Robinhood Chain’s successful proof shows that Ethereum isn’t dead

Author: Odaily

The previous era of the crypto industry relied on token dumping through infrastructure, and its next era will choose to build real businesses with Ethereum L1 + L2.

Travis Kling threw out a question this week: “Is it now obvious that companies that actually get things done aren’t interested in L1/L2?” Robinhood was his first example. But the exact opposite is true: Robinhood is almost a perfect counterexample—when operating companies make business decisions, they almost all choose the Ethereum L1 + L2 model.

Robinhood chose an existing L1—Ethereum—then built its own Ethereum L2 using Arbitrum technology. Robinhood Chain uses Ethereum blobs to ensure data availability, and uses ETH as its native gas token; its security is also provided by Ethereum.

So Robinhood is not rejecting Ethereum’s L1 + L2 model. On the contrary, the model is running on Robinhood as expected.

The “buyers” for choosing Ethereum have changed. In the past, crypto industry projects chose public chains and technologies to sell their tokens, whereas the emerging real-world on-chain economy is turning the Ethereum L1 + L2 model into the foundation for cash business.

As the composition of buyers changes, I believe Ethereum’s advantages will become even clearer.

The old token-centric crypto economy

By “real enterprises serving real users,” I mean a traditional company model: build the products customers need, earn profit by serving customers, and increase the value of equity in those profits.

“Real users” here refers to consumption demand arising from ordinary economic needs, rather than speculative demand mainly generated by issuing new tokens. Crypto-native users are clearly real users. This is not a moral judgment about whether a protocol is useful or whether its developers are sincere—it’s simply a distinction based on whether the operating entity’s goal is to pursue real-economy objectives.

Token value can only come from three sources:

• Cash: reliable claims on future cash flows, similar to on-chain equity or bonds;

• Utility: access, control, governance rights, or other privileged participation rights for a valuable system. Even without cash flows, tokens that control important things obviously have value;

• Monetary premium: people hold the asset because they expect others will accept and recognize its value in the future. This asset is no longer merely a debt claim that must ultimately be exchanged for something else, but becomes a store of wealth—a terminal asset.

Monetary premium exists in reality, but it is also extremely difficult to sustain. It requires a deep network of effects built on trust, liquidity, distribution, integration, and practical utility. Gold, the US dollar, Bitcoin, and Ethereum each build different versions of this effect, and almost no other assets can achieve it.

Looking back, since programmable crypto became popular, most industry participants were not ordinary cash-flow businesses. Their economic objective was usually to sell a token, whose value was mainly based on utility, expected monetary premium, or far-off promises of future cash flows.

Sometimes their plan was straightforward—launch a protocol and sell its token. Sometimes it was more indirect—get funding from a token-funded ecosystem, then monetize the tokens obtained. Sometimes a project truly expected to be profitable in the future, but because the token valuation was decoupled from any possible future cash flows, the actual business model remained fundamentally confidence in the token itself.

This has become the norm, because almost every project does something similar—but there are also exceptions.

Centralized exchanges are essentially cash trading business platforms, and they naturally support multi-chain. Adding one more chain is like adding one more deposit/withdrawal channel. Some stablecoin issuers are also cash trading business—initially serving customers in the crypto space, and now rapidly expanding into the broader economy.

But these exceptions prove one point: enterprises targeting ordinary cash trading will choose infrastructure that maximizes business outcomes rather than maximizing token value.

Different enterprise goals build different projects

An enterprise’s ultimate goal determines its technology choices.

If the goal is cash trading business, then the blockchain is infrastructure, and the selection criteria are to reduce risk, improve the product, reach customers, and safeguard profits. If the goal is token monetization, then blockchain selection has much greater freedom—once the enterprise is funded by a public chain, it can choose to develop on the blockchain that funded it.

For example, if a protocol succeeds on Chain A, then you can also launch a similar protocol on Chain B so investors can price your token by comparing options. Want to hype a new token? Then a new L1, L2, app chain, gas token, governance system, or some special tech stack could all become selling points.

The issue isn’t the diversity of technology itself—crypto will continue to see explosive growth in applications, protocols, L2 architectures, and dedicated execution environments. The issue is that people tend to turn every new idea into a sovereign, independent ecosystem (with its own L1 architecture, security verification, liquidity base, and monetary assets), regardless of whether its underlying product is actually independent.

As the crypto industry is transitioning toward cash business, all kinds of experiments are continuing, but more and more of these attempts will be built on shared infrastructure. Enterprises will specialize in development at the application layer or on L2, while relying on Ethereum L1 for settlement, security verification, liquidity maintenance, and monetary asset management. The result is not less innovation—it creates a kind of equilibrium: the periphery becomes more diverse, while the base layer becomes more centralized.

In the past, traditional crypto economies tended to choose architecture around the token they wanted to sell. The emerging on-chain economy will choose architecture around the products its customers want to buy.

Buyers are changing

The future of crypto will be drastically different from the past because the “buyers” have changed.

The prior U.S. government heavily suppressed the growth of on-chain transactions, but this trend has now reversed. The GENIUS Act is now in effect, providing a legal framework for payments with stablecoins, and Europe’s MiCA regulatory regime also fully applies. Brokerage firms, payment companies, banks, asset managers, and governments around the world are formulating stablecoin, tokenization, and on-chain transaction strategies.

But that doesn’t mean all regulatory issues have been solved. At least it shows that large institutions can try more blockchain business.

We are approaching the beginning of the S-curve where crypto becomes truly mainstream.

When we move past this stage, crypto and traditional finance will no longer be clearly separated categories. Property, money, transactions, finance, identity, and trust will be coordinated through a network made of both on-chain and off-chain systems. Ultimately, “Web 3” will be phased out the way “Web 2” was, and everything will return to the internet itself.

As this process advances, a larger share of crypto market participants will be real enterprises serving ordinary consumers across the broader economy. This proportion won’t only show up in the number of companies; it will also show up in the scale of capital, the number of users, the size of assets, and institutional influence.

These companies are no longer crypto projects looking for a business model to support tokens. Instead, they use crypto technology to optimize existing or emerging cash businesses. This also determines their technology choices: infrastructure chosen for token economics cannot guide infrastructure chosen for cash economics very well.

Real enterprises don’t build infrastructure from 0 to 1

Typically, real enterprises have limited budgets for risky infrastructure building. They don’t want consensus mechanisms, cross-chain bridges, validator economics, gas, governance tokens, and liquidity bootstrapping to become six unrelated side businesses—each extra link must create customer value, otherwise it becomes a burden.

Chains should serve the business, not the business serve the chain.

Some businesses are inherently multi-chain. Exchanges, wallets, stablecoin issuers, and certain asset issuers may require broad distribution. Even so, “multi-chain” rarely means each chain is equally important. In liquidity, issuance, settlement, product state, or deeper integration, different chains usually have their own dedicated domains.

Most on-chain businesses need to make special commitments to one chain or a few chains, and their choices usually take three forms:

• When an on-chain business needs maximum decentralization, trusted neutrality, risk minimization, or liquidity, they will use Ethereum L1 services. L1 execution costs more because it carries the strongest shared environment;

• When enterprises need control, customized functionality, compliance, predictable unit economics, low latency, or high throughput, they will build their own Ethereum L2 layer. Because they can get a dedicated chain as they wish while staying directly connected to Ethereum;

• When enterprises don’t need an L1 layer, and building their own L2 layer isn’t necessary, they typically use one or more mature shared L2 layers. Base, Arbitrum One, Robinhood, and other mature Ethereum L2s have become common deployment platforms.

These on-chain enterprises will still bridge assets, do “product exports,” and connect to other networks. Having their own main chain doesn’t mean isolation from the world—importing, exporting, and interoperability are core components of on-chain businesses. But the main chain is still critical: it determines system security, canonical state, liquidity relationships, operating models, and long-term dependency relationships.

Why does the Ethereum L1+L2 model still use it?

Ethereum separates the two key elements large enterprises need.

L1 provides a highly decentralized, trusted neutral, and extremely liquid global hub, while L2 provides a market of fast, low-cost, specialized, controllable, and customizable execution environments.

L1 stays neutral, while peripheral L2s can adapt to different operators, legal jurisdictions, products, and users. L2 not only expands Ethereum technically—it expands Ethereum politically: organizations can operate their own way without asking the global center (L1) to become their private chain.

An independent L1 can provide control and performance advantages. In some cases, for a project, full sovereignty over consensus and data availability is worth it—but acquiring these isn’t cheap.

A new L1 must create and maintain its own security system, a set of validators or operators, cross-chain bridges, liquidity, tools, integrations, and reputation. It forms a new security and liquidity island, increasing the cost and friction of interoperability with Ethereum L1 and the broader L2 economy (i.e., the dominant on-chain economic network).

For the vast majority of enterprises, the value created by an independent L1 is not enough to offset these costs.

A customized Ethereum L2 can gain most of the business advantages enterprises want from adopting an independent L1: high TPS, control over execution, upgrades, fees, sequencing, latency, access rules, and product-specific features, and more.

In addition, L2 provides advantages that an independent L1 itself doesn’t have: Ethereum is used for settlement and data availability, standard L1 bridges, assets and capital close to Ethereum, and an interoperability layer for achieving increasingly minimized trust.

The design of L2 is still crucial. Administrator permissions, upgrade keys, proving systems, and withdrawal guarantees determine how much security assurance users can have at any moment. But even an L2 with control held by a small number of operators can still provide a solid settlement foundation for users on Ethereum L1. Companies don’t need to run and maintain their own L1 layer solely to operate the business.

An Ethereum L2 is both an independent blockchain and part of the Ethereum economic system. It can own and customize its own execution environment, while using Ethereum for settlement, data availability, and interoperability management.

L2 typically deeply integrates ETH into its application economy, for example as the native Gas token. Canonical cross-chain patterns provide a trust-minimized path for L1 capital and assets, enabling them to enter the “local economy” of L2. Each new L2 has a unique product interface, and Ethereum’s network effects will keep strengthening.

Robinhood made such a business decision

Robinhood’s development path is highly instructive.

First, on a mature L2—Arbitrum One—it issued stock tokens. After validating the product and learning what it needs, Robinhood launched a proprietary chain built on the Arbitrum platform.

This is very likely to become a standard strategy for real enterprises: build a business on a certain blockchain first, then once scale, product needs, and unit economics reach a certain level, upgrade to a dedicated L2.

Robinhood Chain is tailored specifically for the financial services industry. It adopts Arbitrum technology, providing 100 milliseconds of latency, predictable transaction pricing, high throughput, and infrastructure customized according to Robinhood’s performance, security, and regulatory requirements.

At the same time, Robinhood Chain is still an Ethereum L2. It uses Ethereum blobs to guarantee data availability and uses ETH as its native gas; it uses the Ethereum official bridge with no third-party validators. This is what it looks like when a real enterprise builds a genuine on-chain product.

Robinhood doesn’t need to launch a Robinhood gas token, and it doesn’t need to persuade the public that it deserves a lasting monetary premium. Robinhood itself owns stock; its economic returns come from customers, products, assets, trading, and cash flows. The blockchain is just its infrastructure.

Using ETH as gas is a simple business decision. L2 service already uses ETH to pay L1 service fees. ETH has strong liquidity, widespread adoption, and is the native token of the system. If Robinhood used a proprietary gas token instead, it would add issues related to allocation, liquidity, pricing, and legal matters—and launching a token wouldn’t improve Robinhood’s core product.

Robinhood’s success depends on its application layer and the off-chain businesses supported by that application layer—not on the efficiency of creating new monetary assets. Therefore, when someone says Robinhood built its own blockchain and rejected existing L1 and L2 services, that’s inaccurate.

Robinhood is only refusing to share its dedicated execution environment with other projects—it isn’t rejecting Ethereum. On the contrary, it chose Ethereum as the parent chain for its proprietary blockchain.

Earlier, Coinbase made a similar decision by launching Base. Coinbase is not an Ethereum evangelist, and it’s well known that Brian Armstrong has publicly expressed greater enthusiasm for Bitcoin than for Ethereum. However, when Coinbase chose infrastructure for its on-chain business, it still chose to become an Ethereum L2.

Base is precisely the strongest evidence that Ethereum’s L1+L2 model isn’t just talk. Coinbase’s decision was driven by business considerations rather than ideology.

When companies build cash businesses instead of token sales, every decision they make is a business decision—and that determines the infrastructure they will choose: the Ethereum L1+L2 model.

What does this mean for Ethereum and ETH?

This change in participant composition is extremely beneficial to Ethereum.

Historically, the competitive landscape of blockchains has largely been dominated by teams whose incentive mechanisms focus on token creation, ecosystem funding, and token valuation. Looking ahead, the competitive landscape of blockchains will be increasingly dominated by companies that optimize security, customers, control, distribution, liquidity, and interoperability—all in order to serve cash businesses.

This shifts demand toward Ethereum’s “barbell” structure: L1 is used to minimize risk and maximize liquidity, while L2 is used to scale, customize, and maintain operator control.

Ethereum has developed into a globally universal platform not by forcing all companies into one shared execution environment, but by becoming the underlying settlement, security, liquidity, and asset layer across many environments.

This is also good news for ETH. ETH’s success comes from building a money network and global trust. ETH is an excellent equity instrument and also the native asset of Ethereum’s global settlement layer. Throughout the ecosystem, it functions as collateral, a liquidity asset, a treasury asset, a productive asset—and it is also increasingly becoming a terminal asset.

As more real enterprises build applications on Ethereum, they will distribute ETH to more users, integrate it into more products, and put it to work in more domains. This will strengthen ETH’s liquidity and investors’ confidence, which in turn reinforces the monetary premium—monetary premium will ultimately evolve into a larger network effect.

Robinhood isn’t an exception—it’s a beacon.

Real enterprises will use Ethereum L1 when they need a globally most neutral, lowest-risk shared environment with the strongest liquidity. When they need control, customization, and high performance, they will build their own Ethereum L2. And when their business isn’t yet sufficient to support building an independent blockchain, they will deploy to a mature blockchain, typically an Ethereum L2.

This isn’t because they’re fans of Ethereum. It’s because they made rational business decisions.