Original author: Little Cake
Robinhood's crypto business is making money in a different way.
On October 27, after U.S. stock market hours, Robinhood announced its third-quarter earnings report. Crypto revenue increased by 20% quarter-on-quarter to $120 million. The Robinhood Chain, which launched its mainnet on July 1, contributed $26 million in its first quarter; excluding this portion, crypto trading revenue decreased by 6% quarter-on-quarter to $94 million, with total crypto revenue still down 55% compared to the same period last year.
All the growth came from the new chain, while the old business is shrinking.
Where did the $26 million come from?
This is the first complete quarter since Robinhood Chain launched its mainnet. From July 1 to the end of September, this Arbitrum-based Layer 2 chain processed over $80 billion in DEX trading volume, generating over $50 million in on-chain fees, of which $26 million is counted as Robinhood's crypto revenue.
Excluding the contribution from Robinhood Chain, traditional crypto trading revenue was only $94 million, down about 6% quarter-on-quarter.
Looking at on-chain data, the activity on this chain is highly concentrated: a 12-day frenzy from August 30 to September 10 contributed 74% of the quarter's fees. During this period, daily on-chain trading volume once surpassed $1.5 billion, with daily fees exceeding Ethereum's mainnet and Base, briefly ranking first across the entire network.
What drives all of this is not the tokenized stocks and RWA envisioned by Vlad Tenev, but Meme Coins.
In less than three weeks since its launch, Robinhood Chain's daily active addresses exceeded those of Coinbase's Base, with over 80% of DEX trading volume being speculative in Meme Coins.
Of the $50 million in on-chain fees, Robinhood only recognized $26 million in revenue, with most of the remainder going to the Arbitrum DAO's share and on-chain application layer. This monetization rate is about 50%, which is not high, but for a new chain that has been online for only three months, it is already a substantial increment.
Trading income is shrinking
Pulling the focus back from the chain to the app, the situation is not optimistic.
Crypto trading revenue plummeted by 55% year-on-year, and its proportion of total company revenue fell from the previous year's high to 8.4%. Even though trading volume rose from $40 billion in Q2 to $50 billion in Q3, revenue actually shrank, indicating that the monetization efficiency per transaction is continuously declining.
Competition and pressure on fee rates are evident.
Crypto trading is no longer a cake solely for Robinhood; Coinbase, various DEXs, and an increasing number of brokers are all competing for retail users' trading volume.
Prediction markets are the new engine
The real growth story lies in event contracts (prediction markets). Q3 revenue reached $173 million, growing over six times year-on-year and up 11% quarter-on-quarter, exceeding crypto trading revenue for two consecutive quarters.
Robinhood currently has 14 business lines with annualized revenue exceeding $100 million; the three new ones added in 2026 are Rothera (self-built prediction market exchange), credit cards, and Robinhood Legend (premium trading platform).
This transformation is interesting: two years ago, Robinhood's growth narrative was that of a "beneficiary of the crypto bull market"; now, crypto trading only accounts for 8% of total revenue, with prediction markets and options becoming the largest sources of trading revenue.
Overall earnings report: record revenue, declining profits
Total revenue for Q3 reached $1.42 billion, setting a new historical high, up 12% year-on-year. However, net profit was $476 million, down 14% year-on-year; diluted EPS was $0.51, down 16% year-on-year, below market expectations of $0.55.
Increasing revenue without increasing profit means that expanding operating costs are eroding profit margins.
In the past two years, Robinhood has rapidly expanded new business lines: self-built chains, acquiring Bitstamp and WonderFi, launching lending products Robinhood Earn, and obtaining prediction market licenses. These investments began to reflect on costs in Q3.
CFO Shiv Verma emphasized that net deposits in October have surpassed $13 billion (of which the Dell family injected $6 billion into Trump Accounts), and the number of Gold members reached a record 5.2 million. User and asset metrics continue to grow, but the market clearly does not accept the slowdown in profits.
What does this mean for the crypto industry?
Robinhood's earnings report reflects a larger trend: for traditional financial platforms, "trading coins" is becoming increasingly difficult to profit from, but "building chains" is opening new revenue windows.
The $26 million revenue from Robinhood Chain directs users from in-app matchmaking transactions to DEX transactions on-chain, shifting from a trading commission model to a fee-sharing model based on chain infrastructure. The former is squeezed by market cycles and fee wars, while the latter rises alongside increasing on-chain activity.
This is consistent with the logic of Coinbase launching the Base chain. The difference is that: to date, Base has not directly contributed visible revenue, while Robinhood Chain generated measurable GAAP revenue in its first quarter of launch.
The problem is also clear; the bulk of Q3's on-chain revenue came from a 12-day frenzy of Meme coins, and whether such explosive activity can be sustained will directly determine whether Robinhood Chain is a true revenue engine or a high-volatility cyclical add-on.
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