Robinhood's Blockchain Pays a 10th of its Revenue to Arbitrum

Retail brokerage Robinhood has been praised for its efforts to reduce intermediaries in financial transactions. However, recent developments reveal that its own blockchain, Robinhood Chain, pays a significant portion of its revenue to the Arbitrum ecosystem.

The arrangement is part of the Arbitrum Expansion Program, which sees 10% of net protocol revenue from chains built with Arbitrum's Orbit stack routed back to the ecosystem. In the case of Robinhood Chain, this translates to approximately $200,000 in revenue, or around 8-9% of its cumulative earnings of over $2 million since launch.

The payment is calculated on net revenue after operating costs and applies to sequencer profits. However, there's a possibility that Maximal Extractable Value (MEV) capture could also be included if Robinhood adopts Arbitrum's Timeboost mechanism.

This development has sparked questions about the true cost of using the Orbit stack for Robinhood Chain. While the company benefits from a pre-existing ecosystem and tooling, it pays a significant portion of its revenue to the Arbitrum treasury, controlled by ARB token holders.