Robinhood's Crypto Pivot with Vlad Tenev, Co-Founder, CEO

Robinhood's Co-Founder & CEO, Vlad Tenev announced some major news at Permissionless earlier this week. Robinhood is diving deep into crypto and web3! How so? When's the big roll-out? Hear all about it and so much more in the interview. P. S. It's Ryan and David's FIRST in-person interview! You don't want to miss it, anon. Trust. ------ 📣 ALCHEMIX | Get a self-repaying loan today! https://bankless.cc/Alchemix ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: ⚖️ ARBITRUM | SCALED ETHEREUM https://bankless.cc/Arbitrum ❎ ACROSS | BRIDGE TO LAYER 2 https://bankless.cc/Across 🏦 ALTO IRA | TAX-FREE CRYPTO https://bankless.cc/AltoIRA 👻 AAVE V3 | LEND & BORROW CRYPTO https://bankless.cc/aave ⚡️ LIDO | LIQUID ETH STAKING https://bankless.cc/lido 🔐 LEDGER | NANO S PLUS WALLET https://bankless.cc/Ledger ------ Timestamps: 0:00 Intro 4:53 Wen Vlad & Robinhood Got Cryptopilled 7:55 Why Self-Custody 9:09 Robinhood 3 12:15 Chromatic Feedback & Other Features 14:03 Why the Crypto Pivot? 20:37 Utility of Robinhood’s Non-Custodian Wallet 26:04 Cannobolization Threat? 27:32 Robinhood’s Seriousness, Culture, & Demand 30:44 Robinhood Crypto Users 32:28 Robinhood 3’s Case for Normies 34:56 What’s Next ------ Resources: Vlad Tenev https://twitter.com/vladtenev Robinhood 3 https://robinhood.com/web3-wallet ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:05Ryan Sean Adams?

  Welcome to Bankless, where we explore the future of internet money and internet finance. This is how to get started, how to get better, how to front-run the opportunity. This is Ryan Sean Adams. I'm here with David Hoffman in freaking person!

• 0:18David Hoffman?

  Yo!

• 0:19Ryan Sean Adams?

  And we're here to help you become more bankless. Did that from memory, David?

• 0:24David Hoffman?

  Nice job, man. Nice job.

• 0:26Ryan Sean Adams?

  Who do we have on today? What are we talking about?

• 0:27David Hoffman?

  Yeah, we had Vlad Tenev, the CEO of Robinhood. And we, of course, are doing this app permissionless because right before Vlad came into our makeshift podcast booth, they did a press release for a non-custodial wallet coming out of Robinhood. So they are calling this Robinhood 3, which I thought was Robinhood Web 3, but it's actually Robinhood, the third evolution, which Vlad goes into in the podcast as well. So we try and pick his brains about what some of the features are in this Robinhood 3 app. He leaks a little bit. You can kind of see a little bit of what's going on there, but he mainly keeps things mostly under wraps, except for the stuff he leaks.

• 1:04Ryan Sean Adams?

  Yeah, at a high level, I think it's super exciting that they are going into the self-custodial wallet space. I've got to say, I didn't expect them to do it so soon.

• 1:12David Hoffman?

  Yeah.

• 1:13Ryan Sean Adams?

  Right? I anticipated some of the fintechs who've created entire business models on being centralized to prefer that model. And now here, Robinhood is going to the self-custody space, effectively encouraging all of their users to get crypto-pilled and to go bankless.

• 1:29David Hoffman?

  Right.

• 1:29Ryan Sean Adams?

  So that's a step in and of itself. I think there are a lot of details that we'd love to learn, like what Layer 2s are going to be supported, what other chains, how are you actually going to support all of the assets that they mentioned supporting? Bitcoin, Litecoin, Ethereum, ERC20 tokens.

• 1:47David Hoffman?

  Where do the swaps happen and how do the swaps?

• 1:49Ryan Sean Adams?

  Exactly. Our contract wallet, how our keys are stored, all of these things. And hopefully, these questions will be revealed in time. But we kept this conversation surface level and high level. And I think the big takeaway is Robinhood has planted a flag in the ground. They are coming to crypto, they are investing in it, and they're actually doing some bankless things. So that in itself is pretty exciting, David.

• 2:13David Hoffman?

  Yeah, and I think this is basically the business model for all banks, right? Like, which one of you is going to disrupt yourself first?

• 2:19Ryan Sean Adams?

  Yeah.

• 2:20David Hoffman?

  And Robin Hood says, like, all right, well, we'll do it. And like, we'll get out of the way. And so that's kind of the TLDR, I would say, is Robin Hood is going to disrupt themselves first. And so that they can actually produce their own product that ultimately comes to disrupt themselves.

• 2:32Ryan Sean Adams?

  Dude, I enjoyed doing the in-person podcast you did.

• 2:34David Hoffman?

  That was great.

• 2:35Ryan Sean Adams?

  It was really good. David and I on camera at the same time, in person, interviewing Vlad. That's what you're in for in this episode. We're going to get right to the episode with Vlad. But before we do, we want to thank the sponsors that made this episode possible.

• 2:47David Hoffman?

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• 3:32David Hoffman?

  That's A-L-T-O-I-R-A dot com slash banklist and start investing in crypto today. The era of proof of stake is upon us, and Lido is bringing proof of stake to everyone. Lido is a decentralized staking protocol that allows users to stake their proof-of-stake assets using Lido's distributed network of nodes. Don't choose between staking your assets or using them as collateral in DeFi. With Lido, you can have both. Using Lido, you can stake any amount of your ETH to the Lido validating network and receive STE in return. STE can be traded, used as collateral for lending and borrowing, or leveraged on your favorite DeFi protocols. All this without giving up your ETH to centralized staking services or exchanges. Lido now supports Terra, Solana, Kusama, and Polygon staking.

• 4:13David Hoffman?

  Whatever your preferred proof-of-stake asset is, Lido is here to take away the complexities of staking while enabling you to get liquidity on your If you want to stake your ETH, Terra, Sol or Matic and get liquidity on your stake, go to lido.fi to get started. That's L-I-D-O dot F-I to get started. Aave is the leading decentralized liquidity protocol and now Aave V3 is here. Aave V3 has powerful new features to enable you to get the most out of DeFi, including isolation mode, which allows for many more markets to be launched with more exotic collateral types. And also efficiency mode, which allows for a higher loan to value ratios. And of course portals, allowing users to port their Aave position across all of the networks that Aave operates on, like Polygon, Phantom, Avalanche, Arbitrum, Optimism and Harmony.

• 4:58David Hoffman?

  The beautiful thing about Aave is that it's completely open source, decentralized and governed by its community, enabling a truly bankless future for us all. To get your first crypto collateralized loan, get started at Aave.com. That's A-A-V-E dot com. And also check out the Aave Protocol Governance forums to see what more than 100,000 DAO members are all robbing about at governance.aave.com.

• 5:20Ryan Sean Adams?

  Bankless Nation, we are super excited to introduce you to Vlad Tenev. He's the CEO and co-founder of Robinhood. Excited to have this conversation. Also excited, David, this is our first in-person podcast that we've ever done. So we found some space at Permissionless and we're recording this live with Vlad after the keynote that you just gave. Vlad, welcome to Bankless.

• 5:40Speaker 03

  Thanks for having me, guys. And I'm glad we're all meeting for the first time. So it feels like a level playing field.

• 5:47Ryan Sean Adams?

  You know, I almost feel like saying like, "Welcome to crypto" as well, but I know Robinhood has been in crypto for a while. I guess my first question is, when did you guys decide to get super serious about crypto? Because the things that you're releasing today are taking you to the next level. We'll talk about what you've just announced, what you're planning, what you're planning in the future. But when did you fall down the rabbit hole? When did Robinhood get serious about crypto?

• 6:11Speaker 03

  Well, let's see. I've been into crypto for quite a while, just personally as an individual.

• 6:21Speaker 03

  You know, I remember trying my hand at Bitcoin mining back in 2011 with a CPU and, you know, seeing the first time that Bitcoin, it wasn't even crypto at that point, right? It was just Bitcoin, was declared dead after the Mt. Gox password breach. So a lot of people were like, oh, well, that was a fun experiment while it lasted, right? No way could it recover from this. But then, of course, you had the first kind of Bitcoin summer in 2013, prolonged winter. People declared it dead again, and then 2017, 2018.

• 7:02Speaker 03

  So I think the Robinhood as a company got into crypto in 2018, so early 2018. When it became clear, we started hearing from our customers that, hey, this is an asset class that we want to have as part of our portfolios. We want to invest in it, we want to trade it. We were looking at kind of the broader space and seeing an opportunity to do the same thing that we've done for stock trading, which is fee compression and obliteration and get more value back in customers' pockets. So that's what led us to launch Robinhood Crypto back in early 2018, which was, I

• 7:43Speaker 03

  think, the first major commission-free offering for crypto by kind of an established company. So that got us into it. And then, I guess you might ask, why self-custody? Why is that interesting to us? Because that is deeper.

• 8:00Ryan Sean Adams?

  Because that's what you're announcing, right?

• 8:01Speaker 03

  Yeah, we're announcing Robinhood 3, which is self-custody done the Robinhood way. So no network fees, no commissions, really bringing design to the forefront. And I think what's interesting about it is, you look over the past couple of years, you know, five years ago, self-custody meant getting your treasure or your ledger, putting your coins on it and forgetting about it, right? Maybe you'd take it out once a year or even less frequently to move coins around, move them to an exchange, but... The number of rich applications that you can do while maintaining custody and

• 8:41Speaker 03

  ownership of your keys over the past couple of years that have just sprung up has been really awesome to see. So Robinhood, obviously, we've been watching the space, and I think they're now at the point where they're ready for a broader audience. And we felt like we could build a really, really good product here, taking our two value propositions of low costs and amazing design and deliver that to customers.

• 9:10David Hoffman?

  And I'm really, really excited for this. And since you've been paying attention to the crypto industry, it seems like Robinhood has been waiting for its moment to pounce. And it seems like this is the moment. So we have a Robinhood wallet, Robinhood 3, named after Web3. Is that the 3 in Robinhood 3?

• 9:24Speaker 03

  Yeah, I think Web3 is an obvious allegory. I think there's also a reflection of kind of the different stages of Robinhood. The first stage could be when we offered equities trading. And then the second stage, when we got into crypto back in 2018. But, you know, it was a custodial offering. We didn't even offer the ability to deposit and withdraw until last year. So customers were really happy to go there. And then self custody, the Robinhood way with Robinhood 3.

• 9:54David Hoffman?

  So I want to get into the technical details. So how does that work? What does that, while it look like, how does the user begin to custody their own assets? How do they get their private keys out of Robinhood? And if they are buying assets from Robinhood in the app, how does that go to the user's wallet while they also maintain their own private key? Like, can you just walk us through this, the whole scope of the wallet?

• 10:17Speaker 03

  Yeah, so, I mean, I can't share too many of the details just yet because I want to keep it a surprise. I want to keep you guys in suspense. But I'll tell you some of the principles that we kind of...

• 10:32Speaker 03

  Brought to the fore when we designed the product. I think that the first thing is we want to make it simple to onboard while keeping best-in-class security. So, security, privacy, very important. That's why people are self-custoding to begin with. But you look at some of the, some of the ways to set up a non-custodial wallet. You have to, you know, type in and transcribe the 24 words and it tells you to write them down on a piece of paper. We think that we can make that process a lot simpler and a lot more streamlined.

• 11:05David Hoffman?

  Because that scares almost everyone who does not get into crypto.

• 11:08Speaker 03

  Yeah, if you're, if you're, you know, a protocol developer, it's, it's fine. You understand what's happening. You understand private-public key cryptography. And it, it is a little bit of a step forward. It's like one step beyond just giving you the private key, right? And, and having you record that. But I think we could do better. The second thing is just the design and the simplicity. A lot of these products are built using non-native protocols. So they just, they feel slow, right? It's like you're, you're either directly loading a webpage or loading an interface that's powered by a web framework. So we want to make sure it feels really fast. And you feel connected to your money and it's tactile. And so we're building native.

• 11:53Speaker 03

  We also are introducing a new gesture. You might have heard my, my co-founder talk about it onstage, which we call chromatic feedback, which is going to be really, really cool. And it's, it's, uh, it's gonna, yeah, it's, it's gonna feel very tactile. You saw a little hint of it, but I think when you play with the product, it'll, it'll feel really good.

• 12:15David Hoffman?

  For the listeners that, that weren't able to watch you, the, the speaker, the talk at Permissionless, can you actually go into that, what that, what that is? Yeah, what is chromatic feedback? What is that?

• 12:24Speaker 03

  Well, um, basically it's, uh, it's a response to the touch that the interface gives. And it's hard for me to describe it on audio, but you just have to see it to believe it. And I think people really, really like it.

• 12:39David Hoffman?

  So we're talking about like the iOS, Android app has like a unique tactile feedback while using it? That's, that's unique?

• 12:45Speaker 03

  Exactly.

• 12:46David Hoffman?

  Cool, neat.

• 12:47Speaker 03

  And, and then the other thing is, We really don't love the whole web browser thing where you load up a web browser in your non-custodial wallet and you get some webpage that you have to, you know, zoom in and out of. So we want to make it really easy, not just to swap, but also to access DeFi protocols and generate yield, all with native UI. So we're gonna, we're gonna be building that. And we're gonna use multiple high-speed chains. We want to make sure people have, people have different ways of getting access to different tokens and different services. So that's something we're quite excited about as well.

• 13:27Ryan Sean Adams?

  Okay, multiple high-speed chains. That brings to mind like the fast layer ones and also layer twos as well. Layer twos on Ethereum and other chains?

• 13:34Speaker 03

  We're looking at everything, yeah.

• 13:36Ryan Sean Adams?

  Cool. Okay. Haven't, haven't domiciled yourself into any one specific chain yet?

• 13:40Speaker 03

  Well, I mean, there's, there's lots of chains that we like. But yeah, we're, we're always open to adding more. And I think part of the reason we're excited to be here is, you know, there's a lot of DAP developers and, and other folks that we could talk to. And, you know, we're very happy to have some of them start reaching out already, even in the hour or so since the keynote.

• 14:03Ryan Sean Adams?

  Sure. What's super cool about this too is I think you, you mentioned it earlier, but users want to do more than hold crypto. Obviously, there are all of these other verbs that you can do with crypto, particularly with DeFi. So you want to invest, you want to buy, you want to hold, of course, you also want to trade, you also want to earn yield, all of these different, you know, verbs. And I, I noticed in your press release, you were talking very much not just about the hold use case in your crypto wallet, but like generating yields. I'm wondering if you'd talk about that. But, but also before you do, Vlad, I want to get like the big picture here for Robinhood, because you've said this is sort of the, the third phase of Robinhood, which I think, that's pretty big, right? I mean,

• 14:47Ryan Sean Adams?

  like you guys get into the equity space, that was big. Getting into crypto, it's the second phase, that was, that was big. And I will tell you, like, this, this podcast is called Bankless, right?

• 14:56Speaker 03

  Yeah.

• 14:56Ryan Sean Adams?

  Because we are about like

• 14:58Speaker 03

  The name's great.

• 14:59Ryan Sean Adams?

  disrupting the intermediary. Okay. So what we don't want in crypto Is to have crypto turn into something like the traditional banking system where it's less peer-to-peer. We have to go through all of these intermediaries. So while we were very happy in kind of your phase two, that you guys were like listing crypto assets, we also like kept applying the pressure and wanting, wanting Robinhood, wanting users of Robinhood to petition Robinhood and say, hey, get us the withdrawal capability so we can withdraw from the banking system if we want to and take custody of our assets.

• 15:32Speaker 03

  Yeah.

• 15:32Ryan Sean Adams?

  And to your credit, you guys did that earlier, I guess, last year, you started doing that, which was phenomenal. But this one took me by surprise in like a good way, like a way that I'm very excited about because it strikes me that you are seeing the full vision of crypto, which is more than just creating a fintech overlay on top of this ledger blockchain infrastructure, but also providing like peer-to-peer or, you know, individual-to-protocol types of interfaces. Like doing this self custody thing, I think is a big step. And you guys should be commended for that. But I'm wondering, why? What's the thought process here? Do you see this is where the industry is going? Do you see this is

• 16:17Ryan Sean Adams?

  maximally beneficial to your, your users? Is there some kind of profit motive? What? Why are you doing this?

• 16:23Speaker 03

  Yeah, I guess there's two questions, right? There's the why, and then there's kind of why now. So in terms of the why, if you look at why Robinhood has been able to do what we do, it's, it's because there's, there's sort of two things that we've been able to, to accomplish because we hold them very, very dear. One is using technology to actually eliminate middlemen and costs from, from the system, pass back that value to customers in the form of lower fees and no commissions. And the other is create design that's accessible and makes it very, very easy for a customer. And not just kind

• 17:07Speaker 03

  of a DeFi believer, but a customer that maybe is curious, but hasn't, hasn't gone down the rabbit hole.

• 17:15Ryan Sean Adams?

  An army, right?

• 17:16Speaker 03

  Yeah.

• 17:16Ryan Sean Adams?

  Not, not a crypto native.

• 17:17Speaker 03

  Yeah, not a crypto native. So, so we want to make sure that our interfaces are.

• 17:25Speaker 03

  Are obviously useful and people who are believers love them, but but also normies do as well. So what did what did stock trading? How do you? How do you look at that in the context of stock trading? Right? Well, 20 years ago, it used to be that to place a stock trade, you had to go to a physical broker and, you know, your trade would be beamed down to the floor of the New York Stock Exchange. And you had these people with like these iPads before there were iPads actually, actually making the trades happen. That's why there was a cost to it because there was an actual human being in the in the middle of the transaction. And, you know, between 20 and 10 years ago, that all went away.

• 18:09Speaker 03

  So if you go to the New York Stock Exchange now, it's like a media place, right? Maybe there's some people trading, but most of the time it's just CNBC and some of the networks doing interviews because it's it's a museum. All of the action is happening in servers on the other on the other side of the Hudson River. So that part, that's an example of something very, very manual that was replaced by software. And people, people benefited from it, right? In the form of lower costs. Now, I think what's what's got us particularly interested about crypto and DeFi is that you're seeing that go down the stack.

• 18:50Speaker 03

  So I think you've you've heard us say a few times that crypto is not just another asset class, but it's really almost like an entirely new operating system for for financial services. So, you know, we've done some stuff with stock trading that replaces a lot of the things in the front of the house with software. Now crypto, you're starting to see the back of the house, the sort of underbelly of the financial system being replaced by blockchains and protocols. And I think what what's really interesting, you put these two things together, the end to end chain, the entire product experience could potentially be replaced by software. And

• 19:35Speaker 03

  That's an immense opportunity to pass back not just security and privacy, but more value back into the the hands of consumers. So I think that's why we're interested in it. It it goes to the heart of the genesis of Robinhood, which is using technology to make financial services low cost and applying design to make them ridiculously easy to use and simple for customers.

• 19:57Ryan Sean Adams?

  You know, we actually have a term for what you just described. We were talking about the front of the house and the back of the house. We call it the DeFi mullet thesis, right?

• 20:03Speaker 03

  Uh huh.

• 20:03Ryan Sean Adams?

  And the idea is it's going to be like fintech on the front for user acquisition, smoothing the rough edges, making self custodial wallets, not custodial wallets amazing. And it's going to be DeFi in the back. And so our thesis has been, and we saw this starting to happen a couple of years ago, that more and more fintech companies would essentially grow out their DeFi mullets, right? Begin to start swapping out the old banking infrastructure for like crypto ledger based systems. And it's so cool to see Robinhood taking a giant leap into that space. So, well done. I guess the other follow up question is, so what sort of things will users be able to do with that non custodial wallet beside, besides the whole?

• 20:47Ryan Sean Adams?

  So we were just alluding to it like yield, like DeFi? What what other things can we do inside this?

• 20:53Speaker 03

  Well, so there's a couple of things that we know customers love and want from from talking to them. So swapping and trading is a big part of it. To be able to actually place trades without giving up control over over your keys. So that that's what we start with. Obviously, Robinhood is known as a place where people can invest and trade. And we want to, we want to bring that to self custody with Robinhood 3.

• 21:20David Hoffman?

  And just to be clear, that means integrations with the chains that the app, that the wallet talks to and using the DeFi swap features and swap applications on those chains? Or is that something that that Robinhood itself will be also facilitating as well? How does this swap actually happen?

• 21:37Speaker 03

  I think the details under the hood, again, I think will probably reveal more as we get closer to the product delivery. But from a customer's standpoint, it's just you, software, and the blockchain. And the goal will be to actually make it so that your all-in cost of swapping is competitive, if not significantly better than the most competitive centralized exchanges. So typically, when you're trading on these DEXs, you see high gas fees, sometimes low liquidity. It's unclear exactly what the exchange rate that you're swapping is. So we see lots of problems that we can help solve there.

• 22:21David Hoffman?

  Aave is the leading decentralized liquidity protocol. And now Aave V3 is here. Aave V3 has powerful new features to enable you to get the most out of DeFi, including isolation mode, which allows for many more markets to be launched with more exotic collateral types. And also efficiency mode, which allows for higher loan-to-value ratios. And of course, portals, allowing users to port their Aave position across all of the networks that Aave operates on, like Polygon, Phantom, Avalanche, Arbitrum, Optimism, and Harmony. The beautiful thing about Aave is that it's completely open source, decentralized, and governed by its community, enabling a truly bankless future for us all. To get your first crypto collateralized loan, get started at Aave.com. That's A-A-V-E dot com.

• 23:02David Hoffman?

  And also check out the Aave Protocol Governance Forum to see what more than 100,000 DAO members are all robbing about at governance.aave.com. Living a bankless life requires taking control over your own private keys. And that's why so many in the bankless nation already have their Ledger hardware wallet. And brand new to the Ledger lineup of hardware wallets is the Ledger Nano S+, a huge upgrade to the world's most popular hardware wallet. With more memory and a larger screen, the Nano S+ makes it easy to navigate and verify your transactions. And the paired Ledger Live desktop app gives you increased transparency as to what is about to happen with your NFT. What you see is what you sign. The Nano S+ gives you the smoothest possible user experience while you're doing all of your crypto things. So go to the Ledger website to check out the features of the new Ledger

• 23:45David Hoffman?

  Nano S plus and join the waitlist to get yours. And don't forget about the Crypto Life card, also powered by Ledger. The CL card is a crypto debit card that hooks right into the Ledger Live app, right next to all the DeFi apps and services that you're already used to doing, like swapping tokens and staking. So if you don't have a Ledger hardware wallet, go to ledger.com, grab a ledger and take control over your crypto. Arbitrum is an Ethereum Layer 2 scaling solution that's going to completely change how we use DeFi and NFTs. Over 300 projects have already deployed to Arbitrum and the DeFi and NFT ecosystems are growing rapidly. Some of the coolest and newest NFT collections have chosen Arbitrum as their home, all the while DeFi protocols continue to see increased usage and liquidity. Using Arbitrum has never been easier, especially with the ability to deposit directly into Arbitrum

• 24:29David Hoffman?

  through all the exchanges, including Binance, FTX, Quobi and Crypto.com. Once inside, you'll notice Arbitrum increases Ethereum speed by orders of magnitude for a fraction of the cost of the average gas fee. If you're a developer who wants low gas fees and instant transactions for your users, visit arbitrum.io/developer to start building your DAP on Arbitrum. If you're a Dgen, many of your favorite DAPs on Ethereum are already on Arbitrum, with many moving over every day. Go to bridge.arbitrum.io now to start bridging over your ETH and other tokens in order to experience DeFi NFTs in the way it was always meant to be. Fast, cheap, secure and friction free.

• 25:04David Hoffman?

  One of the other questions I have is how user and customer funds will actually end up in the wallet. So how does it interface with the current Robinhood app? And if users want to get their Bitcoin, their Ether, their tokens into their non-custodial wallet, is there like a fiat on-ramp that is built by Robinhood right in there?

• 25:22Speaker 03

  Well, I think the really interesting thing about Robinhood Crypto inside the main Robinhood app is that it is a great on-ramp for crypto, right? You can bring in your fiat currency, your dollars. You can buy and sell crypto. And we offer an increasing number of coins. We just added some nuance a couple of weeks ago, actually. And with the custodial wallets that we launched a few months ago, you can actually deposit and withdraw and take them directly onto the chain. So certainly that gives us the ability to drive an integration from Robinhood and use that as a key on-ramp.

• 26:04Ryan Sean Adams?

  Okay. Vlad, are you worried at all about this offering cannibalizing your existing business? And so, I mean, there are multiple ways to see it. I mean, obviously, you're not, or you're weighing the risk and you're saying, hey, the rewards are worth more than the risk. And I'm wondering if you could weigh in on this, but it sort of reminds me of the, you know, the Apple play in the, in the 2000 era, where you had the iPod, an uber-successful product, right? Like incredible. And then Steve Jobs goes and turns that iPod into an app on a phone, makes music basically an app. And the question is like, well, is that going to cannibalize all of the iPod sales? And he was like, yeah, but we'll more than make up for it on our sales of iPhones and in the App Store.

• 26:49Ryan Sean Adams?

  Is that what you're seeing here? Or do you think that there could be, you know, some threat to your existing business model? Because you're getting into DeFi and margins get compressed? Is there any threat of cannibalization? What do you think about this?

• 27:03Speaker 03

  I think it's always best to cannibalize yourself, right? And we don't really even think about it that way. We think about rolling out the best products and, you know, the monetization and the revenue will, will take care of itself. If this is so, if this becomes, you know, the dominant way that customers access Web3 and it's drawing people away from Robinhood, I think, I think that's a great scenario, not just for the ecosystem, but also for Robinhood as well.

• 27:32David Hoffman?

  Can we take a peek behind what's going on with Robinhood's like own resources? Like, are you guys getting into this like 5% of your guys' time and energy, 25% of your time and energy? Like, how serious is Robinhood about this whole DeFi crypto campaign?

• 27:46Speaker 03

  Yeah, we've been, we've been growing our crypto team in general quite heavily. Started out as a very small, very small lean team. And, you know, we've, we've been putting a lot of resources to bear on this. But I would say, you know, We don't really look at it in terms of headcount. I think especially when you're starting, when you're starting something new, a smaller team can move really, really fast and iterate in a way that sometimes even larger teams that are resourced can't. So we're excited that it's a it's a new app. It allows us to kind of reimagine and learn from learn

• 28:28Speaker 03

  from things we've done with the first Robinhood. And we think it'll actually, there's probably things that we'll learn with Robinhood 3 that eventually we'll be talking about backporting.

• 28:39David Hoffman?

  So there's always like a big difference between how crypto natives see the products that they use and then design their products that they use versus people that aren't as familiar with with crypto. So like, what's the the Robinhood culture when it comes to like crypto native builders on the Robinhood side of things? Do you have a lot of crypto natives at Robinhood?

• 28:56Speaker 03

  We do. We have lots of crypto natives. But when we we have a big culture of talking to customers and putting the prototypes of what we build in front of them and getting their feedback. And we make it a point to not just talk to crypto native people, but actually to people that are curious and, you know, normies, as you put it. And we want to make sure it it works for them also.

• 29:20David Hoffman?

  And I'm sure along the process, as this app gets rich and the ecosystem around this app gets built out, you take Robinhood normies to Robinhood crypto natives. Can you is there any sort of insight or illustration as to the demand for this product out of Robinhood users? Is there anything like any customer feedback they say it's like, oh, they really want this this kind of product?

• 29:41Speaker 03

  Well, you see it certainly in some of the commentary about Robinhood. Like, people were requesting wallets in general and access to their coins. And we heard that loud and clear throughout the past year. And now, I think I think this release will probably surprise a lot of people. If it surprised you guys. I'm sure that not a lot of people thought that Robinhood would go and embrace self custody the way we have today, but I think it makes a lot of sense. It's the the future of, I think, the future of Web 3 relies on this.

• 30:22Speaker 03

  And we can really build something awesome that allows people to keep custody and be their own bank, you know, to the to the tune of why you named your podcast. I think that's a very, very powerful vision. And especially with what's happening around the world, you see,

• 30:39Speaker 03

  you see, it's never been as important to to have that security and privacy as it is right now.

• 30:45Ryan Sean Adams?

  What are Robinhood users like? So first of all, how many users are on the platform now? It's like 25 million ish, something like this?

• 30:51Speaker 03

  I think the last, the last number we reported was around 22.8 million funded accounts.

• 30:57Ryan Sean Adams?

  Okay, wow, okay. And how many of these are dabbling with crypto, own crypto assets, have their own private keys, maybe have a separate self custody wallet? Have you guys done any studies on this? What we're trying to understand is how many of the user base will be kind of net new? This is their first crypto experience and what the interest level is?

• 31:17Speaker 03

  Quite a few crypto, first time crypto buyers use Robinhood. We have a combination of both. We have people that use, that are very deep into it and use Robinhood as a cheap and convenient off ramp and on ramp, and then they they move it elsewhere to generate yield or to to engage in, to use DAPs. And we also have people that just want exposure to it and like having it alongside their stocks and are sort of thinking about it as portfolio diversification into a different asset. And I think what we'd like to do is is better serve both kinds of customers.

• 31:58Speaker 03

  So if you just want to use us as an on ramp and off ramp, we'd like to. We'd like to to serve you further down the line and and give you all of the other tools that you're going outside of Robinhood to use as well. If you want to use us as a way to just diversify your portfolio, that that's something that we offer. And obviously, with our centralized offering, we can make it a great experience to keep your coins in the same app as as your equities and other securities as well.

• 32:29Ryan Sean Adams?

  So Vlad, as we we think about wrapping this up in closing, I know we've all got places to be. It's very busy at Permissionless, of course. I'm wondering if you could give the case to sort of two groups of people, right? So of course, there's the crypto natives who listen to Bankless all of the time, and they're probably excited about this, but also at the same time, you know, maybe skeptical, right? Because Robinhood is coming from more the fintech side of things. And then there's also your existing users, right, who are a little worried about crypto potentially, like opening a MetaMask wallet. There's a lot of rough edges, the 24 words you have to like. First, can you make the case to your users, the Robinhood, you know, normies, let's call them, the people who are into

• 33:12Ryan Sean Adams?

  into fintech, buying equities, buying crypto on an exchange? Why should they go in the direction of a self custody wallet? Why is this Robinhood 3 application for them?

• 33:25Speaker 03

  Yeah, I think that if you are, and it's not necessarily gonna fill the needs for 100% of our customers, right? There's customers that are probably very happy just buying Bitcoin or the main coins and keeping them alongside their their securities. And we think that's fine. We don't if if you don't want to self custody, we're not, we're not necessarily going to want to force you to do that. But there are a lot of people that are attracted by getting access to more coins. They're attracted by by these DAPs and generating yield, especially in this high inflation environment. And we want to offer a solution

• 34:08Speaker 03

  to them. And I think the the value prop, if you're a customer of Robinhood, is you get the same Simple design and the low fees that you're accustomed to with TradFi products like Robinhood and we'll import that and make the experience absolutely seamless. Now, if you're a non-Robinhood user, the same value prop resonates with you, right? You're used to the swapping experience where the exchange rate's not clear. You're paying high gas fees. It's hard to work with multiple chains. Sometimes you send crypto to the wrong places and lose access to it, and that really sucks. So Robinhood can actually take a lot of the problems that you run into with the non-custodial

• 34:53Speaker 03

  wallets that you're already using and make them go away.

• 34:57Ryan Sean Adams?

  So what's next, Vlad? This product, as I understand it, is in sort of a beta-type season?

• 35:02Speaker 03

  We'll be starting the beta and rolling it out to the first customers in the coming months, so later this summer. And then the goal is to get it in everyone's hands later this year.

• 35:11Ryan Sean Adams?

  And more announcements to come, it sounds like. So it seems like you were teasing some things in this episode that are to come. So I'm sure many more features to be added. Like, when does the project go GA and become complete? Are there a certain amount of features you want to add?

• 35:29Speaker 03

  We'll be rolling it out to everyone later this year. Of course, it's software, so by its nature, we're going to continue to add stuff once we get to GA. But the goal is to get it in everyone's hands. Get it in the first people's hands over the next few months and in everyone's hands by the end of the year.

• 35:49Ryan Sean Adams?

  Thanks a lot. Bullish.

• 35:52Ryan Sean Adams?

  Bankless listeners, this has been fantastic. It's 2022. I can't believe I'm saying this, but Robinhood is helping us onboard the world, helping the world go a bit more bankless. It's great to have you guys here. Vlad, thanks so much for spending some time with us on this podcast.

• 36:06Speaker 03

  Thank you, gentlemen.

• 36:07Ryan Sean Adams?

  We appreciate you.

• 36:07Speaker 03

  Yeah, appreciate the time.