Robinhood (HOOD) is facing a slowdown in its blockchain activities as daily transactions on the Robinhood Chain have plummeted by 42%, averaging 6.2 million from October 2 to October 8. This marks a sharp decline from the 10.8 million transactions recorded in mid-September.
The latest figures also indicate a 20% drop from the previous week, reflecting concerns about user engagement on the platform. Daily active addresses have decreased by 31%, now standing at approximately 322,000. However, it’s important to note that this does not necessarily equate to a 31% reduction in users, as a single individual may control multiple wallets.
Automated trading programs, or bots, contribute significantly to transaction volumes, generating thousands of trades independently. The Robinhood Chain, launched in July, was designed to enable users to trade tokens and utilize lending features tied to Ethereum, with plans for continuous trading of tokens linked to stocks and funds.
Spot Trading Volume Declines While Deposits Remain Steady
During the past week, spot trading volumes on the chain fell to $7.45 billion, reflecting a 21% decrease from $9.46 billion. Notably, Uniswap accounted for approximately 77% of this volume.
In contrast, the preceding month had shown more promising signs, with transaction volumes near their peak despite a staggering 97% reduction in fees. While the trading atmosphere has cooled, deposits in lending and trading applications have increased by 2%, now totaling $1.04 billion.
The supply of stablecoins has also seen a slight uptick to around $1.10 billion, suggesting that traders are opting to hold their funds on the chain, indicating a cautious wait-and-see approach that could be detrimental to momentum.
Interestingly, the perpetual futures market appears to be an outlier, with seven-day trading volume rising by 26% to approximately $7.35 billion. Perpetual trading was introduced through Lighter alongside the mainnet launch in July, complementing existing spot trading and lending features.
Fee Structures Adjust Amid Ongoing Promotions
Network fees have substantially decreased, averaging about $65,000 per day, a drop of 39% from the previous week. This decline is particularly stark compared to the $8 million collected on one of the busiest days in early September.
According to analysts, Robinhood retains around 90% of the network fees, so the falling transaction numbers can have a significant impact on the company’s fee income. In a bid to stimulate trading activity, Robinhood’s Arcus began offering additional reward points for stock-token swaps made in Robinhood Wallet starting October 1. Moreover, the company has extended its fee promotion, which was initially set to conclude on September 29, now covering network fees on wallet swaps exceeding 50 cents until December 31.
This extension leaves Robinhood with less than three months to invigorate its $1 billion in deposits before users are responsible for their own fees. Current data indicates that a mere $46,000 in chain fees were recorded over the last 24 hours, while the total value locked on the chain hovers around $1.05 billion.
