Robinhood Chain

Transcript

I think before we start, we should probably give a round of applause to Johan and his team for bringing on the bull market because before Robinhood chain launched, it was pretty dead and since they launched, you know what's happened to the Bitcoin price. So maybe just like a quick round of applause to congratulate them. >> Thank you. It's it's been a fun market to be to be back and it's exciting to see the price of Bitcoin coming back up. >> I must say I really think that your launch was one of the most significant and one of the most successful things to happen in in the crypto market. It happened it seemed beautifully and efficiently. A lot of money came on to chain.

I want to know how you scored internally the launch. You must have had certain expectations. How did you score the launch now that it's happened? >> Yeah, we were pretty excited. I think you know, not just seeing the communities that we were expecting to get into the chain but also getting institution CEO of public companies reaching out to have their stock tokenized. All of that really showed us that this was a new movement not just another meme coin chain for example. >> So out of 10, what would you give what would you give the the launch?

>> You know, I'm French so usually everything is bad so I will give it like a seven or eight I think. >> Amazing. So what you gave it a seven or eight. What do you think could have been better? Cuz to us on the outside, we saw one thing. You obviously had a set of expectations and and everything else on the inside. What do you think could have been better? >> I think what we really did well was not just creating a chain that was like out there. We also integrated deeply within our app. For example, we have Robinhood Earn that allows you to turn your cash into stable coin and to lend it into the multiple volts that is on the Robinhood chain just with a few step, you know, really two or three seconds and you can have money on chain.

That's available to 27 million funded account in the US. So it's probably the first time that you have distribution connected to the Robinhood chain or to any chain for that matter. Um I think what we could have done better is probably like expecting that the growth will will come as fast as it did. And so, we could have probably planned a bit more like the gas fees to make sure that it will not be too expensive for some of our customer to transact on the chain. >> So, I think there was a little bit of of pushback around gas fees, but I think that's also came because too many people came to trade meme coins on the chain.

>> That's right. Um it's it's a balance. You have to find, you know, you want to avoid the the bots that are just spamming the chain. And so, you want the gas fees to be a little high to to make it not economically viable for the bots. But you don't want to make it too high that then, you know, customers are paying for it. So, it's it's a balance to find. >> Yeah, I think the future is in actual bots and AI agents trading when and and we'll get there. Um when you spoke about Robinhood chain launching, we spoke a while back about it. I didn't expect I didn't anticipate it to be a meme coin chain. >> [laughter] >> Like did you guys expect this that much of a meme coin?

I heard Vlad talking about, you know, not being very positive to meme coins. On the day of the launch, he tweeted the the two wolves, which was that famous thing you can have both, you can have RWAs and you can have meme coins. Did you anticipate that you guys were going to be a meme coin degen chain? Like >> I I I think we always wanted the meme coin community to be there. You you know, I think meme coins serve a purpose. It brings liquidity, brings interest. Um the chain has been integrated with most of the platform. Um most of the biggest uh centralized exchange or wallets integrated with us without even us asking for for that, right?

Um so, the meme coin really helped there. What I think, you know, we were trying to say when we were saying like we want to focus on RWAs that this is where we can bring most of the value, right? We don't need Robinhood's help to launch another meme coin. That's a pretty simple thing to do. It's a simple smart contract. What we can help with our kind of technology plus our relationship with market makers and regulators is to create new product. So the stock token is a new primitive that we built where it's not just an ERC-20. We make it composable so that people can build on top of it, use it in different apps.

And that's where we think Robinhood can really bring value to the community. So I think that's more this kind of thing that we want to focus on as developers to build, but we want to make sure that the chain works very well for for meme coin and for any type of activity. So gas fees is important, super low latency is important, being able to have everything as cheap as possible for the customer is also important. So that's all the stuff that we are looking at, not just AWS. >> If I look at the transactions like they did this and now they're starting to come down. I think the meme coin hype it's not dead but it's it's just calm down yeah and probably like normalized.

If we talk again in 12 months, what do you think the activity in the chain's going to look like? What do you think people are going to be doing? >> Yeah, I I think we're just at the beginning. Look the the chain is live for not even 3 months. I think not even 100 days just yet. So if you think about the the volume that we've seen, the transaction number that we've seen, it's incredible. Like we we were the fastest growing chain for a while. We reached 100 million transaction faster than anybody else. I think what we are focusing on more is bringing more utility on the on the chain, making sure that it's more integrated with all different front ends and we will see activities doing these kind of spikes all the time. Like it's just cycles.

It's It's what happened in crypto since the beginning, right? We don't really care too much about that. We want to really focus on the type of product that we launch. Stock token is something that we're really really excited about and we're seeing a lot of demand for. But, for that, we also need utility around this token. You shouldn't just be spot trading. You should be able to use it as collateral to open perhaps position or to create options on it, like these kind of things. >> So, in 12 months, when a user has a user experience on the Rubena chain, what do you expect the user's going to be doing?

Cuz I'm trying to get a feel for how fast you think these things are going to happen and what people are going to be doing 12 months from now. >> Yeah, I think option is really something that we're excited about. Seeing stock tokens not just for US stocks and ETF, but also for private equity, also for other type of exchange. That's the kind of thing that I would expect to see basically seeing more and more Robinhood, the the classic US products that already exist out there becoming more and more on chain. >> The 20 the the the tokenized stocks you keep talking about, it seems like that's the vertical that you're most excited about.

Is that because now globally people can buy and sell stocks? Is that because of the 24/7 nature? What What what makes you guys so excited about it? >> Yeah, I I think it's the first time that anyone in the world, you know, any you you can take any place, as long as they have a phone and internet connection, they can create a wallet and they can get exposure to the greatest economy in the world. I think that's something that was not possible until now with classic brokerage system. Or, if it was possible for you, maybe you had a ton of fees and it was actually not economically viable for you to trade this type of activity. And vice versa, right? Right now, we're only focusing on US stocks, but think about about Singapore, right? We're here.

If I tell you tomorrow to ask someone in the street of New York to buy a stock on the Singaporean exchange, good luck. Most people will not even know how to get started. So, I think that type of new products that tokenization can bring is just so unique that customer will have access to way different diversified type of companies. And on top of that, at very low cost. Um So, So one aspect that we're excited about. The second one is instant settlement. You know, if you think about Robinhood, you also think about Gamestock. Something like this would have never happened if we had instant settlement. Um and so that's a big game changer. And the third part is 24/7. Uh 70% of our volume is happening on weekends or after hours when the the market

>> 70 or 72? >> 72, yeah. Uh which which is insane, right? Like if you think about that, um it it really show that the markets are not stopping on Friday nights. You know, there is a lot of news happening on weekends. People want to be able to have uh ways to hedge their position, change their strategies. Um now they can do it with tokenization. >> How much of it are you guys building at Robinhood? And how much of it are you expecting the decentralized community to build for you guys? >> I think it's a combination. Like developers are really active. Um one of our partner, Alchemy, actually published that the Robinhood chain was the most active on the development side right now. And and that's the most exciting part for me. Like uh as a uh previously as an engineer, I I want to

see more developer activity on the chain. And I want to see people building new things because we can't think of everything else that the community is thinking about. Uh for example, the idea of meme coin that are pegged to stock tokens, I didn't think about that one. >> Yeah. [laughter] I I didn't think about it either, but it's actually when you think about it, it's actually an amazing amazing amazing innovation. When I first saw it, I was like, "What are you doing? You're pairing nothing to something." And then you think about all the attention that that uh meme coin brings to that tokenized stock. And then you're like, "Hold on, this is a serious thing."

>> It's exciting. And and I think, you know, also like the fact that you can look at a specific aspect of the company, not just like the entire company, but maybe you're going to target more one particular revenue line of that company. And that's the kind of thing that, you know, we'll never think about all of this by ourselves. Or even if we think about it, we have a resources constraint, right? We can't build every single thing. So being able to rely on our community of developers, uh see what they're building out there, it's really fun. A lot of time in morning or when I'm on the plane, I look at my Twitter account and I see what uh people are building on chain. And you know, sometimes I'm like, "Okay, I'm not sure about this one." But sometimes it's really fun.

>> I must say, I'll tell you a personal story about uh meme coins paired with stocks. So, I got into a bad stock transaction. I bought a stock and it went badly down and I held it because I'm not a good trader, so I held it on the way down. And one morning I woke up and the stock was back up higher than where I bought it, which was a surprise. And the only reason why it was like that was because someone paid a meme coin with it. And so, I managed to actually get out at the same price or higher than I actually bought. So, these things these innovations actually uh have like, you know, real real-world benefits.

>> Absolutely. >> So, tokens, meme coin tokens paired with stocks was an innovation. In fact, two asset classes paired together uh with one one token was actually an innovation. What else have you seen on chain where you've like looked at it and gone like, "Hold on, that's like really interesting." >> Well, I think the the most classic example is perpetual, right? It's something that was invented on crypto. Uh TradFi didn't have that concept. We we have options, we have futures, but um so so perps is something that we're pretty excited about because you can have your portfolio of uh stock tokens.

You don't have to exit your position. You can open a new perps. Um and we're starting to see a lot of usage of that, not just by retail, but also by institution that want to improve their capital capital efficiency uh when they're trading, especially over the weekends. Um so, that's something that we're seeing a lot of innovation on and being able to, for example, do that on Lyra, which is uh an exchange that we're partnering with on the Robin Wallet for for perps. Uh we're seeing a lot more of customer utilizing this this model. So, um the other part is around AI.

Um you know, obviously it's a it's a talk of the of the year, I think. Uh but seeing the amount of people integrating with the chain directly, creating a smart wallet, uh moving things back and forth with their their different bots. But being able to do that with stock tokens really change the way that you can you can do that fractionalization. Again, instant settlement. You can move from cash to equities very quickly. So so we're also seeing a lot of development on that. >> I must say the being able to use stocks X stocks as tokenized stocks as collateral for perps positions is >> Yeah.

>> Yeah, it it unlocks so much more capital, so much more trading volume. You mentioned Ladder and you had your Robinhood out of space conference the other day. >> Which was amazing, by the way. You guys >> a lot of fun. >> Yeah, it it was really amazing to watch. Um I think one of the disappointments was around Ladder. I don't know if you saw the Ladder chart, but the price went up and the price went down. I think everyone was expecting you guys to announce that you were doing perps on Ladder and you announced that you were doing it on an exchange that you guys already own. Is there a partnership with Ladder? Like is there >> We we we have a partnership with Ladder.

It's integrated with the Robin Wallet. So when you open perps position on on the Robin Wallet, it will go directly on on Ladder. Um on the on the centralized exchange on on Robinhood, we are using Bitstamp, which is the exchange we acquired a couple of years ago. And and for us, the the main reason for that is we wanted to offer a regulated product. Uh Bitstamp is licensed in the EU under MiFID. And it was important for us to also being able to support like more type of products. But it doesn't mean that we won't do more with Ladder. I think it just mean that for that current product that we launched last week, uh we we are currently using Bitstamp, which is the same product that we launched also in other places like in the EU.

>> So to clarify how it works is if you're trading centrally in the app, you're trading through Bitstamp. But if you're trading from the wallet, your swap is going is being directed through Ladder basically. >> That's exactly right. >> Yeah. Um so the app and the wallet, how how much of the how many people what percentage of the Robinhood base on the app have interacted with the chain? >> Well, so that's one of the thing that is really exciting is because of the earn product that we have within the app where we create a smart wallet. We actually have now exposure to the chain to to millions of customers.

Um the wallet is a bit different. It's a self-custody wallet, so it's uh available in 120 plus countries. Um so so we are seeing a different user base than the one that we have in the US. But um we're just at the beginning of kind of converging the two type of tag, but we expect to integrate more and more the Robin chain within the Robin app. And that way you can get the 27 million uh funded account in the US to interact with it. >> So currently if I if I if my numbers are right and they may be wrong, I think you got 24 million customers to 24 million >> On on crypto, yeah. >> On on crypto? >> And how many in the Robinhood app come >> Uh it's about 27 million in the US, 28 million funded account across the world.

>> So that's 55 million more or less. And how many actually have interacted with the chain in any shape or form? >> I don't have the number because you know, wallet is always complicated. Uh you can create multiple wallets, so it's it's it's always a bit funny to to calculate. Uh but we are seeing, I believe, about 20 million wallets that are active on the chain right now. >> If I were to think about Robinhood's 100% of their resource allocation. And when I say resource allocation, I don't mean current resource allocation, I mean share of share of mind, share of investment in the future.

How much of that is going into crypto and how much of that is going into everything else? >> Um so, you know, Robinhood is a super diversified company. Uh we have 13 different business line that are making at least $100 million uh in revenue. Um so it's really creating a situation where no matter the market condition or no matter the cycle, is it is it a crypto boom or is it a crypto winter? Uh the company is able to balance the revenue from different business line. Um on the crypto side, we are definitely at the frontier, I will say, of of innovation. We want to push on the blockchain, we want to push on perps, we want to push on tokenization, all these things that, you know, when you look at the incumbents like you look at the other big brokerage in the US, they are

not thinking about that, right? So, we want to push on that a lot. The other thing that we've been really focusing on is AI. Last week at the event, we announced a lot of things where you can build loops within the the the infrastructure and we want to do that more on chain as well because right now, I think that people are still thinking about AI just more as a way to get information, not as a way to trade, but we actually see the opposite on chain. People use AI to basically be a 24/7 traders on chain. >> Why do you think that it's so important for Robinhood to win in crypto? Or why do you think Vlad, I know you think that because you're the head of crypto, but why do you think Vlad is so he's come out and he's become he almost

become like a main crypto figure. I mean, I don't want to compare him too much to Brian Armstrong, but Brian Armstrong's been pushing in the trench not in the trenches trenches, but in the crypto trenches fighting for legislation for a long time. And Vlad rocks up and Vlad becomes a main character and he's taking it very seriously. Why do you think it's so important to him? >> Well, I think there are two aspects. One is we were always really very focused on crypto. We actually launched crypto in 2018 at the bottom of the winter cycle. >> I remember.

>> And that tells you how much we wanted to give access to our customer to this product. A lot of people were asking to be able to access crypto and also access brokerage and all the other services that we have. The other part is that a lot of time we are maybe a bit more quiet on some of the of of what we are doing, but obviously for example, with regulation, we've been working for a very long time to bring regulation to the US so that we can launch products across the the 50 different states. We have licenses across the world. We've been doing a lot of work uh, you know, outside of the stage, but we are still very involved and I think the chain is just like the moment where we wanted to really make it visible that we've been doing something big because again, like the idea of

bringing 28 million funding accounts on chain is just the only the only company capable of doing that is is Robinhood >> So, I'll say this. Um, you've done a lot for us because before you guys came, we were in the pits of a bear market. Everyone was waiting for like one big leg down in in October and I think uh, I want to say that you know, the launch of the Robinhood chain brought attention back to crypto and maybe it was semi-responsible for the the market going up. What what can we do for you? What like there's people here, everyone here as a community member is a you know, in crypto it's about community. What do you guys need? You seem like, you know, you're the big American behemoth and you're just you know, you're growing internationally, but is there something that you need from the crypto community

that we can give back to help you guys in in your journey? >> Yeah, [snorts] we we want to hear from the developer. You know, there's a lot of things doing very well for the chain, but we also know that there are problems. So, we want to hear what's not working, what are you expecting for us to build, what are the primitives that you need to really build your net your next like application. And so, you know, tell us what's going on and reach out to us on Twitter or on other platform. We we've been looking at them and we are you know, trying to make sure that the road map aligns with what all developers are looking for. Um, and there's a lot more coming on the chain.

Like I said, it's it's 3 months in, so we're still at the very beginning of our development cycle, but the road map is full and we're going to make sure that the chain continue on on its journey. Uh, Johan, I'm very respectful of your time because your chief of staff warned me that if I don't have you off exactly on time, he's coming to drag you. So, thank you very much, guys. Thank you very much. I think a big round of applause for Johan and for Robinhood. >> Good. Thank you.