Original title: Robinhood breaks into L2, focusing on RWA tokenization
Original author: KarenZ, Foresight News
In late January 2026, Robinhood CEO Vlad Tenev revisited the "GameStop short squeeze" that shocked Wall Street five years earlier on social media, and bluntly stated that if the real-time settlement capability of blockchain technology had been available at the time, the "pulling the plug" moment that angered countless retail investors could have been avoided.
Just two weeks later, Robinhood officially announced the launch of the Robinhood Chain public testnet based on Arbitrum, which will support the tokenization of real-world assets, including stocks, ETFs, private assets and other financial instruments.
Architecture Choice: Why Arbitrum?
In terms of architecture selection, Robinhood chose to build the Ethereum Layer 2 network Robinhood Chain based on Arbitrum Orbit, use Ethereum Blob to ensure data availability, and use ETH as the native gas token.
Robinhood understands that it doesn't need to reinvent the wheel. Arbitrum provides EVM compatibility, allowing existing DeFi protocols and wallet infrastructure to be migrated at near-zero cost. More importantly, Arbitrum Orbit allows Robinhood to build a "private chain" that has independent governance and custom logic (such as compliance reviews) while sharing the robust security consensus of the Ethereum mainnet.
This is crucial for Robinhood, which needs to meet financial regulatory requirements. It can enforce compliance rules on-chain and restrict access to specific wallet addresses without leaving Ethereum, the largest reservoir of funds.
More importantly, Robinhood had already piloted its tokenized stock business on Arbitrum as early as mid-2025. Launching its own blockchain on Arbitrum now is simply a natural progression.
Robinhood tests tokenized stocks
Prior to the launch of the Robinhood Chain testnet, Robinhood had already conducted an eight-month experiment with "tokenized stocks" in the European market.
At Consensus 2026, Robinhood Crypto General Manager Johann Kerbrat stated that Robinhood has launched approximately 2,000 tokenized stocks and ETFs in the European market, covering mainstream US stocks and ETFs. In the future, Robinhood plans to tokenize real-world assets such as private equity, real estate, and art to enable 24/7 trading and instant settlement.
According to Dune data, as of February 9th, the total value of Robinhood's tokenized shares was $15.1 million, with a cumulative trading volume of $74.43 million. Of course, this doesn't seem like a large sum.
The Truth Behind How Robinhood Tokenizes Stocks: How Does It "Put" US Stocks On-Chain?
• Underlying architecture : These tokenized shares were initially issued on Arbitrum and will be fully migrated to Robinhood Chain in the future.
• Inherent Attributes : These tokenized shares are not actual ownership certificates, but rather derivative contracts linked to the price of the underlying stock or ETP. This means that the tokens held by users will track the price movements of US stocks, but users do not have ownership of the corresponding shares.
• Issuance and Destruction Mechanism : When a user buys a US stock derivatives contract on Robinhood, the platform immediately generates a corresponding fungible token on the blockchain. This token represents your ownership of the contract, but it cannot be transferred to others. Once you close out the contract, the platform will directly destroy the corresponding token on the blockchain. The blockchain will be updated immediately, and the token will be completely invalidated.
• Dividend transparency : Although users do not own the shares, Robinhood provides dividend transparency. When the underlying stock pays dividends, the system automatically distributes the dividends to the investor's account in cash.
• Compliance Armor : Robinhood's ability to legally launch tokenized shares in Europe is attributed to its thorough regulatory preparation.
1. In June 2025, Robinhood acquired Bitstamp for $200 million in cash. The core value of this acquisition lay in Bitstamp's Slovenian MiFID Multilateral Trading Facility (MTF) license.
2. In mid-2025, Robinhood obtained the EU MiCA (Crypto Asset Market Regulation) license and the Lithuanian MiFID brokerage license.
For this reason, Robinhood's tokenized shares are held in custody by Bitstamp.
In terms of trading threshold and fees, these tokenized stocks have an extremely low entry barrier, requiring only €1 to invest. Trading is available 24/7, and users can place orders in advance outside of trading hours for automatic execution once the market opens. Regarding fees, Robinhood implements a zero-commission, zero-spread policy, charging only a 0.1% foreign exchange fee during the transaction process, minimizing user trading costs.
The "Second Half" of Financial Democratization
If Robinhood's first half was about gaining fame through "zero commission," then the second half is about "eliminating the barriers of time and space."
Robinhood Chain's core narrative lies in the comprehensive on-chaining of RWA (Real-World Assets). Its significance is reflected in three dimensions:
• 24/7 Market : Robinhood Chain brings the US stock market into the time dimension of crypto, freeing capital flows from the constraints of Wall Street's schedule.
• Instant settlement : Faster transaction confirmation speed.
• Asset composability : This is where the greatest potential lies. Imagine a future where you not only hold Tesla stock, but you can also deposit it into the Aave or Compound protocol as collateral to borrow USDC to buy coffee. The asset's attributes are completely unlocked. Of course, currently, stock tokens on Robinhood cannot be transferred to other digital wallets or trading platforms.
• Permissionless : Robinhood Chain is designed to be permissionless and developer-friendly. Anyone can interact with the network, build applications, and deploy smart contracts.
• Dissolving barriers to global investment : A Southeast Asian investor can participate in the growth dividends of top global companies with extremely low attrition costs through Robinhood Chain.
Unavoidable challenges and variables
However, several "high walls" still stand in the way to the New World:
• Legal dilemma regarding asset definition: Currently, it still exists in the form of "derivatives" rather than the direct tokenization of underlying securities, which still creates a gap in legal transparency.
The sole counterparty is Robinhood Europe: Robinhood Europe is the sole counterparty for this financial derivative, and this concentration of counterparties may pose potential liquidity and credit risks. However, official Robinhood documents indicate that Robinhood will purchase US stocks or ETFs on a 1:1 basis to hedge the risks of its US stock derivatives.
• Closed Ecosystem: Robinhood Chain currently exhibits strong centralized control characteristics. Its terms of service explicitly state that the platform can reset, restrict, or revoke access permissions for specific wallets at any time. While this design is necessary to meet compliance requirements, it also contradicts the core spirit of Web3 decentralization, leading to controversy over an "imbalance between compliance and decentralization." However, it's undeniable that decentralization and compliance are inherently conflicting to some extent. In recent months, Robinhood has been continuously expanding its open approach to tokenized shares.
• Resistance from third-party companies: OpenAI had previously publicly stated that it "does not recognize" the legitimacy of certain tokenized equity. This exposes the core contradiction of RWA: the determination of rights between third-party companies and the asset tokenizer (Robinhood).
summary
The launch of Robinhood Chain's testnet did not trigger a frenzy in the crypto industry, but it may be a revolution with profound and subtle implications.
When giants like Robinhood, deeply rooted in traditional retail finance, begin to seriously deploy blockchain technology and promote the on-chain representation and trading of real-world assets, the clear line between traditional finance and crypto finance is gradually being blurred and dissolved.
Whether Robinhood Chain will become a super gateway connecting traditional finance and Web3, or become a closed "island" due to an overemphasis on compliance, remains to be seen.
