Robinhood’s New Arbitrum Chain Bridges the Gap Between DeFi and Traditional Finance

Core Insights - Robinhood, valued at approximately $76 billion, is launching its own blockchain named Robinhood Chain, aiming to integrate traditional finance (TradFi) with decentralized finance (DeFi) [1] Group 1: Blockchain Launch and Features - Robinhood's new Layer 2 (L2) blockchain, announced on February 10, leverages Arbitrum's technology and is fully compatible with Ethereum, allowing for the tokenization of real-world assets (RWAs) [2] - The Robinhood Chain is powered by Arbitrum Orbit, which enhances performance, reduces fees, and ensures security through Ethereum, processing transactions in batches for efficiency [3] - The chain embeds compliance at the protocol level, ensuring regulatory adherence for tokenized assets like equities and ETFs, with over 1,000 tokenized assets already available in the EU [3] Group 2: Developer Access and Tools - Developers can access testnet-only assets in an Ethereum Virtual Machine (EVM) environment, utilizing tools and APIs to create innovative DeFi applications that integrate tokenized stocks and ETFs [4] - Robinhood has partnered with Chainlink as its oracle provider to ensure reliable pricing and settlements, mitigating risks associated with bridge exploits and sequencer downtime [4] Group 3: Market Position and Competition - RWA tokenization is a significant trend in the upcoming 2025-26 bull cycle, attracting interest from major players like BlackRock [5] - Robinhood's L2 testnet enables on-chain trading of real stocks and ETFs, offering 24/7 trading with low fees while maintaining regulatory compliance, bridging TradFi and DeFi [6] - The rebranding of securities tokenization to RWAs has increased adoption, particularly among institutional investors, positioning Robinhood Chain in a competitive L2 landscape alongside Arbitrum and Optimism, with Coinbase's Base as a notable rival [7]