Robinhood's Head of Product Reveals How Robinhood Chain Hit 200M Transactions in 30 Days

Transcript

Stock tokens at its core form is a token that represents a debt security against the underlying. As a holder of the token, you have both the ability to redeem the token for the value of the underlying >> um and the even in the long term in the event that for some reason you know Robin ever goes bankrupt >> um you as the holder even if Robin you know is no longer here we work with a third party security agent where holders of the token are able to redeem that token for the value of the underlying.

So we really designed this token to be future proof in many senses of the word. Welcome everyone to the converge podcast at the Defiant. Today I'm here with S Lee. He is head of product for Robin Hood crypto. It's great to have you here at the Defiant. Welcome. >> Oh, thank you. Yeah, excited to be here. >> Yeah. Well, and it's been quite an exciting month for Robin Hood crypto. Fantastic news around the launch of the the chain. Can you walk us through about what's the latest and greatest there?

>> Yeah, so we launched uh the Robinet chain um on July 1st alongside our um permissionless stock tokens product um and a couple of key upgrades to our Robined wallet. Um and alongside that our first native um embedded D5 product on the Robin Hooded app and since then the uh reception from users, developers, institutions has been definitely very um exciting and invigorating to see some stats that we've shared publicly. I think we're the fastest EVM chain to hit 100 million transactions. Now we are at 200 million um since that post. um and

uh billions of dollars in decentralized exchange volume on the chain as well. And before we got here, I think our earned product is at around, don't misquote me the exact number, but it's around 275 million before I got here and still rolling the product out. So, the reception has been great. Yeah. >> So, it's a larger than base now in terms of like the largest like L2s out there. So, I'd say our TVL is still growing. Um, I wouldn't call our TVL the highest. I'd say that the activity that we're seeing on the chain is really encouraging in terms of people transacting on the on the chain. Um, but I would say our TVL is still growing and

>> but and who is using the network and what what are they using it for? >> So, that's what's really interesting. Um, we have both users that have never used crypto before using the chain through our embedded DeFi product on the Robined app called Robin and Earn >> and that's what's really interesting to us because it's users that might not be crypto natives where we've offered a product that is a really good financial product uh for users but crypto is the u backend for that product. Other users of the chain include obviously developers, people who are developing on the chain, stock token developers, um other types

of developers um on the chain as well. And obviously there's also um lots of trading activity that's also happening on the chain. So I would say it's a wellbalanced mix of activity um which we're happy to see. And out of like those 200 million or so transaction, if you have it like top of mind, how much of that is coming from people who were already in that first group of people who were in the Robin Hood ecosystem and how much of that is coming from DeFi and people who are like cryptonative first and then getting into the Robin Hood chain. So it's a little bit different because um you know the the Robin Earn product is not a uh high transaction product because it is

>> um we allow users to access DeFi lending protocols and that type of action you're doing maybe once or twice a day. So when you're talking about the 200 million number of transactions, the overwhelming majority of that is going to be decentralized exchange volume because that is the type of activity that drives a lot of transactions. It's a different story for TVL. Now TVL of the um of the many million on there a large part of it is the earn product. Yeah. >> Right. So you have unis swap, pancake swap, all of them basically building support for Robin Hood chain correct and creating their own dex volume there.

>> Correct. >> It's fantastic. And in terms of the Robin Hood earn product, it's defi native product, it's those are morphs in like correct behind the scenes. Um and out of like thinking about that end user uh who might be going into like a DeFi product for the first time, how are they learning about the type of exposure they're getting, the type of asset that are actually is involved, whether they're taking like smart contract risk and what challenges have you had in terms of communicating that making them familiar or aware of what they're actually getting? Absolutely. So when we

think about products like this, we think about it in two levels. The first level is the product experience good and compelling to a user. So obviously today users can access 7% through the rabbit earn product. The second part is how do we offer it in a way that is transparent and safe to the user. >> And for us we thought about this at two levels. The first level is um insurance. So users that access the product we um have procured insurance for users lending through the earn product. The second is education. So both through as you're going through the product um you both have enough education to understand what you're actually enrolling into.

>> Um we also don't shy away from the risks of the product. there is a fairly um I would say um fairly clear uh enrollment process for users that are in enrolling in this for the first time. The last part is we're also encouraging um education through our learn and earn for this experience as well where users will be able to earn um a small amount of crypto for learning about parts of the Robin Earn product. Yeah. >> Nice. Is this available like Robin Hood earn like the crypto-based uh product is available in what type of jurisdictions?

Do you have to be a like a onboarded client to use this? How does that work? Is it part of like the wallet experience that's open to anyone anywhere? >> You do have to be um a Robin user meaning that um it's one available in the US. Okay. not available in certain states, but it's available in the US and you do have to be a routed customer in order to access this product. >> Nice. >> Yeah. >> And how do you think about the this being a more attractive path to what you're seeing other players do that have gone through the like stable coin yield type of approach.

You have Coinbase and PayPal with stake your stable coin. That's how you could yield. if and understand correct you're also part of the global dollar network and tell me about like the the rationale or the thinking of going directly with like a yield bearing asset that's based on lending as opposed to sharing the yield on stable coin reserves. >> So I don't think um you know these products are all mutually exclusive. I wouldn't say that we aren't going to do some of these other products in the future. Um, but for us, we just started with what do we think is the best experience for customers um that we

think we can offer. And the conclusion that we got to is offering uh native DeFi access to a decentralized lending protocol as one of the first products on Robinet Chain to our users um would offer that experience. And so far from the traction that we're seeing from customers, we think we made the right decision and um yeah, overall the reception has been has been uh great. Yeah. >> Do you and users see this as part of their like investment portfolio or do they see it more of a like a savings product that will be more closely attached to to your like deposits?

Where does this sit in their like risk return type of like mindset? >> Sure. uh it is still early days and we are very clear that this is not a savings product. This is a DeFi product where you have control of your wallet and you're lending to a decentralized lending >> protocol. Um and it's been 30 days since the launch. I can't say that there's a one mental model that users are anchoring themselves to. >> Um but I think you can see this publicly actually on the vault itself. We do have users that are lending um quite large amounts and I think some of them um it wouldn't be so far-fetched to say that some of them do see it as a good way to diversify parts of their um of their wallet share. Yeah.

>> Amazing. And how were you able to ensure this? Like how does that work? Who is insuring this? >> Yeah. So we're working with um Lloyds of London and Realm um to ensure the product. Um I'll be honest the list of things and the disclosures for the insurance are quite long. So uh we'll be able to help send that over and it's I get the point. But so you have today traditional insurance player who are comfortable underwriting sort of like smart contract token vault risk which is pretty amazing considering how hard insurance has been for for crypto. Well, onchain insurance probably is a bit harder than being able to remedy after the fact. Um, but that's the

normal. It's a pretty good balance for end users. Um, so as an end user, do I get like a slightly lower yield than I would get if I was just going into a morpho vault on my own? >> I mean, it depends what type of vault that you're engaging with. Um, I don't want to make any declarative statements with what's going on with Morpho. I'd say the rates that you're getting on Robin Chain through Morpho are um, as of today very competitive. Obviously, we don't control the rates, but yeah. >> Fantastic. Okay. And then switching over to the the more DeFi native um, people who are adopting the blockchain. Um it seems like Robin Hood has been

responsible for bringing life back to memecoins. Um so can you share a bit more about that that activity? How does it fit between inside your like strategy? Was this part of the plan all along or is was were you surprised by it? So I'd say like our plan is to encourage the best developers on Robinet chain. >> Um we are uh excited to see the activity happening across all types of trading on the chain. Um memecoins included, RWA is included and sometimes the mix of both as well. And so um I would I would say our plan is that we want to make sure

that the Robinet chain is a great place for um for example applications like decentralized exchanges to exist and I think the activity that you're seeing on um areas like memecoins is a outcome of us making sure that the chain is great performant and can handle really high throughput. And but is it really different? Like we've had like countless L2s. There are so many like platforms where you can build on. What's unique about Robin Hood chain? Is it I would presume is the ecosystem that you guys are bringing because you're bringing people who are coming from who are more traditional investors and that might create some sort of like synergy between the people there. Is is that is there

something technical about it that makes it special? What's the like the secret sauce there. >> Sure. I mean, at a at a technical level, I would say our L2 is extremely performant. Um, our block times are 100 milliseconds >> um and designed to handle really high throughput. And um yeah, I'd say like we we've definitely made some good strides on the on the infrastructure part. The second part is we're the first um L2 to launch natively with stock tokens as a a core part of the chain itself. And I think um that offering has resonated with developers that um you know as they're building the next generation of financial products on Robinet chain um

they can access these new types of primitives as part of the chain's core offering. Um and I think I think that's a first for a lot of developers. >> And that sounds like the a dream that somebody might have had a couple of years ago. you know, people were getting into a lot of trouble trying to get stocks natively on chain. Um, let's get into stock tokens then, which is fascinating. Can you walk me through what stock tokens are in their new iteration, >> who can buy them and how are they different from previous attempts at tokenizing equities and so on.

>> Sure. Um so stock tokens at its core form is a token that represents a debt security against the underlying. As a holder of the token, you have uh both the ability to redeem the token for the value of the underlying >> um and the even in the long term in the event that for some reason Robinet ever goes bankrupt >> um you as the holder even if Robin is no longer here we work with a third party security agent where holders of the token are able to redeem that token for the value of the underlying. So we really designed this token to be futurep proof in many senses of the word. Um the way it's designed it is a highly regulated product. Um it's issued out of

um lichenstein today live um primarily across the DeFi ecosystem. Um you can access it uh ideal you can access it in non-restricted jurisdictions um >> across a variety of decentralized lending protocols. I know that there's unis swap LP pools that are live on it. Um there's prop ammms that offer it. Um we work with partners like uh lighter and arcus um who also offer this on their products as well. Um but it is a permissionless uh stock token and >> um what that means is that uh as long as you're not in a restricted jurisdiction um various defi applications are able to

offer this token. >> Okay. Uh let me try to unpack that and >> see if I like understand it correctly. >> Okay. So there's an issue there's like an SPV in Lenstein that holds the underlying asset which is US registered equity uh in their balance sheet let's say. So SPV in Jersey that holds um the underlying um and the actual token is issued out of Lichinstein through the the the regulation there.

>> Perfect. And they have a claim to those assets that are in in Jersey. >> Correct. >> Perfect. So if I go here uh in the US and I'm going to see who's registered owner of the shares, I'll find the Jersey entity. >> Correct. >> Perfect. Uh great. >> Of the underlying, not the token. Yeah. >> Yeah. that underlying like security they raise their stock here. Perfect. >> Um, which might be custody somewhere in the DTC or something traditional. And then we have this uh entity that's regulated in Europe that is able to create this sort of like um debt type product where I have a claim to the assets of the of that >> the value of the value

>> and that entity is able to issue a bearer asset. So I don't have to so that's how it can be permissionless. So I there's not like a centralized registry of the holders of the token anywhere. >> Correct. >> Fantastic. And then are those when you mention like the restricted um jurisdictions that means basically that the decentralized applications that are going to interface with these tokens. sort of like are required to like not support users who are in this like set of like who are part of the approved jurisdictions as

you would see with many like uh DeFi applications in the past that restricted the US for example. >> Correct. And we make the restricted jurisdictions pretty clear in our in our terms and documentation and all of that. Yeah. >> Great. Okay. So, and that is unique to Robin Hood chain. So are people for example now bridging this assets to other uh blockchains? >> Um there's nothing preventing someone from bridging the asset to another chain. We don't know that is happening today at a large enough scale for it to be relevant in the dashboards and whatot, >> right? But the sort of like the wall defense like space for them is the robot chain. That's where they're meant to

live primarily. They are minted and redeemed on Robin. >> Perfect. >> Yeah. So that's the primary market. It's on Robin Hood chain. >> Um so trying to make a funny or interesting comparison here in the in the sense that for example Tempo is built for payments. Is Robin Hood chain meant for like stocks and other RWAs? >> Absolutely. I mean our vision here is that we think the future of finance is on chain. Um, we think not just at the RWA level, but at the chain level, transactions are, uh, more transparent, um, easier to follow, easier to monitor, um, >> and much more efficient if they're all

on chain. And so when we think about tokens, um, that's exactly what we built the chain for, uh, sorry, RWA tokens, built the chain for. And um yeah, the chain is um uh the primary motivation for the chain is building this future where RWAS are really one of the primary ways that users interact with the underlying assets in the future. Yeah. >> Is there like do you see any like discounts versus the underlying assets with these tokens because essentially like in a way one level removed and the claims are not necessarily the same. the liquidity is concentrated on this issuer. like do you see any like price effect of the structure or do you see it

pretty much the same as you would see on like exchanges NASDAQ or whatever there? No, I mean when institutions mint the token um they mint it at the marketplace which is the whatever the traditional stock exchange will be offering and >> um obviously there are possibly >> different prices on chain but um the mint and redeem will always happen at the market price. >> Yeah. Um are end users minting directly today or is it like some market makers or institutions that are like the >> today it's just the market makers that's the core first group and then our road map will expand that in the future.

>> Okay. So it's basically the same way that circle will have its primary market where institutionals will go and mint and then there's the secondary that in this case will be also uh on dexes and on Robin Hood >> correct. Yeah, it's the current dynamics. Yeah. >> Fantastic. And today out of the TVL in the chain, I think it's only a small fraction of it that's on like RWS, right? >> TVL is a small portion of stock token. T asset TVL is a small percentage of the overall TVL of the chain. Still early days, 30 days into it. Um, I'd say some of the more interesting things are also stock token volume on the chain has been very um very promising and we're excited

for where it goes. >> Nice. Uh, okay. And stepping on like in the shoes of the the end user. I am in Brazil like whatever random country now you have access because you didn't have in the past which in most countries that have any relevant like trading volume they already have access to is US stocks or is it more okay here's a way where you can navigate the continuum between a memecoin and a stock which of the two feel more real to you I think it depends on the geography depending on the geography even if you have access to brokerages there might be a lot hurdles for you to even convert your local currency to a US dollar and then convert

that to um the stock and there might be a lot of fees in between. Whereas with stock tokens, you don't have that. As long as you hold some form of the stable coin, you're able to swap into a stock token without any uh uh quoteunquote like uh I mean I want to say the word middleman, but like ease of access is actually um not that great in most jurisdictions even though those jurisdictions will have access to um brokerages. So I think that's one. I think number two is yeah, if you already have assets on chain, um it obviously makes it a lot easier for you to diversify your holdings in your wallet um across more than just crypto exposed

assets. Um so, uh yeah, I think the answer does depend a little bit on the jurisdiction that you're in. The one the last piece here that is universal is 247. And that's something that we think is really um interesting and just if you've been in crypto, you've been trading 24/7 for the entire life you've been in crypto and that's just kind of uh what's expected for you and um to be able to bring that to exposure to something like public stocks is um something we're really excited by.

>> Yeah, that's pretty cool. And and I get your point. there's a lot of like friction if you have to settle back to like a fiat currency that you don't necessarily want to hold even if you have access to like a trapy fintech app to trade stocks. um how like 247 is always like everything feels like it's moving to 24/7 but you have the issue of like theme liquidity and as you said like people who have been in crypto for some time you probably are aware that a lot of like nasty things happen during the weekend and in the few days where like this has been live what are you seeing in terms of

liquidity during like offmarket market hours and since it's also happening in jurisdictions that are not in US trading hours, have you seen anything interesting? Do you have any concerns um on that? >> Um it's a it's a really good question. I personally can't say that I've seen um anything concerning. Um we have multiple ways for and if anything uh both developers and users have multiple ways to access stock token liquidity. um there's obviously the AMM pools but also prop AMM providers that um have a little bit more of a direct connection to the underlying liquidity and so um yeah we

offer multiple ways for um users developers wallets to get access to both um weekday and weekend liquidity. So with that diversification, I think we feel good about how things are developing um on the on the ecosystem. >> Do you see it more of a as a retail product or do you see because naturally it would be because of the challenges that you mentioned but is the thinking here to transition like to more sophisticated institutions, family offices, what not as part of the like the ambition?

>> Absolutely. And the token is designed in a way where it's fully permissionless. Um and uh right now it is starting off with the retail user base but we're seeing a lot of interest from institutions and uh of course an institution example use case here is you need to post collateral um quickly to get an overnight loan. >> The best way to do that is to uh a stock token. um if you're holding let's say escov and you want to post it as collateral if you were to wait for the traditional markets that takes multiple days whereas with the token you can do it instantly and so we think the institutional use cases are going to be extremely apparent um in the future and we're building for making sure that our

product is the best for all use cases yeah >> one question about the earn product can I use Robin Hood stocks as collera on those like vaults and earn yield on those on them as like >> today. Um the asset that you can lend through Robin and Earn is USG um a stable coin that we partner with with Paxus on >> um and we do have plans to expand that in the future. Can't say exactly which assets right now, but >> um yeah, for now it's USG, the stable coin.

>> Yeah. And um why did you so there in like the DeFi native or the crypto ecosystem has long favored perpetuals right um how would you characterize the trade-off between one route or the others because essentially if you're already removed from like holding the actual asset in some way like what are the trade-offs there and what do you prefer >> and trade-off between perpetuals and um >> and tokenist stocks Um I don't think there is a huge trade-off today. You know on Robinet chain we have multiple perpetual um decentralized exchanges live. One being lighter um >> available in the wallet and lighter just

announced the ability to post your um stock tokens actually as collateral for your perpetual position. So um I think these assets are um these assets and instruments and contracts um all serve different purposes and they are all uh can be part of the same um same strategy for different individuals um and firms. So yeah, I'd say not mutually exclusive at all and we love to see developers doing both and seeing use cases where both are combined too. Yeah, >> perfect. Yeah, that makes sense.

And we've talked a bit about the Robin Hood wallet and some people listening might be more familiar with the Robin Hood app here in the US. >> Um, can you like simply like describe how are they different, where I can access each of them and what can I find on each? >> Absolutely. So, Robined wallet is a fully self-custodial crypto wallet. Um you can find it under the name Robinet Wallet in the app store. It's a if you search for Robin it's gonna be the listing that's right below um Robinet app. Um so with Robin wallet it is one fully so custodial meaning that um it's not like you're cussing and with Robin

it's yours. You can take the key and take it somewhere else if you want to >> and you can access um multiple chains on the Robinet wallet including Ethereum, Salana base, but obviously uh Robinet chain and um with the Robinet wallet you can do things like explore different decentralized applications. Obviously through Robinet earn on the Robinet app you can access morpho the decentralized lending protocol but with Robinet wallet you can access however many you want to >> um and you can explore um all the tokens that are available to you um on the different chains that we that we support but again it is a fully self-custodial crypto wallet um and it it is um what we

think is one of the simplest ways to explore a fully native blockchain experience experience um without having to go through a crazy you know desktop web um wallet setup procedure. >> So the thinking there is mostly UX UI rather than than feature set right. >> Um I'd say uh safety is a really big part of how we think about the wallet. So, we've integrated with a partner um blockade to scan tokens that are on the wallet uh make sure that users are getting warnings um and understand when a token might be flagged for something that's not good. And so, it's both the accessibility um but also the safety for

users to explore um DeFi. Are there any like improvements that are specific to Robin Hood chain in terms of like how wallets work or anything like the signature process or is it well I guess you're constrained by being an L2 like an Ethereum L in that sense right? Yeah, I mean like I said, I think our big focuses for the chain have been on the throughput and the block times. There are decisions that we've made that um make it simple for developers that are used to developing on EVM chains to uh deploy on Robinet chain as well. So, we're trying to strike a balance between making sure the

chain is the most performant, but also uh making sure that developers are able to easily access the chain. They're not learning a new language. They're not >> learning everything from scratch. >> No, no, that makes total sense. Okay. So, as an end user, I download the wallet and I'll be able to like interact with the different uh decentralized applications out there. Um everything's great. Um, if I if I am in the US, would that be a restricted jurisdiction for uh Robin Hood stocks? I presume it would. Yeah. So yeah, if you're in the US, um so on the wallet, uh let's say you're not in a restricted jurisdiction, you're able to browse, um all the tokens that are available, um including stock

tokens, but also um the lighter perpetuals integration which is on the wallet um >> which we announced um on July 1st as well. Um but if you're in a restricted jurisdiction then um right you wouldn't have access to some of those products. Um although non-stock tokens non-perpetuals you would be able to still access. >> I see. >> Um why is that the case? Um as much as you can like comfortably comment but are things like clarity or like leveling the playing field between like tokenized representation of a stock here in the US. Is is that something that for example would unlock um like the US as a unrestricted jurisdiction?

>> Um we're definitely excited for the structure that the Clarity Act will bring. Um and we're excited to see what it does for tokenization. Um yeah. >> Okay. Um and along the that same line of the things that are still a bit challenging to achieve onchain, uh we have this world of access to uh private equity or like things like um SpaceX or Open AI stock before it goes public. Um, so if I recall correct, it was last year that Robin Hood first provided access to that type of assets and didn't necessarily go as

smoothly as one would have thought or might have wanted. Um can you talk and if I understand correctly now the path uh for things like the Robin Hood ventures I think it's called fund has been through more traditional vehicles as opposed to tokenized. Um so what are the gaps and what are the plans in that sense for tokenization? >> Yeah it's a great question. So yes um last year we did give away um tokens and open AAI and SpaceX and that was through uh our previous stock tokens product

which was called now called classic stock tokens which is a different structure than um the stock tokens that we announced and uh what's great is that the users that receive those SpaceX um private stock tokens um now have the underlying shares. So it worked. So, so yeah. So, um but um you know our our goal here is we want to build access to um both I would say uh all like I don't want to say all securities but as many asset types as possible and break down the barriers of access to this. So um you can't I can't speak too much about our plans in the space but um yeah we're

excited to explore how we can uh leverage um tokenization to make access available to many types of assets not just US public stocks. Yeah. Is there something specific that prevented that or because if I recall correctly there were those were issued like in Estonia or something like that. But so is it something that you currently cannot do anymore or is it something that you rather not do right now and you sort of like waiting and see?

So differently, is there something specific that needs to happen for that that's exogenous to you that needs to happen for you to move forward with the type of product or is something more um related to your own like regulatory exposure levels level of >> Yeah. Well, we launched um our US public stock tokens product 30 days ago. Um and >> personally, I want to build the best product possible. we still have a long way to go there and I'd say our focus right now is building the best um US public stock token product um that's available in terms of how many tokens that are available, the liquidity,

safety and all that stuff. So um I'd say like there's nothing um my answer to that is our focus is making sure that the product that we've launched is the best product possible and it's only been 30 days and we're focused on making sure is a a perfect product. That makes sense. It's it feels like a very like fresh approach versus the path that many institutions are taking in terms of replicating the closed structures and intermediaries um as opposed to embra truly embracing crypto in terms of like permissionless and composability. So that feels refreshing and understand where you're coming from there. So it's been a remarkable first month for the team. Do

you have a sense of how many people have interacted with with the Robin Hood chain so far? >> We have the number of addresses that people um that are uh have been active on Robin Hood chain and to date it's been about 3 million. So it's been a it's been a great um great you know month since the launch and hope to see that grow uh even more. >> Wow, that's phenomenal. Great. It's been a fantastic conversation. What do you think we'll be talking about next time we meet like in a year from today? What do you think it's the direction?

>> Um, I think we'll be talking a lot about how RWAs have taken over every part of DeFi and how it's not just uh Yeah. And I think that's going to be a big part of our conversation uh if we were to talk a year from now. Yeah. >> Nice. Fantastic. Well, really great having you. Thank you so much. It's been great having you on the show. >> Yeah. Thank you for having me.