Woofun AI reports that Robinhood announced the launch of its Layer 2 blockchain, Robinhood Chain, alongside a suite of crypto products including tokenized stocks, on-chain lending, and AI trading capabilities, signaling an aggressive push into global business expansion. The market responded with immediate bullish sentiment, propelling Robinhood's stock price up 8.35% to $108.6, a valuation that represents a near six-month high for the company.

In a sector characterized by intense consolidation, the new chain has rapidly attracted leading protocols, yet this momentum has simultaneously ignited a contentious debate within the decentralized finance community. The launch event, titled "The World is Flat", took place in London on July 2, where the company outlined its strategic pivot toward on-chain finance, AI-driven trading, and broader global expansion. This gathering underscored Robinhood's ambition to construct a comprehensive global financial infrastructure rather than merely offering a niche trading venue.

The centerpiece of the event was the official public mainnet launch of Robinhood Chain, which is built on the Arbitrum Orbit framework. Following months of rigorous testing, the network is now operational, designed to seamlessly connect Robinhood's existing user base with on-chain applications while providing developers with a plug-and-play environment for DeFi construction. Official documentation positions the chain specifically for institutional-grade applications, featuring an AI-native architecture optimized for the complex infrastructure requirements of real-world assets (RWA). This technical foundation aims to bridge the gap between traditional finance and the decentralized ecosystem.

Surrounding this core infrastructure, Robinhood has expanded its product matrix to cover diverse trading and yield scenarios. In the realm of tokenized stocks, the Robinhood Wallet now supports features accessible across 120 countries and regions globally. Users can execute trades via decentralized exchanges such as Uniswap, Rialto, Lighter, 1inch, and Arcus directly on the Robinhood Chain. These assets can subsequently serve as collateral for lending in DeFi protocols or be deployed into liquidity pools to generate yields. While this functionality was previously restricted to the European market, its global rollout is driven by surging demand for tokenized assets and the intensifying competition between traditional and crypto-native trading platforms.

Furthermore, the platform has introduced on-chain perpetual contract features within the Robinhood Wallet, offering investors a novel channel to trade stocks, commodities, and other assets outside standard market hours. To stimulate early adoption, the company is implementing a robust incentive structure that includes 90 days of fee waivers, gas subsidies, and point-based rewards. This aggressive approach aims to lower the barrier to entry for users transitioning from centralized to decentralized perpetual trading environments.

On the yield generation front, Robinhood Earn is gradually opening to U.S. users, marking the company's first decentralized lending product integrated directly into its main application. Participants can deposit the USDG stablecoin into self-custody wallets to target an annualized yield of approximately 7%. This product leverages Morpho's underlying lending infrastructure and is backed by a consortium of DeFi protocols including Steakhouse, Ethena, Spark, and Maple. Crucially, an insurance mechanism has been introduced to mitigate risk exposure, addressing a primary concern for institutional and retail participants alike.

Simultaneously, Robinhood is extending its proprietary AI trading capabilities to on-chain scenarios through the launch of the crypto version of Agentic Accounts. Eligible U.S. users can now access advanced AI models to set specific risk control parameters and funding boundaries, allowing the system to autonomously execute market scans and trading strategies. This feature mirrors similar tools previously deployed in the company's stock and options divisions, effectively bringing algorithmic sophistication to the decentralized asset class.

These strategic expansions occur against a backdrop of significant pressure on Robinhood's crypto revenue streams. In the first quarter, crypto revenue plummeted 47% year-on-year to $134 million, while nominal trading volume in the crypto sector dropped 48% year-on-year to $24 billion. Facing this deceleration, the company is urgently seeking new growth engines to sustain its trajectory. With a user base of approximately 28 million, Robinhood is aggressively advancing its overseas market layout, having officially launched in the Canadian market, secured a MAS capital market services license for its Singapore subsidiary, and planned the rollout of commodity, ETF, and forex perpetual contracts in Europe, with UK crypto trading services imminent.

Woofun AI data shows that major crypto protocols including Uniswap, 1inch, Lighter, Morpho, Chainlink, BitGo, Ethena, and EtherFi have announced integrations with Robinhood Chain, covering critical sectors such as trading, liquidity, lending, oracles, custody, and cross-chain functionality.

However, the integration of dYdX's new decentralized exchange, Arcus, has triggered a significant controversy. On July 2, the dYdX Foundation revealed a partnership to launch Arcus on Robinhood Chain, a platform designed to support trading for 95 types of tokenized stocks, perpetual contracts, and mainstream crypto assets. The roadmap includes using these assets as collateral for perpetual contracts and opening Pre-IPO equity trading for private companies like OpenAI, with a beta version currently live and an official launch targeted for late 2026.

The core of the controversy lies in the architectural decision: Arcus, a flagship product from the dYdX team, is not built on the dYdX Chain but is instead deployed on Robinhood Chain as an independent product and infrastructure. In an open letter, dYdX founder Antonio explained that operating the dYdX Chain revealed the inherent difficulty of balancing performance, user experience, and decentralization. He noted that competitors were capturing market share through faster execution speeds, simpler product experiences, and deeper liquidity pools. Synthesizing feedback from past product generations and current DEX pain points, the team concluded that launching Arcus on an established, high-performance chain was the optimal path forward.

Antonio disclosed that the selection of Robinhood Chain was primarily driven by user and liquidity considerations, citing Robinhood's 27.7 million funded accounts as a critical asset for providing Arcus with an immediate user base and liquidity depth.

Furthermore, Arcus has secured strategic investment from Robinhood Crypto, cementing the partnership. Despite these strategic justifications, the announcement sparked immediate dissatisfaction within the dYdX community. Critics argue that the core team pivoting to a new brand risks shifting development resources, product focus, and market attention away from the original dYdX protocol, potentially overshadowing or even replacing its brand value.

The concern is compounded by the history of dYdX's massive airdrop and the speculative expectations surrounding a potential token issuance for Arcus. Community members fear that traders and liquidity will migrate to the new platform, causing a decline in trading volume and activity on the dYdX Chain, which would dilute the value of the existing DYDX token. In response, the dYdX Foundation emphasized that its commitment to supporting the dYdX protocol and community governance remains unchanged. They clarified that the dYdX Chain continues to operate normally, with trading, deposits, withdrawals, staking, and governance functions fully intact. The governance and staking mechanisms for the DYDX token remain unaltered, with staking rewards continuing to be distributed in USDC, and assets in both the community and reward treasuries remaining under the full control of DYDX holders via governance.

Antonio further stated that as the founder and largest holder of DYDX tokens, his interests are deeply aligned with the community, asserting, "My interests are more deeply tied to dYdX than anyone else's." He promised that should Arcus issue tokens in the future, a portion would be reserved for distribution to the dYdX community, and that Arcus would prioritize access for existing dYdX traders. Nevertheless, these assurances failed to quell market anxiety. Following the announcement, the DYDX token experienced a precipitous drop of approximately 40.7% in a single day, reflecting a severe loss of confidence.

Ultimately, Robinhood's vision extends far beyond the provision of basic on-chain infrastructure. By leveraging its massive user traffic, mature brokerage business, and extensive global compliance layout, the company is attempting to use Robinhood Chain to expand its business boundaries. This strategic move accelerates its transformation from a traditional internet brokerage into a next-generation global financial entry point. Whether this ambitious pivot can successfully navigate the complexities of the crypto market and overcome the skepticism generated by partners like dYdX remains to be tested by future market dynamics.