Data & Insights: Robinhood Chainsanity; HIP-3 Dominance

Enter The Green Chain

• This is a section from The Block's The Funding newsletter, where also cover venture fundings developments and topics across the broader institutional crypto space — including Wall Street, public companies, institutional products and corporate adoption.
• Robinhood Chain has seen over $2.3 billion in cumulative DEX volume in the roughly 10 days since its launch on July 1st
  • Almost all this volume, roughly 97% of it, occurred from July 8 onward
  • On July 7th, daily DEX volume on the chain was just $32 million. The very next day, it was $433 million.
  • Transaction count also rose from 1.3 million to 6.9 million, while active accounts rose from 33K to nearly 200K in that same day.
• The catalyst for this near-instantaneous spike in activity was a post on X by Robinhood CEO Vlad Tenev, which essentially supported memecoins on the chain.
  • This caused an onchain frenzy that caused speculators and onchain capital to bridge into the chain
  • One of the main beneficiaries of this was a memecoin called Cashcat, named after the mascot from Robinhood's pre-rename startup days of the same name.
  • The token’s market cap rose from under $10 million before Vlad’s post to over $140 million within hours, peaking at ~$225 million, while many other smaller-cap memecoins also surged in tandem.
• Robinhood built the Arbitrum-based L2 as institutional infrastructure for tokenized real-world assets, while Uniswap served as the main DEX of the chain.
  • Due to the surge in volume and activity, both the ARB and UNI tokens also rose considerably as a spillover effect.
    ARB rose by over 30% from July 8th to the time of writing, while UNI rose by over 40% from July 1st.
  • Total value locked (TVL) on Robinhood Chain stands at ~$130 million on July 12, having crossed the $100 million mark within the chain's first week.
  • Despite the early success in attracting capital onto the chain, it is worth noting that this cohort of capital is mainly speculators looking to profit from memecoins and trades, while Robinhood Chain's intended main purpose is to be the main venue for institutional RWA infrastructure.
  • It will be worth watching how Robinhood strategizes around this and how they plan on attracting said institutional capital interested in RWA products over memecoin speculators.

USDGreen

• Speaking of Robinhood Chain, USDG serves as its native stablecoin.
  • For context, USDG is a regulated, USD stablecoin issued by Paxos and is managed and promoted by the Global Dollar Network, a consortium of enterprises with the likes of Anchorage Digital, Bullish, Galaxy Digital, Kraken, Nuvei, Paxos, and, most notably in this case, Robinhood.
  • USDG is currently the 8th largest stablecoin by market cap, with a circulating supply of ~$2.9 billion and accounts for ~1% of the total stablecoin market.
  • It is also the default asset for Robinhood Earn, the self-custodial lending product the company shipped alongside the mainnet
  • Earn routes USDG into a Steakhouse-curated Morpho vault for an estimated 7% APY, roughly triple what a leading high-yield savings account pays, putting onchain yield in front of Robinhood's ~27 million funded customers.
• On Robinhood Chain specifically, USDG has grown from just ~$56 million on the day of launch to now having over ~$205 million in circulation
  • While the early growth numbers are quite impressive, there is a massive sustainability question surrounding this growth
  • The question lies with the 7% rate. If the rate holds, borrower demand will naturally deepen, and USDG's onchain base compounds
  • However, if the rate starts to fade as an acquisition incentive, then migrated balances are the first to leave, as evidenced by the trajectory experienced by Ethena’s USDe once its yields faded following the carry-trade collapse
  • Tracking total USDG supply against its Robinhood Chain balance will show whether the chain is minting new stablecoin demand or simply receiving more mercenary flows from other chains.

Spot The ETF Volumes

• We’re continuing to watch the Bitcoin spot ETFs as they have proven to be a strong leader of overall sentiment. Volume has been grinding lower since its February peak, with the 7-day moving average slipping from around $2.7 billion to $1.8 billion year to date, tracking a broader pullback in flows following an extended stretch of redemptions.
  • U.S. spot bitcoin ETFs pulled in roughly $197 million for the week ending Friday, the category's first positive week since early May and the formal end of an eight-week outflow streak that had become the longest since the products launched.
  • Spot ether ETFs saw a smaller but notable rebound too, taking in about $84 million and snapping their own eight-week losing streak, which had matched the category's prior record.
• The preceding eight weeks drained a combined estimated $9 billion-plus from both fund groups, so this week's inflows recovered only a small fraction of what had left the market, leaving the broader drawdown largely intact.
• This aligns with a potential bottom, as supporters of the 4-year cycle theory suggest that Bitcoin’s bear market would be set to end sometime in Q4 2026. 
  • Historically, the stretch from mid-August through mid-October has been one of bitcoin's weakest windows, with September alone averaging a loss of roughly 3% over the past decade, one of the few reliably negative months in its seasonal profile. October, by contrast, has been the strongest month on average, and Q4 has broadly been bitcoin's best quarter.
  • If that pattern holds, this week's inflow reversal would be landing near the tail end of the seasonally weak period rather than at its start.

Crypto Twitter Goes Quiet

• Tweet volume for the keywords "Bitcoin" and "Ethereum" has fallen to fresh 12-month lows, with Bitcoin mentions down to roughly 130,000 and Ethereum to around 40,000. That level of attention hasn't been seen since 2020, back when institutional interest in crypto was still nascent.
  • The tweet volume metric serves as a rough proxy for retail mindshare, tracking how much the general public is talking about these assets rather than how much capital is actually flowing into them.
• The current reading is notable less for the absolute level, and more for the comparison point. 2020 marked the pre-institutional era of crypto, when neither Bitcoin nor Ethereum had meaningful Wall Street attention, spot ETFs, or corporate treasury allocations.
  • This has now flipped. Retail attention, as measured by social chatter, has round-tripped back to 2020 levels even as institutional involvement has moved in the opposite direction, with tokenization now a headline topic at major conferences and tradfi press releases.
• While this can be seen as institutional adoption decoupling from retail engagement, low tweet volume has historically coincided with periods of price stagnation or drawdown. There is hope that price action and infrastructure development no longer require the same wave of public attention that drove prior cycles, but retail involvement has made for better stories.

HIP-3 To Lead

• HIP-3, Hyperliquid's permissionless framework for builder-deployed perpetual markets, has gone from a niche corner of the exchange to nearly half its daily volume. 
  • HIP-3's share of total Hyperliquid perp volume has climbed from roughly 2% at the start of the year to around 50% now, coinciding with growing retail appetite for trading equities onchain.
• The category is dominated by TradeXYZ, which runs markets like XYZ100 (tracking the Nasdaq-100) and single-stock contracts on names like Nvidia and Tesla, all settled in stablecoin rather than the underlying share.
• Perps leverage mechanisms are a major unlock for volume. Compared to traditional options, perpetuals avoid the time decay that erodes options positions, since there's no expiration to fight against, only funding payments. That structure is arguably more intuitive for retail traders used to simple long or short exposure than options' strike-and-expiry math.
• 24/7 trading is the other core pitch. Unlike listed equities, these perps never close, so a trader can react to news or earnings the moment it breaks rather than waiting for the next open, though this also means no circuit breakers over a weekend gap.
  • The underlying stocks themselves still only trade during market hours, so HIP-3 prices outside that window rely entirely on oracle and funding-rate mechanics to stay anchored, an unproven setup relative to traditional 24/7 assets like crypto itself.
• Early volume suggests real demand for around-the-clock access, but it's still a young product category built on an asset class that wasn't originally designed for continuous trading.