How Metric turns LPs into market makers on Robinhood Chain
Market makers pay Robinhood for retail order flow; on Robinhood Chain whoever provides liquidity fills it. Metric quotes from Chainlink or Pyth so LPs avoid arbitrage losses: stock pools beat holding by 44% APR over seven days while crypto pools trailed.
How Metric Turns LPs Into Market Makers
MMs paid Robinhood $49.7M in June for the right to fill its customers' stock orders. Citadel alone paid $14.9M.
Why pay for orders?
Most retail orders come from people who want the stock and have no idea where it trades in 5 minutes. Fill enough of them and the spread is yours.
On Robinhood Chain there's no Citadel in the middle. Whoever provides the liquidity fills the order.
And @metricxyz is built so a normal LP can take that seat without getting wrecked.
Why not just LP on Uniswap?
Say NVDA is $180 on Nasdaq and you LP into an NVDA/USDG pool. Nasdaq moves to $182. Your Uniswap pool keeps selling NVDA at $180 until an arb bot buys it from you and dumps it at $182. That $2 comes out of your pocket, on every move, all day.
On Metric the pool doesn't set its own price, a price feed (Chainlink or Pyth) does. Nasdaq goes to $182, your quote goes to $182 plus a small spread. The bot has little left to take, and you keep the spread from people who actually want the stock.
Does it work?
Metric shows how every pool's LPs did against simply holding the tokens they deposited. Last 7 days, green-tier pools (Metric's safest tier), annualized:
- Stock pools ($9.6M TVL): LPs earned 91% APR from the spread and finished 44% APR ahead of just holding the stocks. 22 of 34 pools beat holding
- Crypto pools ($3.7M TVL): LPs earned 43% APR from the spread, lost more than that to price moves and finished 15% APR behind holding. The WETH pools, 84% of that liquidity, all trailed holding
Same design, opposite results, at least for now. My read: stock-token flow is mostly retail, so LPs get to keep about half the spread. Crypto pairs trade 24/7 against Binance, and the bots there move faster than the price feed.
Is the flow moving over?
- Token Terminal has Metric's total tokenized-stock DEX volume up $310.9M over the past 7 days, more than 10x any other venue (Meteora +$26.7M, Uniswap +$24.8M)
- On RH Chain, Metric did 3.3x the volume of Tessera V, the closed propAMM run by a single market maker ($267M vs $80M over the last 7 days)
- It's also still light on capital, which means you're early. In the 24h to Thursday, when I last checked, about $1 in every $6 of stock-token trading on RH Chain went through Metric, on just $3.7M of liquidity. Uniswap and the rest needed $48M to do $102M, so each dollar on Metric traded ~6x a day vs ~2x elsewhere
How am I playing it?
I'm LPing the RH Chain stock pools on Metric and try to convince some of you to use my referral link, which I heard might be beneficial to both of us (see the first reply).
NFA ofc.
But Citadel pays Robinhood to sit on the other side of retail.
On Robinhood Chain that seat is open to anyone with a wallet.
That is definitely an opportunity.
Especially if there's also an airdrop.
And you LP'd early.
And used my link.
Check comments.
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