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

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. Yo!

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

Nice job.

Uh, who do we have on today? What are we talking about?

Yeah, we had Vlad Tenov, the CEO of Robinhood, and we of course are doing this at Permissionless because right before Vlad came into our makeshift podcast booth, uh he did uh they did they did a press release for a non-custodial wallet coming out of Robin Hood. So they are calling this Robin Hood 3, which I thought was Robinhood Web3, but it's actually Robin Hood the third evolution, which uh Vlad goes into in the podcast as well. So we try and pick his brains about what some of the features are in the this Robin Hood 3 app. Uh 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 wrap, except for the stuff he leaks.

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

Yeah.

Right. I I anticipated some of the fintechs who've created entire business models on being centralized to uh 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. So that's a step in and of itself. I think there are a lot of details that we'd love to uh learn, like what layer twos 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, uh Ethereum, ERC20 tokens.

Where do the swaps happen and how do the swap?

Exactly. Our smart contract wallet, how are keys restored, all of these things. And hopefully these questions will be revealed in time. But we kept this conversation surface level, uh, in 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 uh that in and itself is pretty exciting, David.

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

Yeah.

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

Dude, I enjoyed doing an in-person podcast with you. That was great. 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. Thank Less Nation. We are super excited to introduce you to Vlad Tennev. 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.

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

You know, I almost feel like saying like welcome to crypto as well. But I know Robinhood has been in crypto uh 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?

Well, let's see. Um

I I've been into crypto for

quite a while, just personally as an individual.

Um,

you know, I remember trying my hand at uh at Bitcoin mining back in 2011 with a

a CPU and

You know, seeing uh 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? Um,

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. 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 that's what led us to launch.

Robinhood Crypto back in early 2018, which was the

uh I think the the first major commission free offering for crypto by kind of uh an established company.

So that that got us into it. And then um

I guess you might ask why self custody? Why why is that interesting to us? Because that is deeper.

Announcing, right?

Yeah. We're announcing Robin Hood 3, which is uh self-custody done the Robin Hood 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 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 ownership of your keys over the past couple of years that have just sprung up has been uh has been really awesome to see. So, Robinhood,

obviously, we've been watching the space. Um, and I think they're now at the point where they're ready for a broader audience. And we we felt like we could build a really, really good product here, taking our two value propositions of low costs and amazing design and and deliver that to customers.

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

Yeah, I think uh Web3 is a is an obvious allegory. I think there's also

a reflection of kind of the different stages of Robin Hood. 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 Robin Hood way uh with Robinhood 3.

So I want to get into the the technical details. So how does that how does that work? Uh what does that that wallet look like? Uh 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?

Yeah, so I mean

I can't share too many of the details just yet because I want to 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 we kind of

um

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 custodying to begin with. But