Crypto: $443 Million in Memecoins Vanished on Robinhood Chain

Forty-five thousand tokens created in a single day, then vanished. Launched this summer by the American brokerage, Robinhood Chain saw the daily volume of its memecoins pairs against tokenized stocks soar from almost zero in July to $443 million by early September. CryptoQuant estimates a 96% collapse that followed.

Circle experienced the same story with Arc. This blockchain designed for Wall Street banks recorded over $336 million in volume on its memecoins launchpads on its very first public day.

Key Points

• Robinhood Chain nearly reached half a billion dollars in daily trading before losing 96% of its activity.
• Up to 45,000 tokens were circulated within twenty-four hours on the brokerage's chain, with a nearly zero residual value.
• Arc, Circle's institutional network, saw its launchpads generate $336 million right from the public opening.
• The U.S. Senate blocked the CLARITY Act before the SEC opened a five-year exemption for tokenized securities.

Robinhood Chain, a Factory for Disposable Tokens

These volumes were based on industrial-scale token production. Dune's data records about 26,000 new tokens deployed daily on Robinhood Chain in September, peaking at nearly 45,000 on the 8th of the month. Almost none found buyers. They are now worth nothing, the ordinary fate of the overwhelming majority of cryptocurrencies ever issued. Number of tokens launched per day on Robinhood Chain -- Source: Dune.

The tokenized stocks traded on this chain require precision. They are tokenized debt securities that replicate the price of a listed company (it should be noted that they do not grant any ownership rights over the underlying security, nor voting rights in general meetings). Robinhood offers more than 200 to its European clients since the announcement made in Cannes alongside EthCC, along with its proprietary blockchain built on Arbitrum technology.

Julio Moreno, head of research at CryptoQuant, does not have high hopes for this bootstrapping model.

<< It is a way for blockchains and/or new applications to attract money and activity, but it is not sustainable. Most of these assets and memecoins will tend towards zero. >> Julio Moreno, head of research at CryptoQuant

Indeed, the number of tokens created daily has already dropped since the beginning of October.

Circle, Arc, and the Repeating Memecoin Cycle

However, each new blockchain plays this tune again. Circle opened Arc to the public on September 16, with a pitch aimed at banks and large institutions wanting to move money and trade digital assets on a controlled rail. The memecoins launchpads there raked in over $336 million in volume within twenty-four hours.

The clearest precedent remains Pump.fun. Opened on Solana in early 2024, the launchpad allows creating a token in seconds for a few cents and has amassed over $700 million in cumulative revenue. Less than 2% of the tokens born there cross their bonding curve, the automatic pricing mechanism that conditions access to a liquid secondary market.

The SEC Opens a Five-Year Window for Tokenization of Stocks

The political calendar has also played its part. Jim Thorne, chief strategist at wealth manager Wellington-Altus, links this frenzy to the tempo of Washington. The U.S. Senate failed on September 15 to advance the CLARITY Act, the text meant to establish federal rules for crypto markets. Arc opened the next day.

<< [This] was a brief period during which people thought we were going back to the Wild West after the failure of the CLARITY Act. >> Jim Thorne, chief strategist at Wellington-Altus

The parenthesis closed quickly. The SEC granted a five-year exemption allowing certain platforms to test the exchange of tokenized stocks on blockchain within a defined framework, and the excitement deflated in the days that followed.

The Wellington-Altus strategist readily likens these exchanges to trading << Pokémon cards >>, before adding that << trading memecoins is a regrettable distraction from the power of tokenization >>. A salutary distinction, certainly.

The 45,000 tokens from September 8 are now worth nothing. The tokenized stocks, however, are still there: over 200 securities accessible to Robinhood's European clients, an institutional blockchain in production at Circle, and five years of sandbox opened by the SEC for platforms wanting to circulate on-chain securities.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.