Solana vs Arbitrum: A Heated Debate Over Robinhood Chain's Fees

[Block Media Reporter Ham Ji-hyun] Anatoly Yakovenko, co-founder of Solana, and Steven Goldfeder, co-founder of Offchain Labs, the developer of Arbitrum, engaged in a public debate regarding the fee structure of the Robinhood chain. What began as a simple comparison of transaction fees escalated into a competition of business models between Layer 1 (L1) and Layer 2 (L2), questioning whether to use a cheap public blockchain or to build a proprietary chain to capture network profits.

Yakovenko criticized on X (formerly Twitter) on the 8th, stating that "the average transaction fee of the Robinhood chain has risen to about $0.4," which he claimed is approximately 100 times higher than the average transaction fee on Solana.

He particularly took issue with the revenue distribution that Robinhood pays to the Arbitrum ecosystem. The Robinhood chain returns 10% of the protocol's net revenue to the Arbitrum ecosystem according to the Arbitrum Enhancement Proposal (AEP). Yakovenko argued that this 10% could cover transaction fees generated on Solana by about four times, suggesting that if Robinhood had used Solana, it could have effectively provided users with a "gas-free" service.

He also questioned the structure that uses network congestion as a revenue source. He stated that the frontend typically receives 50-80 basis points (0.50-0.80%) and argued that "there's no reason to tie revenue to the backend's processing capacity." In other words, if Robinhood wants to make money, it does not need to charge high blockchain fees but can earn from transaction services instead.

Goldfeder immediately countered. He pointed out that if Robinhood operated its own chain based on Arbitrum, it could secure most of the economic profits generated on the network after revenue distribution according to the AEP, but if it only operated applications on Solana, the base network fees would go to Solana validators and others.

He likened this to real estate, stating, "Robinhood chose Arbitrum to become a landlord, not a tenant." He argued that considering transactions occurring directly from third-party wallets or dApps without going through the Robinhood app, the economic benefits of owning a proprietary chain increase.

The debate also expanded to the issue of Maximum Extractable Value (MEV). Goldfeder argued that one should not compare the costs of the two chains based solely on superficial gas fees. He explained that both the Arbitrum and Robinhood chains can lower the "hidden costs" borne by users during transactions by suppressing front-running and malicious MEV.

In response, Yakovenko rebutted that the spread and fee burden of Arbitrum are higher than those of Solana. He claimed that even just considering the revenue distribution costs returning to the Arbitrum ecosystem is greater than the damages from sandwich attacks, and continued to criticize that a single sequencer structure motivated by profit maximization cannot be more efficient than a permissionless structure with multiple participants.

This debate has gained more attention as the usage of the Robinhood chain has surged recently. The Robinhood chain launched its mainnet based on Arbitrum technology on July 1. Since then, trading volume has increased sharply, surpassing 10 million transactions per day by early September, with network fees also reaching millions of dollars.

Ultimately, the arguments of the two founders can be summarized as differing philosophies regarding blockchain business models.

Yakovenko's logic is, "If there is a very cheap high-performance building, is there really a need to build your own?" He argues that using a low-cost L1 like Solana and generating revenue from applications is more advantageous for users.

On the other hand, Goldfeder's logic is that "Robinhood wants to be a landlord who takes the profits generated from the entire building, not a tenant trying to save on rent." He believes that by building its own L2, even if it incurs higher costs, it can directly control the economic activities and profits generated on the network.

As a result, this debate reflects the competition over whether companies will provide services on a cheap universal L1 or build their own L2 to secure network economic rights.

A third blockchain faction has also joined the debate. Nina Long, head of growth at Binance Chain (BNB Chain), stated on X on the 6th, "Lowering gas fees is no longer the top priority in the blockchain industry."

Long emphasized that securing a sustainable business model that allows blockchain technology development and ecosystem growth is currently a more important task. She explained that revenue models can take various forms, not just gas fees, but also revenue sharing and commercial contracts between companies.

She noted that over the past five years, blockchain foundations have primarily focused on providing grants and investments while concentrating on lowering gas fees, and argued that to continue supporting technology development and ecosystems, blockchain companies need a solid commercial structure. However, Long clarified that saying gas fees are just one of many monetization methods does not mean that they must be raised immediately to build a sustainable revenue model.

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