Robinhood Chain has recorded a steep decline in network usage, with average daily transactions dropping from 10.8 million in mid-September to 6.2 million in early October. The slowdown comes as Robinhood continues to subsidize network fees for customer swaps.

Although more than $1 billion remains deposited in applications on the blockchain, both transaction counts and spot trading volumes have declined. CoinDesk’s analysis of growthepie data found that the network averaged 6.2 million transactions per day between Oct. 2 and Oct. 8, down 42% from the 10.8 million average recorded between Sept. 10 and Sept. 16. Activity also fell 20% compared with the previous week.

Introduced in July, Robinhood Chain allows users to trade tokens and access borrowing and lending services through applications connected to Ethereum. The brokerage has also outlined plans to enable round-the-clock trading of tokens linked to stocks and funds.

Transactions generate network fees, while applications built on the blockchain may charge additional fees for trading and lending. A Bernstein note published last month estimated that Robinhood receives about 90% of network fees. Consequently, declining transaction activity could reduce the company’s fee revenue.

The downturn represents a reversal from September, when transaction activity remained near its peak despite network fees plunging 97%, as reported by CoinDesk on Sept. 19. Weekly trading volume was also increasing at the time, but both indicators have since weakened.

Active blockchain addresses have declined as well. The network averaged approximately 322,000 active addresses per day during the latest week, 31% fewer than in mid-September. However, this decrease does not necessarily mean the number of individual users has fallen by the same amount. Users can control several addresses, while automated trading programs may generate thousands of transactions.

Spot trading slows despite rising deposits

Spot trading volume across exchanges reached $7.45 billion from Oct. 2 through Oct. 8, a 21% drop from $9.46 billion the previous week, according to CoinDesk calculations using DefiLlama data. Uniswap, a decentralized exchange that facilitates direct token swaps, accounted for roughly 77% of the total.

Despite the weaker trading figures, capital held across Robinhood Chain applications has continued to increase.

Deposits in lending and trading applications rose approximately 2% over the week to $1.04 billion. Meanwhile, the network’s stablecoin supply edged up to around $1.10 billion. The data suggests that users are keeping their money on the blockchain while carrying out fewer transactions.

Perpetual futures trading has been an exception to the broader slowdown. These contracts allow investors to speculate on asset prices without owning the underlying tokens. DefiLlama’s rolling seven-day figures showed approximately $7.35 billion in perpetual futures volume on Friday, up 26%.

Network fees have moved lower, with users paying an average of about $65,000 per day between Oct. 2 and Oct. 8. That was a 39% decrease from the previous week and substantially below the roughly $8 million collected on the network’s busiest day in early September.

Robinhood extends its fee subsidy

Robinhood and its partners are introducing incentives to encourage users to trade more actively. On Oct. 1, trading platform Arcus began offering extra reward points for stock-token swaps completed through Robinhood Wallet. Robinhood also extended a fee promotion that had been scheduled to end on Sept. 29.

Under the extended offer, the brokerage will pay network fees for swaps worth more than 50 cents made through its wallet until Dec. 31. The promotion gives Robinhood Chain less than three months to revive trading activity across its more than $1 billion in deposits before users must begin paying the transaction costs themselves.

Whether the network can sustain its activity after the promotion ends remains uncertain. Customers may trade less frequently once they are responsible for their own fees, making the end of the subsidy a key test of Robinhood Chain’s ability to attract lasting demand.