Robinhood Chain's Launch Leaves Ethereum Behind in Gas Fee Revenue
Robinhood Markets launched the Robinhood Chain on July 1st as an Ethereum Layer-2 blockchain built on Arbitrum's technology. In just over two weeks, it has attracted $257.4 million in total value locked (TVL), surpassing many networks that have been operational for years. The chain also processed $4.5 billion in decentralized exchange (DEX) trading volume between July 13th and 20th.
The launch of the Robinhood Chain is a significant development, as it reduces congestion on Ethereum's main chain by processing transactions off-chain. However, this setup has an unintended consequence: nearly all of the revenue generated from gas fees goes to Arbitrum, with only a negligible amount flowing back to Ethereum.
According to Ark Invest analyst Lorenzo Valente, a mere 0.15% of the $816,000 in cumulative chain fees reported on Robinhood Chain through July 13th went to Ethereum. In contrast, Arbitrum received around $80,000 from these fees. This dynamic is set to worsen with the recent Fusaka upgrade to Ethereum, which added a fee floor that benefits Ether holders.
The economics of the Robinhood Chain make it unlikely for Ethereum to receive significant revenue from gas fees. A 'wholesale change in developer mindset and in ETH's token economics' would be required to address this issue, according to Bitwise's Max Shannon.