In September, BTC has been hovering around the $78,000 mark. In August, it rose from $64,000 to $81,000, and then returned to $78,000 at the end of the month. The 25% increase in one month was bitten off on the first day of September. With the shadow of a 68% probability of interest rate hikes hanging over our heads, the market is watching the FOMC meeting on September 16 [1].
Another drama in the on-chain world is unfolding in the new territory of the so-called US retail investor stronghold. Robinhood Chain, an Ethereum L2 (layer 2 chain) that has only been online for two months, saw its daily DEX trading volume jump from $989 million to $1.595 billion from August 28 to September 1, a 61% increase in three days [1]. Even more exaggerated are the fees. The total value locked in DeFi on this chain is only $725 million, which is only about 13% of Solana, Base, and BSC, and 1.5% of Ethereum. However, the on-chain fees it generates in 24 hours reach $1.07 million, which is more than Ethereum plus Solana in the same period, making it the chain with the highest fees on the entire network. According to the economic model of DefiLlama, its daily retainable income is $963,000, which is 3 times that of the other mainstream public chains combined [2]. With such a small value locked, the fees are the highest on the entire network. Some people can't help but exclaim that the second season of DeFi Summer has arrived! (Note from ChainTeacher: DeFi Summer, the summer of DeFi, this term was originally invented to describe the period of crazy innovation of on-chain DeFi protocols from the middle to the end of 2020.) Robinhood!
Users first, then chain
There are hundreds of L2 chains on the market, and the technology is becoming more and more homogeneous. OP series, Arbitrum series, ZK series, modular, Rollup, DA, each is vying for performance, gas, and ecosystem subsidies. But after all this vying, most chains face the same dilemma: the chain is there, but where are the users?
Robinhood Chain plays a different game. It is users first, then chain. Robinhood is the home base of American retail investors, with 28 million registered users. Morgan Stanley just upgraded its rating from hold to overweight, and raised the target price from $124 to $150, because the monetization ability of the existing user base is underestimated by the market[4]. For the past decade or so, this company has been enticing American retail investors to buy and sell stocks on mobile apps. Now, it's channeling app users onto its blockchain, essentially moving an entire city's population into a newly built plaza. Other L2 blockchains build the plaza and wait for people to come; Robinhood has a ready-made pool of users (financial traffic) waiting to be brought onto the blockchain. This is a game-changer. The tipping point: welding stocks and memes together. Traffic alone isn't enough; you need something to make that traffic explode. Robinhood Chain's answer is welding tokenized stocks and meme tokens together. Robinhood, with its brokerage background, naturally has access to licenses and channels for tokenizing US stocks. Its chain supports 24-hour trading of tokenized stocks, and users can also pledge and mortgage these stock tokens. But what really ignited the traffic on the chain was another new species: meme tokens. Meme tokens are no longer paired with USDT and ETH, but are directly paired with US stock tokens such as NVDA and TSLA on the chain. Want to hype up NVIDIA? Just buy a meme token that is paired with NVIDIA tokens. Emotional hype and real asset anchoring, two narrative lines are twisted into one rope. The Artificial Inu on the chain rose by more than 110% in one day, and its market value exceeded 213 million US dollars [2]. Robinhood CEO Vlad Tenev said in a podcast that on-chain developers are creating many financial games that even the company itself did not think of, such as designing products such as "holding meme tokens can get stock token airdrops" [5]. This sounds like Versailles, but it highlights the uniqueness of Robinhood Chain: it is not a product designed by a company behind closed doors, but an ecosystem that a group of American retail investors have created on the chain with real money and a strong desire for speculation. Just like the early days of DeFi, it was noisy but real. Another tipping point is hidden in the payment. Media investigations have found that you can buy meme coins directly with a credit card in Robinhood Wallet. This transaction is encoded as "digital media" instead of crypto assets, bypassing the card organization's ban on crypto transactions and also accumulating points[3]. It is questionable how long this compliance loophole can be used, but it has indeed lowered the first threshold for retail investors to enter the market. When buying coins is as smooth as buying skin, the traffic is as continuous as tap water.
Observation Point: Why Arbitrum Takes Off
Robinhood Chain exploded, and the first thing to take off was Arbitrum's token ARB, which rose more than 33% in 24 hours[2]. Many people didn't understand: What does the Robinhood Chain's popularity have to do with ARB?
The reason is very simple. Robinhood Chain itself is built using Arbitrum's technology stack (Orbit). More importantly, there is a fee sharing mechanism: 10% of the fees generated by Robinhood Chain and other Arbitrum-based L2 will flow to the Arbitrum ecosystem, of which 8% will go into the treasury controlled by ARB holders, and 2% will be used for development funds[2]. In other words, the more frenzied the meme transactions on the Robinhood Chain are, the more ARB will be deposited into the treasury. This money can be used for ecosystem funding, buybacks, or staking rewards in the future. In the gold rush, the most stable business was selling shovels. Robinhood Chain was the gold miner, and Arbitrum was the shovel seller. The gold miners came and went, but the shovel sellers kept making money. ARB's 33% increase wasn't cheering for Robinhood Chain; it was the market pricing in a pipeline that continuously collects tolls. This story has a sequel in the Ethereum ecosystem. Robinhood Chain is part of the Arbitrum family, Coinbase's Base is part of the OP family, and the giants launching their own chains are all directing traffic to their chosen technology stacks. The battle for the underlying L2 architecture has escalated from technological routes to a fight for the giants' traffic entry points.
Chain's View
To judge whether a blockchain is good or bad, don't look at what it claims to do, look at what it actually does. What Robinhood Chain accomplished in two months was connecting tokenized stocks and meme speculation using the traffic of 28 million retail users. The greatest significance of this experiment is not that another L2 blockchain has become popular, but that for the first time, a traditional financial giant has moved its most valuable user traffic entirely onto the blockchain. Wall Street and the on-chain world have converged on this chain.
As for ARB's subsequent rise, Chain believes this is more like a signal: as the L2 landscape shifts from technological competition to traffic competition, those chains that control the real user entry point are the biggest variables in this war. Technology can be copied, but traffic cannot.
Of course, the road ahead is long and arduous. How long the meme craze will last, whether regulations will allow for tokenized stocks, and when the credit card loophole will be closed remain uncertain. At least for now, the market is paying real money for Robinhood Chain's traffic. Retail investors' actions always reflect their financial commitment.
JinseFinance