Robinhood Chain slowdown spreads from fees to trading as transactions fall more than 40%
In this news:
Key takeaways
- Robinhood blockchain daily transactions fell 42% from mid-September to early October.
- Network activity dropped to 6.2 million transactions a day during Oct. 2-8.
- Robinhood launched the Ethereum-connected chain in July to facilitate token trading and lending.
The slowdown on Robinhood’s blockchain has spread from fees to trading itself, with daily transactions down 42% from mid-September even as the brokerage keeps paying the network fees on token swaps worth more than 50 cents that customers make through its Robinhood Wallet app.
The network averaged 6.2 million transactions a day during Oct. 2–8, down from 10.8 million during Sept. 10–16, according to CoinDesk calculations using growthepie data. Activity fell 20% from the preceding week alone.
Robinhood blockchain launch and fee structure
Robinhood launched the chain in July to let people trade tokens, borrow and lend through applications connected to Ethereum, with plans for round-the-clock trading of tokens tied to stocks and funds.
Every transaction pays a network fee, and the apps built on top charge their own fees for trades and loans. Robinhood keeps roughly nine-tenths of the network fees, according to a Bernstein note last month, so fewer transactions means less income from the chain.
Shift from high volume to declining activity
When CoinDesk reported on Sept. 19 that fees had collapsed 97%, transactions were still near their highs and weekly trading volume was growing. Both have now turned lower.
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