Robinhood built a chain for stocks. Degens turned them into casino chips
A Saturday night
One Saturday night the Hims & Hers stock token traded on Robinhood Chain at $132; on Friday the shares had closed on the NYSE just under $29.
If you’re picturing a hack or a busted oracle, think again. Behind it was a memecoin called BONER, launched with the tagline “paired with HIMS,” which had spent ten days hoovering up most of the tokenized HIMS in existence. So little was left outside its pool that a few thousand dollars was enough to quadruple the price of a New York-listed stock.
To me that weekend says more about Robinhood Chain’s first two and a half months than any dashboard, and most people are reading it backwards.
But let’s step back. Mainnet went live on July 1: an Arbitrum layer 2 with ETH for gas, no native token, 100-millisecond blocks, Robinhood running the sequencer, and Uniswap, Chainlink and Morpho plugged in from day one. What they were selling was serious rails for real-world assets, meaning tokenized stocks you could trade around the clock, post as collateral and move anywhere.
Robinhood Chain at launch on July 1: an Arbitrum layer 2; gas in ETH, paid by Robinhood for ninety days for its wallet users, until September 29; no native token; a block every hundred milliseconds; Robinhood running the sequencer; Uniswap, Chainlink and Morpho integrated from day one.
To get people through the door, Robinhood is picking up the gas bill for its wallet users for 90 days. Mark September 29, because that’s when it ends.
What actually happened
At the end of August tokenized stocks made up roughly 6% of Robinhood Chain’s TVL, about $6 of every $100, and around 3% of trading volume.
Meanwhile the records kept falling: close to $1 billion in DEX volume on August 28, nearly $1.6 billion on September 1, stablecoin supply past a billion by mid-month. For a few days apps on the chain out-earned apps on Ethereum, and the network pulled in more daily revenue than Solana.
If you lived through Base in 2023 you’ve seen this film already, only here it runs at double speed and the house is comping the gas.
The back door
Every token on a DEX needs something to trade against, usually ETH or a stablecoin. In July a couple of launchpads on the chain, Long and Bankr, had a simple and slightly unhinged idea: swap that out for a tokenized stock. From then on you could launch a memecoin and pair it with Nvidia, Tesla or Apple, and within weeks came holder dividends paid in stock tokens and pools paired against whole baskets of shares.
What does that mean in practice? For anyone to buy the memecoin, someone has to put stock into the pool, and it sits there until somebody sells. Whoever is aping into the latest dog coin is buying Nvidia without knowing it.
Buyers of the memecoin go through its pool, where the other side is a tokenized stock rather than ETH or a stablecoin; the stock put into the pool stays there until somebody sells.
Robinhood spent months working out how to get retail into its tokenized stocks, and the degens answered the question for them, through the back door. In early September, across nineteen tickers, less than $9 million of stock parked in memecoin pools was driving $95 million a day in volume, so every dollar turned over more than ten times. Vlad Tenev, the CEO, has admitted as much in public: nobody at the company expected developers to mash memes, crypto and equities together like this.
Where it breaks
Only market makers authorized by Robinhood can mint stock tokens, and only on weekdays. Over the weekend the chain keeps trading but supply is frozen, so if a memecoin has already swallowed most of a ticker’s tokens, the on-chain price comes unglued from the exchange and nobody can drag it back until Monday. That’s exactly how HIMS played out. Come Monday the market makers minted fresh tokens, the price snapped back, and whoever bought over the weekend ate the difference.
Only market makers authorized by Robinhood create new stock tokens, Monday to Friday. None are created on Saturday or Sunday: the chain keeps trading on a frozen supply until Monday.
And the rest of DeFi leans on those same tokens. Chainlink says $29 while the DEX says $132. Lending protocols mark collateral at a price the chain itself is contradicting, and if a position needs liquidating on a Saturday the liquidator has nothing to buy. Meanwhile the dashboards count stock parked in memecoin pools as RWA adoption, though it has little to do with investing in stocks.
And who makes money from it? The launchpads. Pons, the chain’s answer to pump.fun, was out-earning the original on Solana by the end of August. Robinhood, much less so. Chain revenue topped $4 million a day in early September and had slid to barely one by the 11th.
The bill comes due
The second test lands on September 29, when the free gas runs out and we find out how much of the party survives once the guests are paying for their own drinks.
Robinhood Chain in six dates: on July 1 mainnet goes live; on August 28 close to a billion in DEX volume; on September 1 nearly $1.6 billion; on September 11 chain revenue slides to barely a million a day; on Monday, September 14, Robinhood promises in-kind redemption and voting rights, with no timeline; on September 29 the free gas runs out.
Robinhood set out to build the stock market on-chain, and so far it has built the arcade next door. It has also discovered that the arcade sends customers to the market, and now the open question is whether the market can handle the kind of customers the arcade brings with it.
turned over more than ten times a day
the words in this piece · 17
- collateral
- what you leave as security for the loan. if its price falls too far, they sell it to close the debt.
- dex
- a decentralized exchange: the trades happen between wallets, with nobody holding the funds.
- exchange
- the platform where cryptocurrency is traded. centralized if it holds the clients’ funds, decentralized if the trades happen onchain.
- gas
- what you pay the network to have an operation carried out: it changes with the traffic, not with the value of what you are doing.
- hack
- the theft of funds from a protocol or an exchange, through a flaw in the code or in the procedures.
- layer 2
- a network built on top of another one to take the load off it: it runs there and writes only the result underneath.
- lending
- borrowing onchain: you leave one coin as collateral and have another lent to you, at a rate that rises and falls with demand.
- market maker
- whoever keeps the book standing by posting orders to buy and to sell, and earns on the difference.
- oracle
- the service that brings the market price inside the contract. if it gets the price wrong, everything sitting on top of it gets it wrong.
- pool
- the common till the trades happen on: whoever puts their own coins into it takes a slice of the fees.
- retail
- the public of small investors, as against the professional operators.
- sequencer
- whoever puts the transactions in order on a second-layer network. today, almost always, one party alone.
- stablecoin
- a token built to be worth the same as a currency, usually the dollar. what changes is how it manages that: reserves at a bank, collateral onchain, hedges on derivatives.
- supply
- how many tokens exist. it can be the amount in circulation or the maximum possible.
- token
- the unit a protocol issues. it can serve to vote, to pay, to receive revenue, or to do nothing at all.
- tvl
- the total value deposited inside a protocol. it measures trust, not revenue.
- wallet
- the program that keeps the keys a transaction is signed with. it doesn’t hold the funds: it holds the permission to move them.