What is about to be replaced behind Base and the Robinhood Chain
Justin Blends, the founder of BlendsGroup, which I also co-manage, follows up on his previous thought-provoking video by explaining how to interpret the actual market through the lens of recent trendy themes. (There is a video link at the end of this article.)
The real battle for DEXs lies in the 'migration of liquidity'
In the crypto asset market, talk about prices going up or down inevitably stands out.
However, the real changes in the on-chain market are happening a bit deeper than the price charts.
That is the migration of liquidity.
From one chain to another.
From one DEX to another.
From one token pair to a more profitable pool.
Capital is not just sitting there.
It moves to places with better conditions, concentrates, and at times, weakens the very market that existed until then.
An important perspective when considering this movement is
DEX liquidity pool displacement
.
This is not simply a story about 'liquidity increasing' or 'TVL going up'.
As liquidity gathers in one place, it is drained from another.
As a result, price formation, trading environments, user experience, and even the value of the chain itself change.
In other words, the migration of liquidity is also the replacement of economic zones in the on-chain market.
Liquidity pools are not just places to store funds
DEX liquidity pools are often explained as 'a mechanism where two types of tokens are deposited so that users can exchange them with each other'.
Of course, that is not wrong.
However, if you only look at liquidity pools as simple fund boxes for exchange, you will not be able to see the changes happening in the on-chain market.
A liquidity pool is the very essence of tradability in that market.
How large a trade can it accommodate?
How much can one buy or sell without disrupting the price?
Which tokens are used, and which are avoided?
These are determined by where liquidity resides.
Trades gather in pools with deep liquidity, and where trades gather, market makers and liquidity providers gather even more.
Conversely, in pools where liquidity has been drained, even small trades cause significant price movement, slippage increases, and users drift away.
Thus, a market that once functioned gradually falls into disuse.
This is less of a technical issue and more of a market reorganization driven by capital.
Displacement is not the 'addition' of funds, but their 'replacement'.
When a new chain or DEX appears, it is often described as 'new liquidity coming in'.
However, in reality, it is not always the case that only entirely new funds are flowing in.
In many cases, the capital already exists somewhere else.
Liquidity that was on Ethereum moves to Base.
Assets that were on centralized exchanges move on-chain.
Liquidity providers that were on existing DEXs move to other DEXs in search of higher incentives.
In other words, liquidity is not just newly created; it is reallocated through movement.
What is important here is not just to look at the destination, but to look at the source.
When the TVL of a certain chain is increasing, where did that capital come from?
When a certain liquidity pool is growing rapidly, is capital being drained from another pool?
Is it just temporarily gathering liquidity through high yields, or does long-term trading demand exist?
If you misjudge this difference, you will mistake superficial growth for fundamental growth.
Base is not just competing for user numbers.
Base occupies a different position from many other L2s in that it can connect with Coinbase's user base.
If Coinbase users can transition directly into an on-chain environment, what will flow into Base is not just a number of new wallets.
It is trading capital, stablecoins, liquidity providers, app users, and market makers.
In other words, what Base is aiming for is not just an L2 that supplements Ethereum's processing capacity, but an on-chain economic zone where capital is actually utilized.
What could happen here is liquidity pool displacement.
If sufficient liquidity gathers on DEXs on Base, users will no longer need to go out of their way to move to other chains.
Trading, payments, lending, token issuance, and stablecoin usage will all be completed within a single ecosystem.
When that happens, liquidity will not just be added to Base.
The trading demand itself that existed on other chains and DEXs may be replaced by Base.
Another strength of Robinhood Chain
Robinhood Chain should also not be viewed merely as a new blockchain.
Robinhood already has users who are buying and selling financial products.
If this user base is connected on-chain, a chain with a certain level of trading demand from the start could be born.
Many blockchain projects look for users after they have built the chain.
However, in the case of Robinhood, they already have a point of contact with users.
This difference is significant.
This is because the value of a liquidity pool is not established just by liquidity providers depositing funds.
People who actually trade are necessary.
Trading occurs, fees are generated, market makers participate, and further liquidity gathers.
If Robinhood Chain can create this cycle, it has the potential to attract both trading and liquidity from existing DEXs and trading platforms.
It is not just a TVL competition.
It is an attempt to replace the very behavior of financial users with on-chain activity.
Liquidity does not take root through incentives alone
New DEXs and chains offer high yields and token rewards to attract liquidity.
As a result, TVL may surge temporarily.
However, liquidity gathered through high incentives will move immediately if higher yields are offered elsewhere.
In this state, even if liquidity exists, the economic zone is not stable.
What matters is why that liquidity is there.
Is it placed there for rewards?
Is there actual trading demand?
Do stablecoin or payment demands exist?
Are there applications that will be used long-term?
You cannot judge the strength of a market by looking only at the amount of liquidity.
You need to look at the reason why liquidity has gathered and what will remain after the liquidity is withdrawn.
In low-liquidity markets, small movements create huge price changes
Liquidity pool displacement is particularly significant in markets where liquidity is still shallow.
In tokens with low liquidity or on new chains, even relatively small capital movements have a major impact on the entire market.
Just because the price has surged does not necessarily mean that huge buying demand has occurred.
It is possible that there were simply few tokens available for sale, and the price was pushed up by even a small amount of capital.
Conversely, the price can plummet just because some liquidity providers have withdrawn their funds.
For this reason, you cannot understand the true state of the market based on market capitalization or price alone.
What you should look at is the depth of the liquidity supporting that price.
And by whom that liquidity is provided, and under what conditions it is maintained.
Low-liquidity assets that have the potential to increase 100-fold also carry the possibility of becoming unsellable the moment liquidity disappears.
Large upside potential and significant exit risk are born from the same structure.
Where do market makers create markets?
Market makers have a significant influence on on-chain markets.
In markets where market makers participate, the spread between buy and sell prices narrows, making it easier to execute large-scale trades.
As a result, it becomes a market that is easy for general users to use as well.
However, market makers do not allocate capital equally across all chains and DEXs.
Trading volume, fee revenue, incentives, chain stability, counterparty risk, and future growth potential.
They choose where to place their capital while observing these factors.
If Base or the Robinhood Chain create an attractive environment for market makers, liquidity will gather there.
And as liquidity gathers, trading volume increases further.
This is a powerful network effect.
On the other hand, on chains that have lost liquidity, the trading environment may deteriorate, causing users to leave and market makers to withdraw.
Displacement moves not only liquidity but also the market participants themselves.
What you should really be looking at is not where it went, but where it left from.
When a new Corporate Blockchain appears, many people look at the inflows.
How much has TVL increased?
How many users have increased?
How many tokens have been bridged?
However, from an operator's perspective, that is not enough.
What needs to be confirmed is the next move.
Where did that liquidity come from?
Is the same capital just moving between chains?
What kind of void is being created in existing markets by the movement of liquidity?
Is trading volume really increasing, or is it just a temporary cycle driven by incentives?
Will users and apps remain after the liquidity is withdrawn?
By pursuing these questions, the economic structure behind the superficial numbers becomes visible.
The true winner of Corporate Blockchain is the place that anchors capital
The competition between Base and Robinhood Chain is not merely a comparison of chain performance.
Which is faster?
Which is cheaper?
Which has more apps?
Of course, those are also important.
But ultimately, where liquidity gathers and where continuous trading occurs will be decisive.
Gathering liquidity alone is not enough.
That liquidity must be used, generate fees, support applications, and retain users.
The true winner of Corporate Blockchain is not the chain that temporarily gathered the most funds.
It is the chain that transformed liquidity into a sustainable on-chain economy.is.
Follow the liquidity
There is a saying, "Follow the money."
However, in the on-chain market, we need to look one step deeper.
Follow the liquidity.
Where is the liquidity moving?
Where is it concentrated?
From which markets is it being lost?
By following those movements, you can see not only the next growing chain, but also the markets that are about to weaken.
DEX liquidity pool displacement is not a discussion about technical mechanisms.
It is a discussion about which on-chain economic zone capital will choose and which it will leave behind.
The real battle between Base and Robinhood Chain is not a technological competition of blockchains, but
a market reorganization centered on liquidity
as its core, has already begun.
At BlendsGroup, we interpret the knowledge necessary for the coming era, such as crypto assets and AI, not through superficial news, but through actual business and market structures.
For more details, please visit the BlendsGroup community.
BlendsGroup Community
https://join.blendsgroup.xyz
CoinWins is an app for analyzing crypto asset price movements, learning rule-based trading, and putting it into practice. By utilizing 'Market Pulse' to check market conditions and proprietary indicators, it supports more planned trading that is less susceptible to emotions.
Reference links:
Base/B20 related
Base Official: Beryl Upgrade Overview
You can check the B20 standard introduced in Beryl, the reduction of withdrawal waiting periods, Reth V2, etc. Beryl was activated on the Base mainnet on June 25, 2026.Base Official: B20 Token Creation Guide
B20 is a standard that operates as a native precompile for Base while maintaining ERC-20 compatibility. It is suitable for sections explaining mechanisms for stablecoins and RWA.
Robinhood Chain related
Robinhood Official: Robinhood Chain Mainnet Announcement
Official announcement on July 1, 2026. You can check the mainnet, Stock Tokens, DeFi, and AI agent trading concepts all in one place.Robinhood Chain Official Documentation
It is organized to show that it is an Ethereum-compatible L2, uses Arbitrum Dedicated Blockchains, uses ETH for gas, and places importance on RWA.Arbitrum Official: Robinhood Chain Mainnet Explanation
Explains how Robinhood Chain utilizes the Arbitrum Platform and adjusts performance and fee structures for financial services.
