Robinhood Chain's 'Wolf Is Coming'? US Stock Short Squeeze Narrative Fails, Players Say 'Can't Afford to Play'

Author: Nancy, PANews

As FOMO sentiment on Robinhood Chain remained high, the market unexpectedly poured cold water on it.

On the evening of September 2, Robinhood Chain saw another quick pump-and-dump. Leveraging the wealth effect of stock-coin pairing, the meme coin JINQIAN, built on a US stock short squeeze narrative, and the token FAMI, sharing the name of a Nasdaq penny stock, ignited market sentiment upon launch, attracting massive capital and attention. However, after the community questioned a backdoor takeover and harvest, both market caps plummeted. When the dust settled, it was the trend-chasing entrants who truly paid the price.

Meanwhile, Robinhood Chain transaction fees have been rising amid the on-chain frenzy, driving platform revenue to record highs, while users are starting to exclaim they "can't afford to play," even jokingly calling it a "noble chain."

US Stock Short Squeeze Narrative Fails, Is Robinhood Chain Cooling Down?

Stock memes have become a popular play on Robinhood Chain. Especially after the meme coin BONER's short squeeze narrative stirred market sentiment a few days ago, capital began hunting for the next target with similar hype potential.

Last night, a token named FAMI launched and attracted massive capital inflows within minutes. Subsequently, the meme coin JINQIAN, paired with FAMI, quickly gained market attention. Among them, JINQIAN's market cap peaked above $73 million, and FAMI's above $53 million, with combined trading volume approaching $240 million, underscoring the heat.

The rapid rise of these two meme coins was linked to a prior teaser by crypto KOL Rune. A few days earlier, Rune had announced plans to acquire approximately 37.4% of a Nasdaq micro-cap stock via OTC for about $1.8 million, with a short interest ratio as high as 92.3%, and to tokenize it on Robinhood Chain while pairing it with a meme coin for a "short squeeze."

Soon, the community connected the dots to Farmmi, a Nasdaq-listed Chinese agricultural supplier. The company primarily processes and sells agricultural products such as shiitake mushrooms, wood ear mushrooms, and other edible fungi, along with related agricultural trade. Coincidentally, its annual report mentioned a mushroom variety called "Jinqian mushroom." As a result, Farmmi's stock price surged as much as 350% intraday. Even more interestingly, the on-chain token FAMI's market cap peak reached 10 times Farmmi's actual market cap.

However, the carnival quickly reversed. The community discovered that FAMI was not an official Robinhood stock token; its supply mechanism and reservation method resembled a carefully scripted play, with the creator packaging the story as a liquidity lure.

On-chain data showed FAMI's total supply was 37,430,000 tokens, close to Farmmi's total outstanding shares. This supply was minted in two transactions at creation, with the deployer wallet retaining 38% and deploying a contract called PoolRepricer to manage prices autonomously, with no further supply changes. Meanwhile, FAMI had no clear issuer and no stock redemption mechanism, bearing no relation to actual Farmmi shares. In contrast, official Robinhood stock tokens are issued by Robinhood Assets (Jersey) Limited and only allow authorized participants to subscribe and redeem.

Rune later clarified that the acquisition post was generated by Claude, with fabricated or exaggerated figures, and that the on-chain FAMI was not issued by him.

Following the reversal, FAMI and JINQIAN both plummeted, with market caps dropping to approximately $4.9 million and $2.7 million respectively, a sharp contraction from their peaks.

This may be a microcosm of the recent FOMO sentiment on Robinhood Chain: the mechanism was fake, the narrative was fake, but the on-chain attention was real, even spilling over to Nasdaq. For the market, this farce pressed a cooling button on the rising sentiment.

Sixty Percent of Players Lose, While Robinhood Chain Rakes It In

For ordinary players, in an on-chain casino that seems full of opportunities, only a few can truly walk away with profits.

Dune data shows that over the past 30 days, the proportion of traders on Robinhood Chain who realized profits and losses (those who sold at least once) was 40% and 60%, respectively.

On FOMO App, one of the main trading terminals on Robinhood Chain, the situation is even more brutal. Dune data shows that in the past 90 days, FOMO App had approximately 477,000 trading addresses, of which over 441,000 were losing addresses, accounting for about 94.27%; only about 27,000 addresses were profitable, about 5.7%. In other words, on average, out of every 100 trading addresses, only about 6 realized profits, while 94 were in a losing state.

More notably, some traders' losses were quite high. About 63.6% of trading addresses lost less than $100, but about 30% lost more than $500, with 8.9% losing over $1,000, 7.3% losing over $5,000, and even 3.98% losing over $10,000. On the profit side, among the few profitable addresses, 87.5% had profits under $100, and only about 0.14% achieved profits above $1,000. This means most addresses had quite limited profits.

Meanwhile, Robinhood Chain's rising transaction costs are squeezing players' already limited profit margins.

Token Terminal data shows that as of September 1, Robinhood Chain's average transaction fee had risen to $0.33, up more than 64 times from early August. In comparison, Base's average transaction fee over the same period was only about $0.0026, and Solana's about $0.013. During peak trading of popular meme coins, congestion, failed retries, token issuance platform taxes, and routing losses stacked up, making the actual cost per transaction far exceed this level. However, Robinhood's official wallet still provides fee subsidies for eligible swaps, with subsidies lasting until September 29.

Rising transaction costs mean higher entry barriers for players, but for Robinhood Chain, they also mean stronger revenue capture capability.

According to the latest arbdata data, its cumulative fee revenue has risen to $18.6 million, a record high. Meanwhile, Blockworks data shows that as of September 2, Robinhood Chain's Layer 2 gross profit margin reached as high as 97%. The climbing fees also reflect the ongoing heating up of on-chain trading activity.

For players, the hotter the on-chain activity, the more expensive it is to seize opportunities; for Robinhood Chain, it is a growing revenue bonanza.