On July 1, 2026, Robinhood launched Robinhood Earn, a feature that advertises a 7% yield on stablecoin deposits. In a brief paper, @cryptoeconprof and I investigate how Robinhood Earn works, and how that 7% rate is produced. 🧵
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When a user enables Earn, their USDG, a dollar-pegged stablecoin, is deposited into a lending vault built on the lending protocol Morpho and curated by the advisory firm Steakhouse Financial. Deposits are exchanged for vault shares, a pro rata claim on the vault's holdings.
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The vault then lends the USDG through Morpho lending markets to borrowers who post collateral and pay interest. The vault's lending yield has hovered between 2 and 4% over the past month. So how do depositors receive 7% returns?

Aug 6, 2026 · 6:48 PM UTC

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A rewards system called Merkl adds a top-up to the lending yield to reach the advertised 7% target. These rewards are claims on a reserve of vault shares that was funded in advance, and the campaigns paying them run on a fixed budget through July 1, 2027.
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So far, one month in, over 20% of the reserve has been claimed and no automatic replenishment exists to continue financing the top-up once the reserve runs out.
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For more detail, data, and further resources, check out the full paper: papers.ssrn.com/sol3/papers.…
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