is shrinking

Pulling the focus from on-chain activity back to the app, the picture is not optimistic.

Crypto trading revenue fell 55% year-over-year, and its share of total company revenue slid from its high a year ago to 8.4%. Even though trading volume rose from $40 billion in Q2 to $50 billion in Q3, revenue declined, indicating that monetization efficiency per trade continued to fall.

Competition and fee pressure are obvious.

Crypto trading is no longer Robinhood's exclusive pie; Coinbase, various DEXs, and a growing number of brokers are competing for retail users' trading volume.

Prediction markets are the new engine

The real growth story lies in event contracts (prediction markets). Q3 revenue was $173 million, more than 6x year-over-year and up 11% quarter-over-quarter, surpassing crypto trading revenue for a second consecutive quarter.

Robinhood currently has 14 business lines with annualized revenue exceeding $100 million. The three added in 2026 are Rothera (proprietary prediction market exchange), credit cards, and Robinhood Legend (premium trading platform).

This shift is notable: two years ago, Robinhood's growth narrative was as a 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 revenue.

Overall earnings: record-high revenue, declining profit

Total Q3 revenue reached $1.42 billion, a record high and up 12% year-over-year. However, net income was $476 million, down 14% year-over-year; diluted EPS was $0.51, down 16% year-over-year and below market expectations of $0.55.

Revenue is growing while profit is not, as expanding operating expenses erode margins.

Over the past two years, Robinhood has aggressively expanded new business lines: building its own chain, acquiring Bitstamp and WonderFi, launching the lending product Robinhood Earn, and obtaining a prediction market license. These investments began showing up in costs in Q3.

CFO Shiv Verma emphasized that net deposits in October surpassed $13 billion (with the Dell family injecting $6 billion into Trump Accounts), and Gold membership reached a record 5.2 million. Both users and assets continue to grow, but the market is clearly not convinced by slowing profits.

What does this mean for the crypto industry?

Robinhood's earnings report reflects a broader trend: for traditional financial platforms,Earning money from crypto speculation is becoming increasingly difficult, while building chains is opening new revenue opportunities.

Robinhood Chain's $26 million in revenue came from directing users from in-app order-matching trading to on-chain DEX trading, shifting from a trading-commission model to a fee-share model for chain infrastructure. The former is squeezed by market cycles and fee wars, while the latter rises with on-chain activity.

This follows the same logic as Coinbase's push for Base. The difference is:Base has not yet directly contributed visible revenue, while Robinhood Chain generated measurable GAAP revenue in its first quarter after launch.

The issue is also clear: most of Q3 on-chain revenue came from a 12-day meme-coin frenzy. Whether such explosive activity can be sustained will directly determine whether Robinhood Chain is a true revenue engine or a highly volatile, cyclical add-on.

Source: 深潮 TechFlow