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Robinhood Chain considers technology that gives paying traders priority

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Robinhood Chain considers technology that gives paying traders priority

Robinhood Chain, the popular Layer-2 blockchain tailor-made for tokenized real-world financial assets, is evaluating a transaction-ordering system that would allow users to pay a fee to prioritize certain trades, according to a person familiar with the matter.

The technology is being developed by Arbitrum, which provides the infrastructure behind Robinhood Chain. The system, which isn’t affiliated with the chain, had been offering a paid-for transaction-ordering technology called “Timeboost” that gives users a priority-sequencing advantage in the form of a 200-millisecond head start. However, on September 24, Arbitrum replaced its Timeboost transaction-ordering system with a new model, Priority Gas Auctions, that allows traders to pay higher fees to have individual transactions processed ahead of others.

It is this newer version of the tech that Robinhood Chain is understood to be evaluating, the person said, under the condition of anonymity because the matter is private.

Currently, Robinhood Chain uses a first-come, first-served transaction ordering policy and has not availed itself of Arbitrum’s original Timeboost application.

Since launching its Ethereum-compatible network back in July, Robinhood Chain has surged in popularity, entering the top 10 list of blockchains ranked by total locked value.

Robinhood’s traditional brokerage business, which is now melding with a 24/7 onchain model for distributing tokenized stocks, has long made money from “payment for order flow,” a system in which market makers pay brokers for routing customer trades to them.

Paid transaction priority on a blockchain works differently. It gives traders an advantage by enabling faster transaction processing, potentially helping professional firms compete for trading opportunities that can disappear in fractions of a second.


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