The Rise of Robinhood Chain: Tokenized Stocks, Perps, and 27M Users | Johann Kerbrat
Robinhood Chain is live, and it may be one of the clearest signs yet that traditional finance is moving onto Ethereum rails.
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Inside the episode
TRANSCRIPT
David:
[0:03] On Wednesday of last week, Robinhood held their The World is Flat event, where they launched the Robinhood chain, along with a huge collection of ecosystem
David:
[0:10] partners and integrations. The World is Flat name is a tip of the hat to the fact that Robinhood wants to democratize access, flatten the world to have access to financial products using blockchain technology. And after watching that event, you don't really have to squint your eyes very hard to see the future of finance being rebuilt right before our very eyes. Tokenized stocks issued by Robinhood are freely and permissionlessly transferable around the Robinhood chain and on and off the Robinhood chain to the Ethereum layer one and the rest of its layer twos. Morpho is integrated into the main Robinhood app, offering Robinhood customers, the 27 million Robinhood customers, 7% yield on USDG stablecoin deposits in a non-custodial section of the main Robinhood app.
David:
[1:00] They've expanded PERP offerings to EU and Canadian customers of Robinhood, and they have a full feature-complete integration of LiDAR, the ZKL2 PERP decks on Ethereum inside the Robinhood wallet. So we now have one-to-one backed tokenized stocks with dividends and investor governance rights, if you want to do that, trading on Uniswap, creating a 24-7, 365 marketplace for U.S. equities. And you can see the PERPification for these things just right around the corner. So today on the show, I talked to Johan Carbat. He is the general manager of crypto at Robinhood, who has been trying to build this ecosystem for the last five years to get more details of what's being released. And it's just nothing short of exactly what we imagined the future of finance looking like just a few short years ago. Johan, welcome back to Bankless. Bankless Nation, I'm here with Johan Kerrott. He is the VP of crypto at Robinhood. We just came out, a pretty hot event out of the Robinhood ecosystem, the launch of Robinhood Chain with Johan. You have been working on this as long as I've known you at Robinhood. But it's got to feel pretty good to get that out the door.
Johann:
[1:59] Yeah, it was pretty exciting. And, you know, we did an event in London in a very, very cool place with like painting on the wall and on the ceiling. So that was really cool to be there and see all our customers and hearing the
Johann:
[2:10] cheers when we finally announced the chain. So that was great.
David:
[2:13] The name of the event was The World is Flat. Why was it called that?
Johann:
[2:17] Well, you know, Vlad is an amazing inventor and thinking about a lot of things constantly. And his vision was like, how do we show that using blockchain and using crypto, we can actually remove all the inequalities in the world and actually make persons that are anywhere in the world able to access and get exposure to U.S. Stocks, to perps, to all of these products. So that was kind of the idea behind it.
David:
[2:40] One thing I noticed, the hood stock was up like 8%, 9%, 10% on just all of the announcements, the Robinhood chain, tokenized stocks, the perp decks, the wallet, the yield. From the crypto side of things, it feels good that the market is responding positively to crypto news. It's not usually what is normal in the case in the last 12 months or so. So it's just like you are the VP of crypto at Robinhood. So thanks for doing all the great stuff that the market likes. I'm sure that must feel pretty well.
Johann:
[3:13] Yeah, I think for us, what's been exciting with this event is really that we can show to our customer our product velocity. You know, last year we announced a lot of things and this year we actually delivered on a lot of these things that we pre-announced. And on top of that, we added way more announcement than we were expecting. Just yesterday we announced 15 products. So I think, you know, a lot of our customers like said about that, they see our product manager on stage with us and presenting all these new tools and features that they can access on Robinhood. And on top of that, I think it shows that, you know, Robinhood has been one of these companies that has uniquely been able to ship so many features at once and always with the customer at the center of making sure that, what we ship is what they actually care about and they like it, they know how to use it, they are interested by it.
Johann:
[4:00] So yeah, overall, pretty excited about yesterday.
David:
[4:03] I've got some questions about those products that you guys released. So I'll just start going one by one. Let's start with tokenized stocks. I think this is probably the one that people found the most interesting. It touches the most amount of things, I think, on the crypto side of things. But just the implementation details, the technical details. How does a stock on Robinhood, become a Robinhood tokenized stock on Robinhood chain. What is that process like?
Johann:
[4:27] Yeah, so currently the system is a little complex just because of the fact that the US is not part of it just yet. But we have our exchange, Bitstamp, that is basically our exchange that is connected to all the institutions. The institution can come to Bitstamp and buy the stock tokens and then bring them on chain to one of the different DEXs that are available from Uniswap to LiDAR, Arcus, and many more. So that's currently how it's happening. But in the future, we want to find ways to simplify all this process.
David:
[4:59] What about just like the basic investor governance and dividends that one would have if I own stock on the Robinhood brokerage? Do I still have that if I own the stock as a token on Robinhood chain?
Johann:
[5:11] Yeah, so dividends, we'll pay them. CorpAction will also support them, all this kind of stuff. So for us, that was pretty important. The stock tokens are also back one-to-one. So, you know, that's something that is very key, I think, for the trust of the product. And on top of that, you know, if anything happens to Robinhood, the position of the customer is secure as well. So that was something also important. And what's really cool, I don't know if you saw it yesterday, but we showed how it interacts in the wallet if you're in one of the eligible countries. And you're really able to look at all the stocks. You can see the price moving, and some information about the stock token on the page. You can buy it. Yesterday was the first time that we were really trying it live. So it was pretty cool that everything worked during the event.
Johann:
[5:58] And the other cool part is you can actually utilize the stock tokens for other things. You can use them on chain. You can use them as collateral. I'm sure we'll start to see like landing pull around it. So, you know, you can really do more than if you were just keeping them on the brokerage. And the other thing that we showed yesterday is how you can send them to somebody else, to another wallet, which I think is a pretty unique thing that shows really the power of the blockchain. When you try to move your brokerage account to another brokerage account, you have this process that you call ACAD, takes multiple days. Sometimes weeks, sometimes you lose the cost basis, you lose information. But here, everything is on the blockchain, right? So you have all the information available on blocks. And so I think that really shows how powerful this technology can be. And the more.
Johann:
[6:46] The regulation will come into place, the more we'll be able to expand it to more jurisdiction. And I think that's really going to change how we interact with exchanges.
David:
[6:55] One of your guys' launch partner was, of course, Uniswap, and it was pretty cool to see the Robinhood tokenized stocks inside of the Uniswap interface. It's just like when we saw Uniswap be launched in 2019 and 2020 and saw all these early primitive tokens, we all kind of imagined one day there will be stocks in here and now we're actually seeing that. But that's on the Robinhood chain, the Uniswap instance on the Robinhood chain. Are the Robinhood stock tokens able to be transferred to the Ethereum layer one?
Johann:
[7:25] Yeah, and we saw different bridges happening already on the chain.
David:
[7:31] It's freely transferable across the Ethereum ecosystem.
Johann:
[7:33] Right. And that's really the mint and redeem where you have to utilize one of our platform. But yeah, it's been really cool. You know, the chain is not even live for 24 hours. I mean, technically, it was live for a couple of days before, but like we really just announced the launch less than 24 hours ago and we saw a million transactions already. So I think that's what we're excited about is to your point, that connection between crypto-first platform like Uniswap and other, and then the more traditional side of the world like Robinhood connecting together and really merging and creating a world where you can see this enthusiasm from the community.
David:
[8:13] Did you say that in order to transfer a Robinhood tokenized stock to the Ethereum layer 1, you have to go through a Robinhood mint and redeem function, or is it more permissionless?
Johann:
[8:22] I meant like it's a permissionless chain. You can do all the things. The only thing where you will need to interact with Robinhood at this point is to mint and redeem your token for either the stock or the equivalent in cash.
David:
[8:36] Right. Okay. So if I hold like an Apple share as a Robinhood stock token, I can send it to Robinhood and redeem an Apple share inside my Robinhood brokerage?
Johann:
[8:43] So currently we're not offering it, but that's something that we're working on for institutions especially. We think it's going to be something pretty important. But right now you can sell to Robinhood.
David:
[8:52] And then the Robinhood tokenized stocks, those are freely transferable between parties. And does the receiving party need to be KYC'd with Robinhood or is that also a permissionless transfer function?
Johann:
[9:02] No, currently it's permissionless. So if you utilize a wallet, it's very well done. Like I showed a demo the other day where it's really like you're transferring any crypto asset. In the future, we also want to find ways to make it more easy to find between, you know, like you mentioned, your actual worker age account and all these kind
Johann:
[9:21] of things. But that will take a bit more time.
David:
[9:23] I want to ask about USDG, which is the stablecoin issued by Paxos. I think you guys are a partner with Paxos. And then depositors is depositors who deposit USDG inside of the Robinhood app. This gets sent into Morpho, but that gives 7% yield for those who deposit. How does 7% is above any competitor that I see in the market? How does Robinhood generate 7% for the depositors?
Johann:
[9:50] Yeah, you know, I think for us, what was really interesting with this product was the fact that it was in the main app. So it's not part of our wallet. It's really within the main Robinhood app that is used by tens of millions of customers in the US. And the really cool part about it is when you start entering this flow, we actually create a smart wallet for you. I mean, it's a self-custody wallet, so you can eventually export the key if you want to and import it in your wallet or do whatever you want with it.
Johann:
[10:16] And so that, I think, was really cool because, you know, for the first time, we are really starting to merge the two worlds together, even more than we were doing before. And then, you know, you can deposit as much as you want, obviously. You can start from just cash. Part of the flow, you will have to buy USDG and we made it super easy for you. You can also withdraw at any time. And yeah, on the yield, you know, I think for us, one of the big things that we were worried about is that some of our competitors, when they launched similar products, they started with a hero rate and then within a few hours the rate will drop. So we spend a lot of time working with all our partners to make sure that we could actually have a hero rate that will be stable for a while. So it's approximately 7% to your point. And the reason why we're able to do this higher rate is just the fact that you're just bringing a giant like Robinhood with all partners, market makers are creating new pools for all the products that we're launching. And so there is a bit more demand around the rates. But for us, you know, I think it's when I joined Robinhood like five years ago, a bit more than five years ago, my goal was really to find a way to bring crypto to the masses. And this is probably the biggest step we did to actually do that.
David:
[11:32] Talk about why USDG? Talk about that partnership or that integration with Paxos.
Johann:
[11:38] Yeah, so we are part of the global dollar network. we are one of the founder members. And what we like about USDG is that the name generated through the treasury that are held for backing the USDG token is actually shared with a member of the network. And I think that's a big difference from what you're seeing with some of the other stable coins where it's mostly kept by the issuer. And the reason why we want to, push the boundaries around this is that we want to encourage people to actually hold a stable coin right now if you're an institution and you use another stable coin you're kind of at a disadvantage like you're actually your interest will be to sell as soon as possible your stable coin and to buy cash to make name on you on your cash with a normal traditional bank which in that situation, remove a lot of the advantage of having a stable coin you can't move it as quickly you can't do all the stuff that you you should be doing with collateral, So with USDG, it's the opposite, right? You still get the name. So for you, it's not as important to go back to cash. You can keep the USDG on your account. You can use it for all the things that you want to do, from funding a pool, using it as collateral, or anything like that. And so that's why we want to support that stablecoin. And that's why we created earn, Robin Earn, through that stablecoin as well.
David:
[13:02] And I mentioned that you deposit USDG and it goes into Morpho. That part is correct, right? So Morpho is not just integrated into the Robinhood wallet, but the main Robinhood application. Is that true?
Johann:
[13:13] That's right. So Morpho created vaults on the Robinhood chain and both the wallet and the main Robinhood app will interact with it. Same thing, the Robinhood app utilizes a smart wallet that is a self-custody wallet for the customer and that's connected to Morpho. We're using Stakehouse as a curator and we also have other partners like eSena, for example, that are going to help with all these products. But technically, you don't need to use the Robium app. If you want to connect
Johann:
[13:41] to one of the vaults, you can directly go on the Robium chain and deposit there.
David:
[13:45] Let's talk about perps. So there's a handful of different integrations with perps. One of them was an expansion of non-crypto perps. So things like Gold, Silver, QQQ, WTI. And then there was the crypto-native perps directly in the Robinhood wallet. That one, the crypto-native perps in the Robinhood wallet, that was an integration with LIDR. Was the earlier stuff I was talking about, the non-crypto asset perps, was that with Bitstamp, the exchange that you guys bought? Okay, so there's a delineation there. Talk about both of those things and how you guys divide that up.
Johann:
[14:18] Yeah, yeah, absolutely. So we are one of Bitstamp and Robin Europe, one of the only marketplace or exchange where you can trade perpetuals, in a platform that is regulated. So we have a Mifid license for Bitstamp and we have a Mifid license for WebMD Europe. And we're offering this product there with up to 10x of leverage. And I think it's important because for a lot of customers, they still don't want to go on DeFi. They still don't want to use a wallet. They don't want to connect to a platform like Hyperliquid and other where you don't necessarily know exactly what's going to happen. And so we have a platform where you can reach out to customer support. You can buy stock tokens, crypto, and also the perpetual that are regulated.
Johann:
[15:03] And it's one of the most sticky products that we've launched in Europe. And we've seen a lot of demand for this other type of asset, from commodities to ETF. And especially during the weekends for the past few months, like you've seen, you know, oil, for example, moving quite a bit on some of these markets. So the demand was strong. We're excited to launch that.
Johann:
[15:26] It's seven new contracts from silver gold to QQQ as an ETF and other. And I think it really brings diversity and different products for our customers to try. And then, you know, one of our mission is to expand across the world, right? So we can't go to every single country and get a license and implement all the system because it just takes a while. And so we are doing it one by one. You know, we've done it with Europe. We also launched Robinhood in Canada yesterday. We're also live in the UK and in other countries. So, you know, we are going as fast as we can, but for the rest of the world, what we were thinking was really, how can we use crypto and blockchain to actually accelerate the expansion of Robinhood? And so we have this Robin wallet, it's available in 100 plus countries. And in the eligible places, you can see the perpetual experience. It's a separate tab. It's connected to LiDAR. You will see all the contracts that are available with leverage up to 20 to 50x, depending on the contracts. And basically, the interface is really, really proper to Robinhood. Like we made sure to implement all the things that work very well in the EU. You can decide on your margin using a slider. Same thing with leverage. And, you know, obviously, like, we'll see how it goes, but I think we'll see
Johann:
[16:49] a lot of people being really excited about having this simple UI and UX to trade with Spurps.
David:
[16:54] This lighter partnership inside of the Robinhood wall, I find pretty interesting. During your section of the presentation yesterday when you were talking about them, you ended it with, we will continue to deepen our collaboration with them, them being lighter. What does that mean?
Johann:
[17:09] Well, a ton of stuff. We, you know, we think this is just the beginning. I think Perpetual is a great way to trade differently from opening long shorts, different type of products. You don't have the same structure as some of those similar but not similar products as like CFDs, for example, that are pretty different. So I think we're just at the beginning. And I think it's one of this kind of crypto primitive that is actually going to make its way into more and more traditional finance systems. And so I think for us, we want to make sure that when we create partnership, we create this deep relationship. One thing that we announced, for example, is that LIDAR is committing about 11 million worth of lead token. And that will start in August 1st. When you start trading either directly on LIDAR using web, you will get one point. If you use the Robin wallet, you will get two points and we'll start splitting the pool of tokens through that. And, you know, that's the kind of stuff we want to do. But I think, you know, there is a lot more that we can do. And so we will show what's possible in the future. But I think this is just the beginning for us.
David:
[18:21] One thing I thought was pretty interesting was that LiDAR built their engineers. They have a bunch of forward deployed engineers. They built a custom instance of LiDAR on the Robinhood chain. So rather than the Robinhood wallet pointing to the LiDAR ZKL2, the LiDAR engineers just built you guys an instance of LiDAR on the Robinhood chain. Why did you guys want that? What does that do for you guys?
Johann:
[18:45] Yeah, it's a little more complicated. Like it's not fully an entire exchange that is on our chain, but basically it's settled using the Robium chain. I think for us, it's important because we want to make sure that everything that are connected to our products or the Robium products, we can control a lot of the UI, UX, all the rules that we put in place. And we want to make sure that it's also contributing to the ecosystem. So the Robinhood chain is brand new, and we want to make sure that we can have all the partners building on it and really develop on top of it.
David:
[19:18] So we have the non-crypto perps, which is serviced by Bitstamp, and that is in the main Robinhood wallet, like the normal Robinhood wallet, but only available. Oh, is that not right?
Johann:
[19:27] It's in the Robinhood Europe app.
David:
[19:30] Oh, that's a separate app.
Johann:
[19:31] Right. I see. It looks like Robinhood if you're in the US and you're used to it, but it's in Europe. That's a regulated platform. And then the Robin Wallet or DeFi self-custody platform that's connected to, LiDAR through the Robin chain, yeah.
David:
[19:45] Okay, and you guys are just waiting, like everyone else is, for clarity from the regulators, the CFTC, to put perps in the main Robinhood app?
Johann:
[19:53] I think, you know, we would be lying if we wouldn't say that we are interested in that. We have the technology, we build the UI, the UX, we know our customers love
Johann:
[20:02] it. So for sure, when we get clarity on these points, it's something that we'll be interested in.
David:
[20:07] What is the long-term balance between the Robinhood wallet and main Robinhood core? Because if you want to put perps, which is a, it's not only a, it's just a neutral instrument, but, you know, crypto kind of created it. We have the backend for it. If you wanted to put perps inside of the main Robinhood wallet, you already have a stable coin getting 7% yield in Morpho in the main Robinhood wallet. How do you think about the long-term equilibrium between the main Robinhood app, which is the dominant source of your guys' users and AUM and all the activity, versus the Robinhood wallet? Like, eventually, might these things be the same? Or do you think they'll converge or divert?
Johann:
[20:46] No, I think, you know, our vision is really that the traditional systems are going to slowly replace our technology with blockchain technology. It's just faster. It's broad proof in terms of like verification. You can see the history. You have decentralization, fractionalization by default. And so I think slowly we are going to start seeing more and more features where, you know, instead of using the classic clearing system that we have for stocks, It will be a blockchain powered system. And same thing with the yield or the earned system that we put in place. You know, right now, It's using a smart wallet, but this smart wallet can do a lot more things. So I think it's just a function of like, what is the regulation in the different countries? What are the proper systems to put in place to make sure that customers understand what's going on? But based on that, I think the two worlds are going to converge more and more. And, you know, if you start using a Robin wallet that is like fully DeFi, fully self-custodial.
Johann:
[21:49] The experience to buy perps or to even find your wallet is becoming more and more easy you don't necessarily need to send crypto to find your wallet, you can actually use Fiat Rails, either Apple Pay or Google Pay to start finding your wallet, You can open the perps, like I said, in a very simple way. You don't have like 20 things to approve where you're never really sure what's going on. So we spend a lot of time making this UX simple. And I think in a lot of countries where we are not live as a licensed platform, we will actually be able to start seeing the wallet for a lot of our customer being a good solution for them.
David:
[22:27] Would you say that if and where it makes sense, if Robinhood can put some of its business logic on chain, again, just like USDG on Morpho, for example, and, you know, the Perps on Lighter, if it can put its business logic on chain, it will?
Johann:
[22:42] I think if there is a benefit for the customer, for sure. And that's what happened, with, you know, Robinhood Earth program. We felt like this was a much better solution for our customer than what's out there currently. And so, you know, there was not even a question of should we do it or not. It was more like, how do we do it? And I think if tomorrow we have a product that we think can benefit from blockchain, can reduce the cost to the customer, for example, you know, why not doing it? As long as it can fit the requirement that we have from our regulation, you know, it's in the advantage of the customer. So let's do it.
David:
[23:17] One thing that I think is cool about this is that blockchains are just fantastic business models. They're pretty low overhead to run and chain fees can turn
David:
[23:25] into something pretty substantial. One of your guys' partners is Arbitrum, of course. The Robinhood chain is an Arbitrum orbit chain. How has your experience working with Arbitrum been? Would you recommend Arbitrum to other institutions building chains on Ethereum?
Johann:
[23:42] Yeah, absolutely. So we partner with Offchain. They are helping us put the chain in place. They've been awesome to work with, honestly. And I think the, What we like about Arbitrum is multifold. There is stylus. You can use any kind of language or multiple languages like Rust, for example, to write instead of just being stuck to the one language based on Ethereum. You can also have a priority system that is a bit different. We think the gas fees are pretty low. So far, we've been very happy with the latency. So I think for us, Arbitrum was a great choice and we're happy to be part of the family now. And, you know, being part of EVM where we can easily bridge between all the, big chain was also big elements that we were excited about. And we still rely on Ethereum for the overall security and decentralization. So I think that's, so far, we've been pretty happy with our choice.
David:
[24:36] Well, the Robinhood is one of the few companies that I actually do look at the S1s every quarter when Robinhood submits its S1s. And so I'm going to be pretty excited to see a new line item in the Robinhood S1, which is the Robinhood chain. And everything that has benefited from that. Yeah, Johan, there is another Robinhood event coming up in about, I think, like Q3 in Texas. I've signed up to be a moderator at that event to talk about the Robinhood wallet with somebody from your guys' team.
Johann:
[25:02] Oh, that's awesome.
David:
[25:04] Any advice for me? Any questions I should ask? What would you think that I should talk about in a few months when it comes to the Robinhood wall at this event?
Johann:
[25:11] Well, you know, hopefully by then we'll have a few more announcements. So hopefully you will talk about them. But I think seeing, you know, talking a bit about the ecosystem around it, I think is interesting. You know, I've been in the space for a long time and a lot of time I've seen chain going after developers to find ways to get them excited to build on the chain. Here, the situation is a bit reversed. People are really excited about having the distribution coming from Robinhood and having all these customers that are not necessarily crypto first, but actually excited about using crypto if it's better for them. And so that's what I think we should talk about a bit more. How do we continue to bring more of this non-crypto person into the space and maybe speak a bit less about protocols and all the technical stuff? That we can leave it for the engineer, but actually shows a benefit to the customers.
David:
[26:02] Are you building and designing the Robinhood wallet to penetrate into the crypto market and compete with things like Phantom, MetaMask, you know, the base app? Or are you building Robinhood wallet to target a new audience that has never really been on chain before, but perhaps they'll like it because of all the cool tools that you guys have?
Johann:
[26:22] Yeah, I think the latter, you know, we are pretty much more focused on easy to use, simple UX, simple UI, educational tool. We really think that blockchain is a better solution for a lot of the financial system. And so we want to find a way to get people to use it. But the reality is that blockchain was made by engineer for engineer. You know, the first time you have to enter all these worlds to create a passphrase and you have to create bridges and transaction to just find your wallet for the first time. Every time you have to pay fees, you have to connect to DEXs and all this stuff, like all of that is so complicated. We are losing like 99% of the population. Even though they could benefit the most from having like the blockchain technology, lower fee, lower cost. So I think for us, the idea is that, you know, there is multiple billion of people on the planet that are not using crypto. How do we bring them into that space?
David:
[27:19] Johan, thanks for coming on the show today.
Johann:
[27:21] Thank you. See you soon.
David:
[27:22] If one more question, actually, before if somebody wanted to get started on Robinhood Chain, what activity would you recommend? Where should they go first? What can they do there that you would do if you were coming onto Robinhood Chain first?
Johann:
[27:32] Yeah, we have all the docs on our platform if you want to develop on it. But also, you can use our wallet. You will see a tab for perps. You can search tokens and all the stock tokens that we launched recently. And yeah, give us feedback. Honestly, I think that's the most exciting part. We want to build with customers. We want to build with you. So if we are missing anything, let us know and we'll try to prioritize it.
David:
[27:53] John, thanks for coming on the job.
Johann:
[27:55] Thank you.
David:
[27:55] Bankless Station, another gargantuan blockchain added to the Ethereum ecosystem. That's really exciting for all of us. but nonetheless, crypto is risky. You can lose what you put in. This is Frontier. It's not for everyone, but we are glad you were with us on the bankless journey.
Transcript
On Wednesday of last week, Robin Hood held their the world is flat event where they launched the Robin Hood chain along with a huge collection of ecosystem partners and integrations. The world is flat name is a tip of the hat to the fact that Robin Hood wants to democratize access flatten the world to have access to uh financial products using blockchain technology. And after watching that event, you don't really have to squint your eyes very hard to see the future of finance being rebuilt right before our very eyes. Tokenized stocks issued by Robin Hood are freely
and permissionlessly transferable around the Robin Hood chain and on and off the Robin Hood chain to the Ethereum layer 1 and the rest of its layer 2. Morpho is integrated into the main Robin Hood app, offering Robin Hood customers, the 27 million Robin Hood customers, 7% yield on USDG stablecoin deposits in a non-custodial section of the main Robin Hood app. They've expanded per offerings to EU and Canadian customers of Robin Hood, and they have a full feature
integration of lighter, the ZKL2 per deck on Ethereum inside the Robin Hood wallet. So we now have 1:1 backed tokenized stocks with dividends and investor governance rights if you want to do that trading on unis swap creating a 24/7 365 marketplace for US equities and you can see the purpation for these things just right around the corner. So today on the show I talked to Johan Kerbot. He is the general manager of crypto at Robin Hood who has been trying to build this ecosystem for the last five years to get more details of what's
being released and it's just nothing short of exactly what we imagined the future of finance looking like just a few short years ago. Johan, welcome back to Banklist Bank. I'm here with Johan Kerrat. He is the uh VP of crypto at Robin Hood. Uh we just came out of a pretty hot event out of the Robin Hood ecosystem, the launch of Robin Hood chain, which uh Johan, you have been working on this as long as I've known you at Robin Hood. It's got to feel pretty good to get that out the door. >> Yeah, it was pretty exciting. And uh you know, we did an event in London uh in a very very cool place uh with like
painting on the wall and on the ceiling. So that was really cool to be there and see all our customer and hearing the cheers when we finally announced the chain. So that was that was great. >> The uh name of the event was the world is flat. Why was it called that? >> Well, you know, Vlad is an amazing uh uh inventor and thinking about a lot of things constantly and his vision was like how do we show that using blockchain and using crypto we can actually uh remove all the inequalities in the world and actually make uh person that are anywhere in the world able to
access and get exposure to US stocks to burps to all these products. So uh that was kind of the idea behind it. One thing I noticed, uh, the Hood stock was up like eight, nine, 10% on the on the just all the announcements, the the Robin Hood chain, tokenized stocks, the perex, the wallet, the yield. It feel from the crypto side of things, it feels good that the market is responding positively to crypto news. That is not usually what is normal in the case in the last like 12 months or so. So, uh,
just like you you are the the VP of crypto at Robin Hood. like, you know, thanks for for doing all the great stuff that the market likes. I'm I'm sure that must feel pretty well. >> Yeah. You know, I think for us, what's been exciting with this event is really that we can show to our customer our product velocity. Uh you know, last year we announced a lot of things and uh this year we actually delivered on a lot of these things that we pre-announced and on top of that we added way more announcement that we were expecting. Just yesterday we announced 15 products. So I think you know a lot of our
customers are excited about that. they they see our product manager on stage with us and presenting all these new uh tools and feature that they can access on Robin Hood and on top of that uh I think it shows that you know Robin has been one of these companies that has uniquely been able to ship so many feature at once and um always with the customer at the center making sure that you know what we ship is what they actually care about and they like it they know how to use it they are interested by it so yeah overall pretty pretty excited about yesterday
>> I've got some questions about those products that you guys released. So I I'll just start going one by one. Let's start with tokenized stocks. I think this is probably the one that people found the most interesting. It touches the most amount of things I think on the crypto side of things. But just the implementation details that the technical details. How does a stock >> on Robin Hood become a Robin Hood tokenized stock on Robin Hood chain? What what is that process like? >> Yeah. So, so currently the system is uh a little uh complex uh just because of
the fact that the the US is not part of it just yet. But um we have our our exchange Bitstamp that is basically our uh exchange that is connected to all the institution. Institution can come to Bitstamp and buy the stock tokens and then bring them on chain to one of the different uh dexes that are available from uh unis swap to uh lighter arcus and and many more. So um that's currently how it's happening but in the future we want to find ways to um simplify all this process.
>> What about just like the basic investor governance and dividends that one would have if I if I own a stock on the Robin Hood brokerage. Do I still have that if I own the stock as a token on Robin Hood chain? >> Yeah. So dividend will pay them. Um corp action will also support them. All this kind of stuff. So for us that was pretty important. Um the stock tokens are also back one to one. So you know that's something that is very key I think for the trust of the product. Um and on top of that you know if anything happens to
to Robin Hood u the position of the customer is secure as well. So that was something also important. Um and what's really cool I don't know if you saw it yesterday but we uh showed how it interacts in the wallet if you're in one of the eligible countries. And you're really able to to look at all the stocks. You can see the price uh moving and and some information about the the stock token uh on the page. You can buy it. Um yesterday was uh you know the first time that we were really trying it live. So it was pretty cool that
everything worked uh during the event. And and the other cool part is you can actually utilize the stock tokens for other things. You can use them on chain. Uh you can use them as collateral. Um I'm sure we'll start to see like lending pool around it. So, you know, you can really do more than if you were just keeping them on the brokerage. Um, and the the other thing that we showed yesterday is how you can send them uh to to somebody else to another wallet, which I think is a is a pretty unique thing that shows really the power of uh
the blockchain. When you try to move your brokerage account to another brokerage account, you have this process that you call ECAD takes multiple days, um sometimes weeks, sometimes you lose a cost basis, you lose information. But here everything is on the blockchain, right? So you have all the information available on blocks. Um and so I think that really shows how how powerful this technology can be and the more the the the you know the regulation will come into place, the more we'll be able to uh expand it to more jurisdiction and I
think that's really going to change how we interact with with exchanges. >> One of your guys' launch partner was of course unis swap and it is pretty cool to see the Robin Hood tokenized stocks inside of the Uniswap interface. It's just like when we saw UniS swap be launched in 2019 and 2020 and saw all these like, you know, early primitive tokens, we all kind of imagined, you know, one day there will be stocks in here and now we're actually seeing that. But that's on the Robin Hood chain, the Uniswap instance on the Robin Hood chain. >> Are the Robin Hood stock tokens able to
be transferred to the Ethereum layer 1? >> Yeah, and we, you know, we saw different bridges happening um already um on on the chain transferable across the Ethereum ecosystem, >> right? And and that's really the the mint and redeem where you have to utilize one of our platform. Um but but yeah, it's been really cool. You know, the the chain is uh not even live for for 24 hours. I mean, technically, it was live for for a couple of uh days before, but like we really just announced the launch uh less than 24
hours ago, and we saw a million transaction already. So I think that's what we're we're excited about is to your point that connection between u crypto first platform like unis swap and other and then the more traditional uh side of the world like Robin Hood connecting uh together and really emerging and creating a world where you can see this enthusiasm from the community. Did you say that in order to transfer a Robin Hood tokenized stock to the Ethereum layer 1, you have to go through a Robin Hood mint and redeem function or is it more per I meant like
um it's a permissionless chain. You can do other things. Yeah. The only thing where you will need to interact with Robin at this point is to mint and redeem your token for um either the the stock or or the the equivalent in cash, >> right? Okay. Okay. So, if I hold like an Apple share as a Robin Hood stock token, I can send it to Robin Hood and redeem an Apple share inside my Robin Hood brokerage. >> So, currently we're not offering it, but that's something that we're working on for for institution especially. We think it's going to be something pretty important. Um, but right now you can
sell uh to to Robin Hood. >> And then the Robin Hood tokenized stocks, those are freely transferable between parties. And do does all does the receiving party need to be KYC with Robin Hood or is that also a permissionless transfer function? No, currently it's permissionless. Um, so if you utilize our wallet, it's very well done. Like I I showed a demo the other day where it's it's really like you're transferring any any crypto asset. Um, in the future, we also want to find ways to make it more easy to find between uh,
you know, like you mentioned your actual brokerage account and all these kind of things, but that that will take a bit more time. >> I want to ask about USDG, which is the the stable coin issued by Paxos. I think you guys are are a partner with Paxos. And then uh depositors is depositors who deposit USDG inside of the Robin Hood app. This gets sent into Morpho, but that gives 7% yield for those who deposit. How does 7% is above any competitor that I see in the market? How does how do does Robin
Hood generate 7% for the depositors? >> Yeah, you know, I think for us what was really interesting with this product was the fact that it was in the main app. Um so it's not out of our wallet. Uh it's really within the main Robinet app that is used by tens of million of of customer in the US. Um and the really cool part about it is when you start entering this flow, we actually create a smart wallet for you. Um it's a self-custody wallet. So you can eventually export the key if you want to and import it in your wallet or do whatever you want with it. Um, and so
that I think was really cool because you know for the first time we're really starting to merge the two worlds together uh even more than we we were doing before. Um, and then you know you can deposit um as much as you want obviously uh you can start from just cash part of the flow you will have to uh buy USDG and we made it super easy for you. You can also withdraw at any time. Um and yeah on the on the yield you know I think for us one of the big things that we were worried about is that some of our competitor when they
launch similar products they they started with a hero rate and then you know within a few hours the rate will drop. Um so we spent a lot of time working with all our partners to make sure that we could actually have a hero rate that will be stable for a while. Um so it's it's approximately 7% to your point. Um and the reason why you know we're able to do this higher rate is just the the fact that you're you're just bringing like a giant like Robin Hood with all partners uh market makers are creating new pools for uh all the
products that we're launching and so there's a bit more uh demand around uh around the rates but for for us you know I think it's when I joined Robin like 5 years ago a bit more than five years ago my goal was really to find a way to bring crypto to the masses and this is probably the big biggest step we did to to actually do that. >> Talk about um YUSDG. Uh talk about that that partnership or that integration with with Paxos. >> Yeah, so we are part of the global dollar network. We're one of the founder
member. Um, and what we like about USDG is that the name generated through the, you know, the treasury uh that are held uh for for backing the the USDG token um is actually shared with a member of of the of the network. And I think that's a big difference from what you're seeing with some of the other stable coin uh where you know it's it's mostly kept by the issuer. Um and and the reason why we want to push the boundaries around this is that we want to encourage people to
actually hold uh stable coin right now. If you're an institution and you use um another stable coin, you're kind of at a disadvantage. Like you're actually your interest will be to sell as soon as possible your stable coin and to buy cash to make name on your on your cash with a normal traditional bank which in that situation remove a lot of the advantage of having a stable coin. You can't move it as quickly. you can't do all the stuff that you you should be doing with collateral. Um so so with USDG it's the opposite,
right? You you still get the name. Um so for you it's not as uh important to go back to cash. You can keep the USG on your on your account. Uh you can use it for all the things that you want to do from funding a pool, using it as collateral or anything like that. Um and so that's why we we want to support that stable coin. Um and that's why we create earn uh robin earn through through that stable coin as well. >> And I I mentioned that you uh uh you deposit USCG and it goes into Morpho.
That that part is correct. Right. So Morpho is not just integrated into the Robin Hood wallet but the main Robin Hood application. Is that true? >> That's right. So so Morpho uh created vaults on the Robin Hood chain and both the wallet and the main Robin Hood app will interact with it. Um same thing the the the Robin app utilize a smart wallet um that is a self-costed wallet for the customer and that's connected to to Moro um we're using steakhouse as a creator um and we also we also have other partners like Eina for example that are
going to help uh with with all these products but um technically you don't need to use the Robin app if you want to connect to one of the vault uh you can directly go on the Robin chain and and deposit there >> let's talk about per uh so there's a handful of different integrations with with per one of them was an expansion of non-crypto per so things like gold silver QQQ uh WTI uh and then there was the the cryptonnative pers directly in the Robin Hood wallet that one the the
cryptonative per in the Robin Hood wallet that was an integration with lighter was the earlier stuff I was talking about the non-crypto asset per was that with uh Bitstamp the exchange that you guys bought okay so there's a delineation there talk about both of those things and how you guys divide that up. >> Yeah. Yeah. Absolutely. So, we are one of Bitstamp and Robin Europe are one of the only marketplace or exchange where you can trade uh perpetuals in a in a platform that is regulated. Uh so we have a Miffid license for BitMP and we
have a MIT license for for RA Europe. Um and we're offering this product there with up to 10x of leverage. Um, and I think it's important because for a lot of customer, um, they still don't want to go on DeFi. They still don't want to use a wallet. Uh, they don't want to connect to platform like Hyperlquid and other where you don't necessarily know exactly what's what's going to happen. Um, and so we have a platform where, you know, you can reach out to customer support, you can uh buy stock tokens, crypto, and also the the perpetual that
are regulated. um we we it's one of the most sticky products that we've launched in Europe and we've seen a lot of demand for this other type of assets from commodities to to um ETF and especially during the the weekends for the past few months like you you've seen you know oil for example moving quite a bit on on some of these markets so so the demand was strong uh we're excited to launch that it's seven new contracts uh from
silver to uh QQQ as an ETF and other and I think it really brings diversity and uh different products for for our customer to try and then you know one of our mission is to expand across the world right so uh we can't go to every single country and get a license and uh implement all the system because it just takes uh a while and so we are doing it uh one by one you know we we've done it with Europe we also launched uh Robin Hood in Canada uh yesterday. Uh we're
also live in the UK and in other countries. So, you know, we are going uh as fast as we can, but for the rest of the world, what we are thinking was really how can we use crypto and blockchain to actually accelerate the the expansion of Robin Hood. And so, we have this Robin wallet. Uh it's available in 100 plus countries. And in the eligible places, you can see the perpetual experience. It's a it's a separate tab. Um it's connected to lighter. uh you will see all the the contracts that are available uh with
leverage up to 20 to 50x depending on the contracts. Um and and basically the interface is really really proper to Robin Hood like we we made sure to implement all the things that work very well in the in the EU. Uh you can u decide on your margin using a slider. Same thing with leverage. Um, and you know, obviously like we'll see how it goes, but I think we'll see a lot of people being really excited about adding this simple UI and UX uh to to trade with with Purps. >> Yeah, this uh lighter partnership inside
of the Robin Hood wallet I find pretty interesting at during your section of the uh of the presentation yesterday when you were talking about them, you ended it with uh we will continue to deepen our collaboration with them, them being lighter. What does that mean? >> Well, um a ton of stuff. We, you know, we think this is just a beginning. I think perpetual is a is a great way to to trade differently from opening long, shorts, uh different type of products. Um you don't have the same structure as some other uh similar but not similar
products as like CFDs for example. They're pretty different. Um so so I think we're just at the beginning and I think it's one of this uh kind of uh crypto uh primitive that is actually going to make its way into more and more of traditional finance uh systems. So I think for us we we want to make sure that when we create partnership we we create this deep relationship. Um one thing that we announced for example is that uh lighter is committing about 11 million uh worth of lit to lit token. Um
and that will start in August 1st. When you start trading either on directly on lighter using web uh you will get one point. If you use the Robin wallet you you will get two points and we'll start spitting the the pool of tokens uh through that. And you know that's the kind of stuff we we want to do. But I I think you know there's a lot more that we can do. And so uh we we will uh show what what's possible in in the future. But I think uh this is just the beginning for us. >> One thing I thought was pretty
interesting was that lighter built using their engineers. They have a bunch of forward deployed engineers. They built a custom instance of lighter on the Robin Hood chain. So rather than the Robin Hood wallet pointing to the lighter ZKL2, the lighter engineers just built you guys an instance of lighter on the Robin Hood chain. Why did you guys want that? What does that do for you guys? >> Um yeah, it's a little more complicated. Like it's not fully an entire exchange that is on our chain, but it basically it's settled using the Robin chain. Um I
think for us it's it's it's important because we want to make sure that everything that um are connected to our products the wire products we can control a lot of the UI UX um all the the rules that we put in place and and you know we want to make sure that it's also contributing to to the ecosystem. So um the Robin chain is brand new uh and we want to make sure that we can have all the partner building on it um and and really develop on on top of it. So, we have the the non-crypto per which is serviced by Bitstamp and that is in
the main Robin Hood wallet, like the normal Robin Hood wallet, but only available. Is that Oh, is that right? >> It's in the Robin Europe app. Uh, so >> Oh, that's a separate app, >> right? It's it's it's like it looks like Robin Hood if you're in the US and you're used to it, but it's in Europe. That's a regulated platform. Um, and then the Robin wallet or DeFi self-custody platform. Um, that's connected to lighter through the Robin chain. Yeah. >> Okay. And you guys are just waiting like everyone else is for clarity from the regulators, the CFTC to put per in the
main Robin Hood app. >> I I think you know we we would be uh lying if we wouldn't say that we are interested in that. We we have the technology, we build the UI, the UX, we know our customer love it. So uh for sure when uh we get clarity on this point, it's something that we'll be interested in. >> What is the long-term balance between the Robin Hood wallet and main Robin Hood core? Because if if you want to put pers, which is a it's not only a cry, it's just a neutral instrument, but you know, crypto kind of created it. We have the back end for it. If you wanted to
put pers inside of the main Robin Hood wallet, you already have a stable coin getting 7% yield in Morpho in the main Robin Hood wallet. How do you think about the long-term equilibrium between the main Robinood Hood app, which is the dominant source of your guys' users and AUM and all the activity, versus the Robin Hood wallet? Eventually, might these things be the same or do you think they'll converge or diverge? >> No, I I think you know our our vision is really that the traditional systems are going to slowly replace our technology
with with blockchain technology. Uh it's just faster. It's bulletproof in term of like verification. You can see the history. Uh you have decentralization, fractionalization baked by default. Um and so I think slowly we're going to start seeing more and more features where you know instead of using um the classic clearing system that we have for stocks uh it will be a blockchain powered uh clearing system and same thing with the the yield or the the earn
system that we put in place. Um you know right now it's using a smart wallet but this smart wallet can do a lot more things. So um I think it's just a function of like what is the regulation uh in in the different countries what are the the proper system to put in place to make sure that customer understand what's going on uh but based on that I think the two worlds are going to converge more and more and you know if you start using our Robin wallet that is like fully defy fully self-custodial
um the the the experience to buy pers or to even find your wallet is becoming more and more easy like uh you don't necessarily they need to send crypto to to fund your wallet. You can uh actually use fiat rails either Apple Pay or Google Pay to start funding your wallet. Um you can open the the per like I said like very uh in a very simple way. You don't have like 20 things to approve where you're never really sure what's going on. So you know we spend a lot of time making this UX simple and I think in a lot of countries where we are not
live as a you know licensed uh platform we will actually be able to start seeing the wallet um for for a lot of our customer being a good solution for them. Would you say that if and where it makes sense if Robin Hood can put some of its business logic on chain again just like USDG on Morpho for example you know the per on lighter if it can put its business logic on chain it will >> I I think if there is a benefit for the customer for sure and that's what happened with with you know Robin H
program uh we we felt like this was a much better solution for our customer than what's out there currently and So you know there was not even a a question of should we do it or not. It was more like how do we do it and I think if tomorrow we we have a product that we think can benefit from blockchain can reduce the cost to the customer for example uh you know why not doing it as long as uh it can fit the requirement that we have from from our regulation uh you know it it's in the advantage of the customer. So so let's do it.
>> One thing that I think is cool about this is that blockchains are just fantastic business models. a pretty low overhead to run and chain fees can turn into something pretty substantial. >> Your guys, one of your guys' partners is is Arbitum of course. Uh you the Robin Hood chain is an arbitum orbit chain. How has your experience working with Arbitum been? Would you recommend Arbitum to other institutions building chains on Ethereum? >> Yeah, absolutely. We So we partner with Offchain. They they are helping us put the the chain in place. uh they've been
awesome to work with honestly and I think the the the what we like about arbitrum is multiffold there is stylus you know you can use any kind of language or multiple languages like Russ for example to to write um instead of just being stuck to the one language or based on Ethereum um you can also uh have a priority system that is a bit different uh we think the gas fees are pretty low uh so far we've been very happy with the latency so you know I I I think for us uh arbitrum was a great
choice and and we're happy to to be part of uh the family now and you know being part of EVM where we can easily bridge between all the big uh big chain was also a big element that we we were excited about um and we still rely on Ethereum for the overall security and and decentralization. So I think that's um so far we we've been pretty happy with our choice. Well, the uh Robin Hood is one of the few companies that I actually do look at the S1's every quarter when Robin Hood submits its S1's. And so I'm going to be pretty
excited to see a new line item in the Robin Hood S1, which is the Robin Hood chain and everything that is uh benefited uh from that. Yan, there is another Robin Hood event uh coming up in about I think like Q3 uh in Texas. I've signed up to be a moderator at that event to talk about the Robin Hood wallet with somebody from uh your guys' team. >> Oh, that's awesome. any any advice for me? Any questions I should ask? What what would you think that I uh should talk about uh in a few months when it comes to Robin the Robin Hood wallet at this event?
>> Um well, you know, hopefully by then we'll have a few more announcements. So hopefully you you will talk about them. But um I think seeing you know talking a bit about the the ecosystem around it I think is interesting. uh you know I've been in the space for a long time and um a lot of time I've seen chain going after developers to find ways to get them excited to build on the chain. Here the the situation is a bit reverse like people are really excited about having the distribution coming from from Robin Hood and having all these customers that
are not necessarily crypto first but actually excited about using crypto if it's better for them. Um, and so that's what I think we we should talk about a bit more like how do we continue to bring more of this non-crypto person into the space. Um, and maybe speak a bit less about protocols and all the the technical stuff that that we can leave it for the engineer but actually shows a benefit to to the customers. Are you building and designing the Robin Hood wallet to penetrate into the crypto market and compete with things like
Phantom, MetaMask, you know, the base app? Or are you building Robin Hood wallet to target a new audience that has never really been on chain before, but perhaps they'll like it because of all the cool tools that you guys have? >> Yeah, I think the latter. You know, we we're pretty much more focused on easy to use, simple UX, simple UI, educational tool. uh we really think that blockchain is a better solution for a lot of the financial system and so we want to find a way to get people to to use it. But the reality is that
blockchain was made by engineer for engineer uh you know the first time you have to uh enter all these worlds to create a a passphrase and you have to create bridges and uh transaction to just fund your wallet for the first time. every time you have to pay fees uh you have to connect to dexes and all this stuff like all of that is so complicated we are losing like 99% of the population um even though they could benefit the the most from from having like the blockchain technology lower fee lower cost so I think for us the idea is
that you know there's multiple billion of people on on the planet that are not using crypto how do we bring them into that space >> Johan thanks for coming on the show today >> thank you see you soon If uh one more question actually before if uh somebody wanted to get started on Robin Hood chain, what activity would you recommend? Where should they go first? Uh what can they do there that uh you would do if you uh were coming on to Robin Hood chain first? >> Yeah, we have all the docs on our platform if you want to develop on it. Um but also like you can use our our wallet. Uh you will see a tab for per you can search tokens and all the stock
tokens that we we launched recently. Um and yeah, give us feedback. Honestly, I think that's the most exciting part. Uh we want to build with customer, we want to build with you. So um if we're missing anything, let us know and we'll try to prioritize it. >> John, thanks for coming on the show. >> Thank you. >> Bank stationation, another gargantuan blockchain added to the Ethereum ecosystem. That's really exciting for all of us, but nonetheless, crypto is risky. You can lose what you put in. This is frontier. It's not for everyone, but we are glad you were with us on the bankless journey. Thanks a lot.
David Hoffman
Co-owner at Bankless. Optimistic storyteller of frontier technology.
