Invest1 publisher3 min readPublished
Robinhood Wallet adds Arcus, which has logged $5 billion in spot and perpetual trading volume
Robinhood Wallet now routes Stock Token swaps through Arcus, a dYdX-team exchange reporting more than $5 billion of volume since its July 1 launch. That total also counts perpetuals still in beta, so the spot demand Robinhood is connecting to is smaller than the headline figure, by an amount nobody has published.
The Investor · Invest desk
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What happened
- Arcus listed more than 90 Stock Tokens at launch and now lists more than 190, all reachable from the wallet alongside other liquidity sources.
- Swaps routed through Robinhood Wallet can earn boosted points under a live incentive program, compared with the same spot trade placed directly on Arcus.
- Stock Tokens are debt securities issued by Robinhood Assets (Jersey) Limited, giving a contractual claim to a share's economic exposure without ownership of the share.
Compiled by The InvestorSomething wrong?How this is made
Why it matters
- cost Points pay for part of the early wallet-routed volume, so it will overstate unsubsidised spot demand until the incentive program ends.
- exposure A user who routes a swap relies on Arcus, an unregulated venue, for the price, and holds exposure only as good as the Jersey issuer's contract.
- constraint US persons are barred and Canada and the UK are restricted, so the wallet's stock-token market can grow only in permitted jurisdictions, whatever Arcus's volume does.
Spread across the more than 15,000 unique traders Arcus reports [6], its $5 billion of cumulative volume [5] comes to roughly $333,000 a trader [1]. An average that size suggests a few large accounts carry much of the total. The best single day topped $500 million [6], about a tenth of everything Arcus has reported since going live on July 1 [2] [3]. The total also counts perpetual contracts, which are still in beta [8], and Arcus did not publish how much of the $5 billion is spot [5].
Total value locked above $28 million [7] puts turnover at about 180 times deposits [3]. On this venue that ratio says little about depth. Arcus prices swaps by request-for-quote, with professional market makers competing to quote each one [11]. How large a trade can clear depends on who answers the request, so the $28 million is a weak guide to it.
Robinhood now owns most of the chain of parties around a trade. A Robinhood entity, Robinhood Assets (Jersey) Limited, issues the Stock Tokens [13]. Arcus trades only on Robinhood Chain and took an investment from Robinhood Crypto [3]. The wallet routes the orders, with Arcus as one source among others [2]. Robinhood leaves execution to another firm, and Arcus is not a regulated financial services provider [15]. According to Crowdfund Insider, Johann Kerbrat, Robinhood's senior vice president and general manager of crypto and international, has said the purpose of the chain is to bring more real-world assets on-chain, and that venues like Arcus provide the liquidity and execution inside the wallet [16].
A holder owns a contractual claim on a share's economic exposure, without legal or beneficial ownership of the share [13]. The tokens are not registered under US securities laws or offered to US persons, and offers are restricted in Canada and the United Kingdom as well [14].
Swaps routed through the wallet can earn boosted points compared with the same spot trade placed directly on Arcus [10]. So Arcus is paying, in points, for flow that arrives through Robinhood's front end. It describes the wallet link as an extension of direct trading on the exchange [9].
The numbers fit more than one outcome. If perpetuals and points produced most of the $5 billion, spot routing through the wallet adds little. If non-US traders want equity prices that react to earnings, economic data and geopolitical news outside exchange hours [12], the perpetuals waitlist of more than 100,000 traders [8] is a backlog of that demand. It is more than six times the current trader count [4]. Eddie Zhang, Arcus's founder and chief executive, has presented the early volumes as a sign that traders want global markets they can reach at any hour [17].
I think the evidence shows trading well past pilot size, but concentrated in fewer accounts than the 15,000 figure implies. It does not yet show spot flow the wallet can rely on. If spot volume holds after the points program ends, that view is wrong.
What to watch
- Whether Arcus breaks its $5 billion into spot and perpetual volume.
- Spot volume routed through Robinhood Wallet after the boosted-points program ends.
- Perpetuals leaving beta for the 100,000-trader waitlist, and limit orders arriving through the wallet's dapp browser.