RELAY: A Dividend Routing Layer for Tokenized Equities

01Background: equities on Robinhood Chain

Robinhood Chain is a public Arbitrum-Orbit L2 operated by Robinhood, carrying tokenized exposure to listed equities. Stock Tokens are freely transferable ERC-20s issued by Robinhood Assets (Jersey) Ltd, each backed by underlying share exposure and tradable against USDG, the chain's dollar e-money token, on standard AMM liquidity.

Crucially, the tokens implement ERC-8056 ("scaled amount"): a holder's raw balance is constant, while a contract-level uiMultiplier defines how many economic shares each token represents. Chainlink price feeds on the chain quote the multiplier-adjusted price, and every multiplier change emits a public UIMultiplierUpdated event.

02The invisibility problem

When a portfolio company pays a cash dividend, the issuer reinvests it into additional underlying shares and increases the token's multiplier. The design is elegant — tokens track total return — but it has a consequence: dividends on Robinhood Chain are invisible. They arrive as an accounting change, not a payment. Holders cannot see them, spend them, or direct them. As of this writing, AAPL's onchain multiplier stands above 1.0 from its August 2026 distribution; the value is real, public, and unnoticed.

RELAY's thesis: the income component of tokenized equities should be as legible and programmable as the principal. A holder should be able to keep full price exposure while receiving the dividend component as money they control.

03The harvest mechanism

Each supported asset has an isolated vault. Depositors receive a 1:1 dv-token and retain their full share exposure. When a verified cash dividend raises the multiplier, the vault realizes only the increment:

Share exposure is preserved by arithmetic rather than promise; a property test over the vault requires that no harvest may exceed the increment by a single wei. Because harvests are sized by dividends (typically 0.1–1% of vault value per quarter), routine AMM liquidity is sufficient to execute them chunked, slippage-bounded against the oracle price, and deferred to a later epoch whenever pool depth falls below threshold.

Entry and exit

Because most participants hold crypto rather than stock tokens, entry is a two-leg atomic zap: USDG or ETH swaps into the target stock token on chain liquidity (leg one), which deposits into the vault and mints Dividend Blocks 1:1 (leg two) — one transaction, full revert on any failure. Exit mirrors the path: blocks unwrap to the stock token and optionally swap back to crypto. Fees are itemized per leg (0.30% pool fee, 0.10% wrap fee) with a 0.50% slippage bound.

04Corporate-action safety: dual attestation

A multiplier change alone is ambiguous — a 2% jump could be a dividend, or one leg of a split whose price adjustment lands in the same window. Harvesting a split would liquidate principal. RELAY therefore classifies an event as harvestable only when two independent attestations agree:

• Declared calendar: a published cash dividend with matching ex-date and per-share amount;
• Observed effect: a multiplier move of ≈ amount ÷ price within tolerance, with oracle price continuity across the event.

Splits fail the test by construction and are recorded as re-basings; unclassifiable events freeze the vault until resolved. The issuer's own controls reinforce this: large corporate actions on Robinhood Chain execute inside scheduled pause windows signalled by oraclePaused(), which RELAY treats as an automatic harvest freeze, as it does market closures. Harvesting is additionally rate-limited to 5% of vault value per epoch regardless of classification — a hard ceiling on the blast radius of any mistake.

05Yield sources and accounting rules

Every unit of yield carries one of four source tags, separated at the ledger level and never blended in display:

• NATIVE — harvested dividends of the depositor's own asset. The only source the product may call a dividend.
• NETWORK — distributions from the opt-in cross-asset pool (§6).
• PROTOCOL — wrap and routing fee revenue shared with network participants.
• SPONSORED — streams from prefunded sponsor escrows, displayed with sponsor identity, remaining reserve and end date. Campaigns exist only as escrowed USDG; the interface reads escrow balances, never promises.

Display rules: blended APRs are always decomposed; projections derive from declared forward dividends, not extrapolated history; a sponsored figure is never presented as a corporate dividend.

06Network economics: sharing without draining

Naïve cross-asset pooling fails predictably: if zero-dividend assets are paid from dividend payers' income, payers exit and the pool collapses. RELAY splits the network pool into two buckets with different funding and distribution rules, never mixed:

Bucket A — dividend tithe

Network-mode vaults tithe 10% of harvested dividends. Distribution weight is 70% dividends-contributed and 30% time-weighted value, so the bucket mostly returns to contributors; the solidarity slice is deliberate, visible, and capped — participants of any vault may draw at most 3× what that vault contributed.

Bucket B — activity yield

Funded by protocol revenue and 100% of sponsored campaigns — never by depositors. Distributed by time-weighted value with a modest lock boost (×1.0 → ×1.3 at 90 days). Zero-dividend assets earn here, from real activity, not from other people's dividends.

Worked example Illustrative

$10,000 each in SPY, NVDA and TSLA for one year; trailing yields ≈ 1.2%, 0.03%, 0%; protocol fee 5%; tithe 10%; Bucket B carrying $65 of protocol and sponsor flow across the three:

Read honestly: SPY outperforms native mode only because Bucket B exists. With no sponsors and no protocol revenue, network mode costs contributors a visible ~2.6% of their dividend — a trade-off the interface must show at opt-in, never hide.

Anti-gaming

All weights use time-weighted average balance: depositing the day before a distribution earns a day's weight, making record-date sniping unprofitable without lockups. Native dividends accrue to whoever held across the ex-date snapshot, pro-rated by TWAB. Network membership is optional per position, switchable effective next epoch.

07The router and settlement

Holders allocate each settlement across four destination types — reinvest into the source asset, the network pool, another supported asset, or USDG to the wallet — in any split totalling 100%. Rules are entirely user-authored; the protocol exercises no discretion and charges no performance fee.

Yield accrues continuously and settles in weekly epochs, batching harvest, conversion, allocation and provenance into one transaction set per vault. Failure containment is structural: a router leg that cannot execute (thin liquidity, slippage bound) settles as USDG to the user; a vault paused mid-epoch accrues rather than loses; sub-threshold dust rolls into the next epoch.

08Architecture

Offchain, a display-only indexer serves history and analytics while all money math stays on live RPC reads; a corporate-action watcher submits attestations; settlement is keeper-triggered but permissionless after a grace window, so the protocol cannot be held hostage by its own operator.

09Risk model

• Misclassification (worst case): selling principal on a split. Mitigated by dual attestation, issuer pause windows, and the 5%-per-epoch harvest ceiling.
• Market microstructure: harvest sandwiching and thin pools — hard slippage bounds against oracle price, chunked sells, epoch deferral below depth thresholds.
• Oracle failure: staleness windows and DEX-TWAP cross-checks pause conversions; withdrawals are never blocked by oracle state.
• Issuer centralization: the underlying tokens carry issuer pause, burn and upgrade powers that any wrapper inherits. This is disclosed, not engineered away; isolated vaults and per-market caps bound the exposure.
• Governance: instant powers are limited to pause; every other change queues through a 48-hour public timelock.

10Legal and jurisdictional posture

Wrapping third-party security tokens and redistributing dividend-derived value implicates securities, collective-investment and e-money regimes across jurisdictions. RELAY's posture is sequencing, not evasion: the observatory (live data, read-only wallets, simulated yields) operates today precisely because it custodies nothing and offers nothing; vault deposits, network pooling and sponsored campaigns launch only in structures cleared by counsel. The underlying Stock Tokens exclude US, UK, Canadian and Swiss persons; RELAY inherits and will enforce those exclusions.

11Status and roadmap

• Now — Observatory. Live multipliers, prices, holders and wallet inspection over real chain data; real EIP-6963 wallet connection, strictly read-only; the complete product experience with simulated yields.
• Next — Contracts. Vault, harvester and registry, fork-tested against the live chain; private pilot under deposit caps.
• Then — Launch. Public native vaults and router post-audit and legal review; network pooling and campaigns in counsel-approved structures.

A concrete near-term catalyst: SPY's first ex-dividend date since mainnet — the first S&P 500 dividend processed onchain, observable in RELAY the moment the multiplier moves.