Bankless - Robinhood vs. Coinbase: Who Wins the Future of Finance? | David Rodriguez & Omar Kanji

Episode Date: July 3, 2025

David from Blockworks and Omar from Dragonfly join the show to debate Coinbase vs Robinhood, two companies racing to become the dominant financial super app. We break down their business models, growth strategies, tokenized asset plays, and how each is approaching crypto, equities, and infrastructure. Will Robinhood’s slick UX and expanding product suite win the next generation? Or will Coinbase’s onchain infra and stablecoin moat prove unbeatable? Omar & Dragonfly https://x.com/TheOneandOmsy https://x.com/Dragonfly_xyz David & Blockworks https://x.com/EffortCapital https://x.com/BlockworksAdv --- 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium --- BANKLESS SPONSOR TOOLS: 🪙FRAX | SELF SUFFICIENT DeFi https://bankless.cc/Frax 🦄UNISWAP | SWAP ON UNICHAIN https://bankless.cc/unichain 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle 🟠BINANCE | THE WORLDS #1 CRYPTO EXCHANGE https://bankless.cc/binance --- TIMESTAMPS 0:00 Intro 2:37 Understanding Coinbase 8:31 Coinbase B2B 13:39 Comparing Revenue, Valuation, & Infrastructure 23:12 Future Growth of Coinbase 28:14 Understanding Robinhood 38:22 Robinhood Competition 45:42 Robinhood 2021 Crisis Explained 48:14 Robinhood Bank 52:02 Tokenized Stocks & L2 55:32 Defending the Coinbase Moat 1:06:19 Forecasting Robinhood’s Future 1:11:08 Forecasting Coinbase’s Future 1:15:31 Closing & Disclaimers --- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

In this nation, we got a pretty timely debate on the podcast today. Coinbase versus Robin Hood, two competitor companies that are going head to head into the crypto world. Coinbase, of course, the incumbent, the established crypto-native company, but Robin Hood coming right into crypto with pretty big announcements right on the heels of this, right on the heels of this podcast. Maybe to kind of just set the table before I introduce our two contestants here. We got Robin Hood with the ticker hood at 81 billion. at the time of recording. It is up 135% year to date. Hood went public in July of 2021,

which is not too far off from when Coinbase went public in April of that same year. Coinbase compared to Robin Hood's $81 billion is currently coming in at $85 billion, and it is up just 30% year to date. But all of that, 30% increase year to date has just come within the last 30 days.

So while these two competitors, these two financial, aspiring super apps are about the same valuation. There has been a little bit of trajectory difference in order to get here. Taking the side of Coinbase, we have David from Blockworks. David, welcome to the pod.

David, thanks for having me. And then taking the side of Robin Hood, we have Omar from Dragonfly. Omar, also, welcome to the pod. Thank you very much for having me. Okay, so Omar, I have been informed that you are the most bullish person on Robin Hood that a few people on my timeline know.

And then David also, respectively, same thing to you with Coinbase. So we're framing this as a debate because I think you guys all have your domain knowledge in their respective companies. I'm sure your knowledge overlaps.

We're not counting points here. We're not actually trying to go for a winner. We're trying to build a productive conversation. So we, as myself, because I'm curious about this answer, but then also the listeners as well, can kind of just get a download on the nature of these two businesses

because I think who wins or how they win or really just what the future lies for both of these companies will shape what our industry looks like. Like I said, just two days ago, Robin Hood announced their layer two. They launched tokenized stocks and really for the first time putting pressure on Coinbase, at least preliminarily, in order to kind of shape what the future of crypto can look like. My take is that it's nice to have two very strong competitors coming to this market, and we'll kind of suss out what the differences between these companies look like

as any advantages that each one has. David, I want to throw it to you first. We'll start with Coinbase. Maybe you could just start us off by giving us a sort of like lay of the land of the Coinbase company. If you popped up in the hood and you looked at where Coinbase makes its money, where the coin valuation comes from, and future drive. just kind of give us the 101 download that we need to start off with

in order to understand Coinbase as a business. Yeah, for sure. So Coinbase has been around for at least this point 13 plus years. Obviously, it started out as like a Bitcoin Fiat on ramp in the United States. And, you know, over the past few years as it's evolved to a full stack,

you know, I would say on-chain brokerage to various financial services, really the premier U.S.-based exchange in the United States. States and obviously expanding globally today with Coinbase International, Coinbase derivatives. Today, the business generates a majority of the revenue from transaction. Before I introduce our two contestants here, our transaction. We got Robin Hood with a ticker hood at $81 billion at the time of recording.

It is up 135% year-to-date. Good to win public in July of 2021, which is not too far off from when Coinbase went public in April of that same year. Coinbase compared to Robin Hood's $81 billion is currently coming in 85 billion dollars. And it is up just 30% year to date. But all of that 30% increase in the last 30 days. So while these two competitors, these two financial aspiring super apps are about the same valuation, there have been a little bit of 30% in order to 80%. Taking the side of CoinBets, we have David from Blockworks, David, welcome to the past.

partnership of, David, thanks for me. I'd say increasing the floor of how much revenue it can generate through round fare and both cycles. Okay, so Omer, I have been informed that you are the... It is not just a...

Robin Hood that a few people on my time line know. David also... It's really shipped with Circle. It is now becoming, I would say, a full stack infrastructure provider for moving the entire world economy on chain. Over the past year or so, they've launched wallet as a service.

They've launched more recently over the past two, three weeks during their product announcement. They launched crypto as a service and Coinbase business. What I see Coinbase today becoming is instead of just a front end or like a thin front end for the economy coming on chain, it's now becoming like the back end. It's more trying to become like the EWS. They will not win the distribution game compared to tradifying comments or even a Robin Hood coming on chain. what they're trying to be is a B-to-B platform is where I think the company is going forward looking to offer services to help other players come on chain. And they already have pretty mainstream adoption as custody providers for major ETFs.

And they already have over 200 institutions leveraging its crypto-service platform to tap into Coinbase's back in infrastructure to offer a digital asset. We'll start with Coinbase. Maybe you can. Omar, before we get into that same kind of prompt with Robin Hood, what comes to mind when you were listening to David give his kind of like lay of the land for Coinbase? He talked about not really actually going toe to toe with distribution. You talked about kind of being a back end. What stood out to you? Yeah, I think from all David's comments and everything I know about the company, I think what they have managed to do, so much to his point, is build a best in class crypto infrastructure platform that offers a fully end-to-end service. for retail customers and institutions. And like, if that is the framework for the business, I think it is a great point to leverage all of their institutional know-how and all of their tech that they've built into this next

leg of growth for the company, which is going to look materially different than it has the last 10 years. And so I think he encapsulated it really well. And I think they come from a really strong place with a lot of things and a lot of pieces of the puzzle already in place. And now it's just like, what does that go to market look like over the next 10? I'm 15 years. From the crypto side of things,

Coinbase has always had the golden goose of distribution inside of crypto. And I'm hearing both of you kind of agree that Coinbase is more, it's going to keep its retail trading base. It's going to keep its front end on Rams. You know, that's how I get my money into crypto and I need to do that. But it sounds like you guys are both aligned in the nature that Coinbase is going to refocus itself towards less distribution and more towards just kind of, you know, back-end logic, business management,

services towards companies, services towards corporations, and kind of being, being like the on-chain service provider to whatever that means in a variety of different contexts for the pre-existing institutions out there. Would you guys agree with that kind of encapsulation?

What would you change? David, I'll throw it to you. Yeah, I would directionally agree. I think they're going to try to walk and chew gum at the same time. I think they're still going to try to grow their distribution. You know, they already made a vibe

for launching tokenized stocks. I believe I saw something like a couple weeks ago talking to CFTC or the SEC about illegalized in the U.S. I think they're going to try to grow their distribution platform or grow their distribution as like a centralized exchange and like a brokerage or not a brokerage firm. I do think though that the revenue composition of the business forward looking though is largely going to come from this back-end infrastructure service that they're going to

provide for businesses. But I think I'd be bearish if they didn't continue to try to grow their distribution. I just think that it might be an uphill battle compared to the likes of Robin Hood or the JPMorgan's Bank of Americas of the world that are inevitably going to come on chain. Maybe you could shine a little bit more light on that part of the business, David. What does that look like that B2B service? What are some of the products there? What can you say about the margins?

What can you say about the growth? What can you say about really just the aspirations that CoinBiz has in that sector? Yeah, I think it's very early still to know what the margins are going to look like. They just launched crypto service through Scarley's publicly announced it. They came with 200 plus institutions that are using it. What's crypto as a service? What is that? Yeah, so they're going to be offering the ability for fintechs and financial institutions

to offer digital asset trading, custody services, and maybe potential other financial services that they're already messing around with, let's say, like, the morpho, integration with, you know, taking out mortgages or taking out loans through Morpho in the backend. TBD on exactly what that looks like. But at a high level, they're going to be offering digital asset custody trading solutions. So what I imagine is Coinbase is like the backend exchange and then JP Morgan wants to offer digital asset trading for their customers or Morgan's family does.

And what you don't know is like you're trading and you're buying and selling or even custody your Bitcoin or whatever asset on. Morgan Stanley are on that front end, but in the back end, it's actually Coinbase's Exchange Infrastructure, Custody Infrastructure, even payments infrastructure. So they launched Coinbase business, which I think is more of like a mom and pop or, you know, Proof of Sale or POS are offering for merchants. They obviously launch our announcement with Shopify. One of the more interesting things I think that they launched two weeks ago that I think was

under discussed is I think it's called the Coinbase Commerce Program. protocol. Effectly what is, it's like a generalized payment solution that's launched on base. And getting into the more technical details of it, it actually looks like it has an opportunity to distance to media visa and master card where it's going to allow large big box retailers, the Amazon, Walmart's of the world that have these huge ecosystems to effectively become their own credit card issuer. And they're going to be able to tailor their own logic to know how their user base is going

to be allowed to use chargeback. or like different reward systems like four users that are inside their economy or their ecosystem but TLDR it's still very early to know exactly what this looks like but I think that they have the distribution with businesses

that the brand and also like the know-how to know like where where they need to grow their business lines as like an infrastructure player Omar I'm seeing you nod your head what did you like about that what did you agree with give us a little bit more color I think it was all very well sad

I would say, like, just going back to one of the earlier parts with respect to, is it purely going to be an institutional platform? I think to some of the stuff that David spoke about, they're still very much leaning into base as the ecosystem for retail going forward. I do not think that's going away anytime soon. I think they fully intend on building that out based on everything that they've said, all the product launches that they have planned, all the protocols and things that they're incubating over there, it is certainly like a big part of their business going forward. And the other thing I would add is on the stable coin front, USDC distribution is something that is obviously bootstrapped with Coinbase Commerce, what David just talked about. But getting USDC into the pockets of a number of people around the world, leveraging base, leveraging the Coinbase wallet, all of these different pieces of infrastructure that they've built over time is like a big part of their strategy as well. And I think similar to what David said earlier, it's not truly going to be transaction revenue as like the primary monetization vector for the business over time.

There will be this B2B component. There will also be this heavy consumer payments angle. There will also be business payments that go along with it. And then if you tack on base and the whole consumer ecosystem, it starts to give you a better sense of what like the business looks like five years out. And then the last piece I would add would be they're still trying to integrate the whole on-chain economy into the Coinbase platform as well. And you see that with the Dexon.

integrations that they have or that they're working on to integrate all the range of Dex tokens. And I think their view is just to make everything that you can trade on chain, tradable on Coinbase the platform. And like that's what the business ends up looking like in addition to all the B2B stuff over time. The last thing that's kind of the call option on Coinbase is like also Coinbase ventures. They're like one of the largest DC firms in the entire industry. You know, that's very much not discussed today. And like we already see how well Circle did when it IPOed the industry or Wall Street clearly wants crypto equity exposure. I have to imagine a lot of their VC portfolio is based in tokens,

but I'm sure a good amount of it is also in crypto companies that plan on IPOing in the future. So there's a world where like that VC book that other competitors don't have is worth a lot of money over the next five to 10 years. Yeah, I guess it's hard to ask you to give evaluation on what is fundamentally a VC portfolios, like, really can't really do that. But if you had to do that to compare that to coinbases, like revenue, how do you compare apples to oranges here if we're trying to compare sizes? Yeah, I mean, I would not actually, I don't know, Omar, you might be more versed in that subject, but I, no, to your point, there hasn't been enough disclosure around, like, the size of their

holdings and what they're marked at to, like, really have a good sense. Like, we all have a good idea on the names that are in there, but we have no idea the amount of money. And so, so it's really hard. We don't know how much they raised. My understanding was that it's all balance you capital, but I don't know if there's any external LPs. I'm not sure. So I don't believe there is, but I don't think that they're even publicly disclosed. Okay, so it's a true dark horse. So maybe we could just like fairly guess somewhere in $100 million of like total investment into this thing. I think we're just kind of like blindly throwing darts here. It seems maybe around there. And then, in the optimistic scenario.

You know, you get a 10x, 15x, 20x over the longest of terms, it starts to come in at like one to two billion. These are just my rough napkin math. Maybe Omar, you would disagree. But if it's a one or two billion dollar valuation, I don't think that's moving the needle too much on what is currently an $85 billion valuation on coin stock. That's my logic.

Omar, check me on that. Yeah, no, I think that sounds like reasonable. I'm sure if we dug around the financials, We could see what they haven't booked at in like some of the disclosure there. So, but, you know, off the top of my head saying that it's between like worth one to five billion somewhere in that wheelhouse, depending. That's probably high, to be quite honest. Like probably skews closer to a billion. But yeah, I mean, sounds reasonable.

Yeah, unclear to me, to be honest. So I'm not true. We'll treat that as a cherry on top. Let me go back to kind of the back. end infrastructure angle and then we'll turn to Omar to lead the Robin Hood section. It sounds to me that like Coinbase is packaging up their, their strategy is to package up their software, package up their exchange, package up there, you know, I don't know if this is right, but USDC on base as a visa competitor along with some of that logic and really, you know,

start duplicating some of the efforts that they have already made building Coinbase in the first place and then, you know, allowing fidelity to like slot that right into the back end of their brokerage or really any sort of entity who's like, oh, you know, crypto's real. We are, we now need to serve crypto to our clients. Do we need to build an exchange or can we just like hook in some, I don't know, SDK. I don't know if that's the right technical term, but just like allow some sort of integration of what is effectively the coin based back end, but it's whitelisted for fidelity customers or TD Ameritrade customers. And that's a very good distribution strategy as I understand it. Rather than going like in the trenches,

going individual customer by individual customer, they're just going to brokerages and getting all of their customers in at once. I would imagine they're charging those customers lower fees in order to make that work. But on an aggregate basis, when you add everything together, then if you just acquire all of the trading

demand of every single brokerage that integrates Coinbase in the back end and their software products, sounds like a pretty strong arena of growth to me. David, check me on that. Yeah, I agree. I mean, I think maybe not one-to-one. parallel, but looking at

AWS business, it's extremely high margin. Amazon built AWS, larger for their internal purposes in the early 2000s, and they realized, like, look, like every startup in the world, every business in the world is not going to want to have their own on-prem server or on-prem compute.

And why not try, like, white label it or why not try to offer that as a service? And I think the same could be said for, you know, back in infrastructure for crypto. Yeah, some firms will want to bring that in-house. I imagine maybe Robin Hood might be one of those folks I want to do that because they have the chops to do it. Maybe some fintech and traffic firms might want to bring that in house as well. But I think a large majority of businesses that want to come on chain will not.

They will outsource that because it's cheaper. They don't have the technical experience. And the reality is like, casting crypto is extremely risky. Like, right? Like even the larger centralized exchanges in the world have gotten hacked before, I'll like buy it and other centralized exchanges and other like major protocols before. CoinMace has proven that they have like a trusted and secure brand. Security as a crypto business has been operating for 12, 13 plus years.

And they know what the friction points are because they have themselves been moving more on chain as a business over the past decade. And I think they know exactly what the innate pain points are to offer a really nice package service

to other companies in the future. So I have to imagine long-term it's going to be a very high margin of business. But yeah, I think it's akin to AWS, maybe not exact powerless, but that's how I have my mental framework for. So Coinbase to me, like a thesis for Coinbase, if I can sum it up in one sentence, is the entire world moving on chain. Like, it is the pure play of the on-chain economy growing. Yeah, I also enjoy the notion of if Coinbase is integrating things like Morpho or Dex aggregation directly in their front end. Well, that too can also get packaged up, put in a piece of software,

integrated into TDMA trade. And if it's providing a value to, like, to Coinbase's customers, then it can also, you know, provide a value to, you know, any generalized brokerage that integrates Coinbase. And then a Coinbase just becomes a conduit for, you know, tradfi customers and assets and logic to, you know, touch the chain pretty seamlessly with that Coinbase brand. Okay, so that's, I feel like this conversation is pretty young in the Coinbase world.

Like, there's starting to be some brewing conversations about it, but like there's a lot of work to be done. it's a big sector of growth that Coinbase is just at the starting line for. I feel like we've covered that pretty well. There's other parts of Coinbase growth there. Go ahead, Amo. What do you want to say? No, the only thing I would add to the Coinbase infrastructure plan is like, similar to what we

discussed, there's always this option, which is like buy versus build. And a lot of the time companies don't want to build this stuff internally because they don't have the expertise. You end up having to hire. You end up having to go outside the organization, bring the talent in-house. And then ultimately you end up trying to build a product. You have to test that product. And that's like a whole time lag, especially when crypto is relatively time sensitive today.

And so a lot of companies do want to outsource this and use an infrastructure provider. That being said, I think one of the big challenges for Coinbase with this play, and not to push back on it. But I do think that there is an inherent tension between Coinbase's retail business and this exchange infrastructure as a service. business because ultimately the profits that they do make from the exchange as a business, exchange as a service business end up going back to funding their operations, which then they use to fund incentives to then try and bring customers into the retail sign of their business and get them onto base and the whole range of transaction activity. And so, you know, some potential customers of Coinbase or even Crackett's institutional offering, they definitely

think twice, I would say, about who they're going to give their business to. And we've kind of seen some of the infrastructure providers, whether it's on the staking side or the custody side, go and pitch directly as opposed to getting the bundle from an exchange itself, who they're going to compete with for those same customers. So that's the only thing I'd say in unlike the things to just think about for anyone that's looking at that side of the business, because there is attention. And Coinbase does compete with all of these platforms. Like, they might hopefully should. It's one of the highest margin parts of their business for those customers. Uniswap is your gateway to a more efficient defy experience. With uniswap swapping and bridging

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Check its terms for more information. So, David, we could talk about USDC income into Coinbase. We could talk about base on-chain revenues. In terms of just like kind of understanding the future growth of Coinbase, I feel like we've laid down the, you know, back end to TradFi thesis pretty well. What's worth adding to that list of growth venues? for Coinbase before we wrap up the Coinbase out of this conversation? I mean, they're making

60% of U.S. of Circles' revenue, right? And like, it's still very early. It's very early days for stable coins. How locked in is that? Is that just a permanent part of the Circle deal? Is that going anywhere? I believe, and I might be misspeaking slightly, but I

believe that it is subject, it is up for renewal at the end of 2026, but Coinbase pretty much has say in any material changes to the contract. So, for example, that partnership Circle did with Binance to hold, I think they had to hold like one billion USDC on Binance's value sheet, and then they had like a revenue share agreement with Binance. Circle had to go to Coinbase to get their approval in order to allow that to happen.

Obviously, that's in the contract, that's in the terms of like this current contract. But my understanding is, like, it's effectively perpetual contract, but there is room for negotiation at the end of 2026. Again, it might be misspeaking there slightly, but I think the power is definitely in Coinbase's hand. So, look, it's very early days for Stablecoins. That is not to say the stable coins of today are going to be the stable coins of tomorrow. Obviously, we probably talk about, like, Global U.S.D, which is Robin Hood's consortium, stable coin. We can talk about PayPal USD and even J.P. Morgan trying to token. deposits on base and what have you.

Every fintech company or every bank that is anyone will try to get into the stable coin game. And over time, that will be a low margin. We're a highly competitive business. But Circle is the largest regulated U.S. stable coin in the U.S. economy today. And I don't see that changing anytime soon. And if anything, stable coin and USDC market cap is probably going to 10x over the next two to three years. I'd be surprised if it didn't.

And even with future rate cuts like that, is going to be a large, a material revenue driver for Coinbase. So, you know, that's also, I think, like a major thing that I think everyone has already baked into,

you know, maybe not to the valuation today, but everything that are cognizant of that revenue share agreement. And it's just like, it's a really stable, I think, income stream for them to continue to, you know,

build out base, build out their trading infrastructure, build out their coin base, their crypto is a service offering. As I understand it, circle pays, the operating expenses after Coinbase takes their 50% cut.

So like Coinbase feels like they got a really sweet deal taking a lot of, it's all profit for Coinbase and they don't have to pay for any of the employees or any of the anything else. That's my understanding. Is that correct? I believe that's correct.

I mean, they definitely, they max extracted on that one, for sure. Yeah. Yeah, like the rough calculation is Coinbase gets all of the interest income of USDC held on their platform and then it's a 50-50 split on the rest.

On the rest. They get 100% of everything that's on their platform and 50% of the rest. That is a sweet deal. Yeah. It's like the rough calculation. There's nuances to like where USDC's held and Circle has a portion that they retain on their own, but it's relatively small.

But that's the mental model for how to think about it. And it was funny because at one point, Circle had flipped Coinbase last week, which is counterintuitive when one company makes more off the product than the other does. Right. That is. But the market has corrected. right right David there's a base revenue from from transaction fees they coinbase is a bitcoin custodian any last subjects that are worth touching on for sources of future coin base revenue

yeah I mean I think there's so many different um there's so many different revenue streams that are non material today that will you know I think will be in the future base revenue obviously being being one of them um but I think if the listeners today we're going to take away something I think it's look, they have a high stable revenue stream come from stable coin rewards with their partnership with Circle. They make a material amount of their revenue from trading fees. I don't see those two changing for the foreseeable future. But there's all these other things,

largely their infrastructure as a service offering for, you know, the non-chain economy growing or bringing on fintechs and traditional banks and non-chain economy. That, I think, is going to be just a more material portion of their revenue over the next three to five years, and I think will, over time, become the majority of their revenue, if my thesis is correct.

So that's a yes. But yeah, there's a bunch of other service lines that are not staking rewards, right? Like, they're the largest institutional staker in the entire industry at this point. I couldn't even tell you how many tens of billions of dollars they have under their management. Yeah, as I really understand all of this revenue sources,

it doesn't seem that competitive with Robin Hood. It seems pretty differentiated. as a product line. Now I think we can kind of extrapolate into the future and be like, yeah, eventually these two giants will like butt up against each other. As it stands today, it feels like the product lines and where they get their revenue are pretty

like at harmony, at peace with each other and not actually going toe to toe. That's my understanding. Omar, check me on that take. Yeah, you're right. But I'm happy to go into it whenever or when we talk about Robin Hood. Yeah, let's do it. Yeah. So give us that same kind of lay of the land. What's the current state of Robin Hood? Where do they get their money

from? And then we'll touch on vehicles for growth. Yeah, maybe just like going back in time to kick it off. Sure. So Robin had a similar point in time to Coinbase back in 2013, and it was founded by Vlad Tenev and Badjubat. And they both had met at Stanford. And initially they were working on HFT software

that they were selling institutions over time that ended up pivoting, and they ended up building a retail first platform. And they had like two key insights that had driven a lot of their decision making at that time. They were of the view that the world was going to be mobile and that retail users didn't want to pay fees. And that was the core premise of the business at the time, which was we are going to build a really slick, intuitive user interface

that people can use to trade on their phones. They can get all of the relevant information and they don't need to pay fees. And the world's youngest generation, which is like a big part of the Robin Hood story, this is going to be the way they live. Everything will be mobile first and native. And that is what they want to do.

And so the Robinette stories started back then. And over time, it has just been a compounding growth story in terms of users. And so, like, if you rewind the clock a little bit, if you go back to like 2017, they had two million users. If you go up to like 2020, they had 12.5 million funded accounts. And then if you go to today, it's a business that has like 26 million users. And for context, the U.S. population is roughly 340 million people. And so they're just like under 10% of the U.S.

But it has been like a story that has been built on the back of like, what does the next generation of investing products look like? And that's the way they started and that's the way they built their business over time. And as Robin Hood today, so the way to think about it is there's $256 billion of assets on the platform across these 26 million roughly funded accounts, which means there's roughly $10,000 balance per account on the platform is a very simple way to think about it. The platform itself does like $3 billion of revenue. And the bulk of that, so like half of it, comes from transaction-based revenue.

And then the vast majority of the rest comes from interest income. Now, like, interest income isn't to be construed the exact same way as it is with USDC, but it tends to be the large chunk of that is margin-based interest. Then there's some cash sweep. there's a range of other interest products, but largely Robin Hood operates off of a trading fee-based model, which they, similar to Coinbase, are trying to diversify over time. And I think for the listeners that aren't that familiar with the story, the big thing that they did to have no trading fees directly was a concept called Payment for Order Flow.

And what Payment for Order Flow is, is market makers will pay you for price and sensitive flow effectively, which is I'm a retail order. I put in order by one Bitcoin. They give me a quote and they will pay me for that quote. They'll go execute it and they'll execute it across a range of different venues. And there tends to be a spread in there, which is why they're paying you for that flow. And Robin Hood gets a portion of that. Robin Hood gets what they are paid for that flow. And so like that's kind of how the business model works, which is payment for flow and that's how they make their revenue. So unlike Coinbase, which is a direct fee, Then it gets executed on the back end.

It's just slightly different, but there's still a revenue model associated with it. And so that's like roughly what like the business looks like today. And if you were to just like kind of break out, okay, like of their transaction brace revenues, like where does crypto fit into this whole piece of the pie? Today, half of their business, effectively is options with, you know, if you look back to 2024, it's like $760 million. think is the number. And then if you look at crypto, crypto, crypto $630 million roughly. And then if you look at traditional equities, just like buying Nvidia or SpaceX or Tesla, that's 177 million. And so, like, that's the way to kind of think about the business. Historically, crypto has been like relatively small. Like, if you go back to 2019, I believe they made like $10 million off of

crypto. And so like the crypto story has been a relatively new in the broader Robin Hood story vector for growth. And it's been something that they've leaned into really, really heavily in recent years. But the Robin Hood story for most people out there has been one of traditional financial products. And I think like that's probably the easiest way to think about Robin Hood's revenues and broad business today. But there's like, there's like, a huge other component, which is like part of my like whole thesis on the business, which I'm happy to get into. But I'll just like pause there. We talk about it. And I think that was great. I want to talk about the two big events that Robin Hood has had this year. The one just

happened to catch a token. That was a crypto event. And then maybe three months ago, they did more of a like a traditional finance event where they introduced Robin Hood banking, the Robin Hood credit card. So that's kind of like they're more, you know, more, you know, tradfi, not crypto, but. you know, retail forward, you know, retail banking and trying to, it looks like, become a full stack financial company. I'm guessing if we're going to talk about venues for growth in Robin Hood, they're going to come from these two announcements, which is like very convenient that we have these two announcements to talk about.

So I'll throw it back to you and give us your broad thesis and then we'll go into those individual announcements. Yeah, so like my thesis on it is Robin Hood is building the multi-generational financial super app for our generation. And they were brilliant in the sense that they went after the youngest cohort of customers with their initial product back in 2013. And if you like just think about it, 10 years ago or 12 years ago, all of us were much younger. And, you know, we probably had a lot less money. And, you know, we were probably starting out our careers.

And they went right after this cohort of customers. That was young didn't want to pay fees, but was on their phone. And over the last 12 years, they managed to grow with them. And at the same time, they've added cohorts sequentially of younger and younger and younger customers. And if you look at the population of Robin Hood's customer base, 75% is under the age of 44, roughly. And so, like, you have this platform that skews really young, that's really active on their phones, and that trades lock. And what does this generation want to do? They want to do everything off their funds. I don't want to go into a bank branch. I don't want to go deposit checks

at the teller. I don't want to go to an ATM to pull out count. I want to literally do everything from my phone. And so Vlad, what he's trying to build is like stage one, Robin Hood was like, I'm going to build like this great active trading platform, which they continue to do and we can talk about. But like the next arc for Robin Hood is like the all in one super app for your everyday needs. And similar to what David mentioned earlier, it's like this is where Robin Hood gold comes in. And for people that aren't familiar, that's their subscription program. And through Robin Hood gold and they have a Robin Hood gold card, what this allows you do is, is use Robin Hood for your day-to-day spending,

and that comes with a 3% cash-back, which can be redeemed in the app. It allows you to get matches on retirement accounts. It allows you to get a cash sweep in your Robin Hood account. It allows you to have margin interest production fees, all kinds of different benefits that they are enveloping into a full-stack financial services platform that covers your day-to-day needs.

And so whether you want to spend day-to-day at Chipotle, whether you want to deposit money in the bank, which you'll be able to do over time through their bank partners, whether you want to trade equities like Tesla or the ad like Tesla or invidia or what have you, you can do that directly on the platform, whether you want to buy crypto, you can do that directly through the platform as well. If you want to punt out options, you can do that. Now they've obviously integrated contract markets.

And so if you want to have Robin Hood prediction market offerings, like you can do that directly through Robin Hood as well. And so like you can kind of see the whole Robin Hood story. which is I'm going to grow with this cohort of customers. They're going to get richer and wealthier over time. And I'm going to sandwich them with the full range of financial products so that they don't need to go anywhere else. They can use me for literally everything.

And I think that is like the part of the product that I or the part of the business that I'm like the most bullish on because like I see it with everyone my age. I see it with people under a younger me and even some of the people that are older. It's just everyone wants consolidation. I don't want to use a credit card from Mmex. I don't want to bank with Chase. I don't want to do all of these things across all of these different places and have 10 different accounts.

I want everything to be mobile first and tailored and optimized to the way I conduct my day-to-day life with like extremely limited friction. And Robin Hood is certainly going in that direction. And I think when you think about the crypto part of the business, that's where it fits in. It's like our generation is younger. We recognize the importance of crypto, how big of a role it's going to play in society. and it's a great way for them to continue to sandwich these users

with the full stack of financial service offerings. But I will pause there. I've gone on for a little bit, but yeah, we can talk about anything. I think it was beautifully articulated. I re-downloaded Robin Hood. I initially got into investing,

like I think many people here, through Robin Hood, even before crypto, like right out of college for me. It was like two years before I got into crypto and I was owning like semiconductors. I was owning like two X long semiconductors, because I really like risk. then I left Robin Hood because I got into crypto,

and so I didn't touch Robin Hood for years. But then it was some time during like the last bear market in 2022, 2022, 23, and we were all looking at coin at like $30. And I was like, well, you know what? I'm going to buy some coin. And so I redownloaded Robin Hood for the first time. And that's where I got my first coin shares. And in that process, I was thinking, oh, where do I even go to buy equities?

Oh, yeah, I can download Robin Hood. And I was thinking in that moment, if it wasn't Robin Hood, where else would I go? And I thought, like, yeah, I guess I could do a TD Ameritrade. I could do a fidelity. But, like, that just doesn't feel right at all. That just feels so boomer. So, like, Omar, the question is, like, who is Robin Hood's competition? I know there's pre-established brokerages that already have their base, but I couldn't think of a single alternative that was, like, interesting to me as a millennial who just wanted a base.

exposure to spot stocks. Yeah. I mean, like it looks like all of the people that you know, which is the Fidelity of the world, the E-Trades of the world, the Ameritrades of the world, and IBKRs of the world. Like every traditional broker is kind of who they're competing against, but our generation kind of has this tech-first approach, I would say. It's like we want something that's super simple, easy, not hard to onboard onto, which Robin Hood abstracts so much of the pain to let. And then once you're on there, you want it to be super simple. And, and like relatively few clicks before you're buying an equity.

And so like all of the traditional brokers is who they are competing against is the way I think about, especially in the U.S. And, you know, they compete against the banks more directly on like where they're going with the business today. But all of the boomer products that you can think of is who they compete with. Right. And I can't imagine any of them are innovating or growing nearly at the rate of speed that Robin Hood is. Yeah, this plays into the other.

into David's thesis, which is the exchange infrastructure as a service play on Gwembes, which is like everyone recognizes what's going on. And they're like, okay, I need to provide these customers

with the full range of financial services offerings. Crypto is certainly one of them. And so like, how do I get that into my platform so I don't lose them to Robin Hood? And, you know,

it's exactly the reason we've seen Robin Hood's accounts grow from 2 million, 2017 to 26 million today. It's just like people are looking for somewhere to do everything in one place. And Robin Hood is arguably one of the best places to do that.

David, when you hear Omar's thesis about Robin Hood, what do you like, anything you disagree with, anything that you think Coinbase can actually like push up against Robin Hood with their, you know, future aspirations. I love Robin Hood. Like, I'm a user. I'm a car user up there. Like, I know it's like a coin bull here, but like Robin Hood,

Robin Hood's a great company. It is a masterclass on like product strategy. And just their, their product team is, Like every single Web 2, Web 3 company should be trying to post them because it's a beautiful app. It's so easy to use. It's simple. My first foray into investing very much like yourself, David, I'm sure Omar as well maybe, was like downloading Robin Hood back in like early 20 or like mid 2014, 2015, like right at

college and just mess around options. Like it was just so simple as someone that like did not do like any prior investing prior to that like in my college days. It was investing for dummies. And they made it so simple. But they have obviously large aspirations. And they've done a killer job with their product. They've done a great job with Robin Hood gold.

I think what Coinbase can learn from is product first. I don't love Coinbase's major app main app. It is clunky. I would argue that maybe it's gotten a little better over the past year or so. But it does not have. have a cohesive, it doesn't feel like a mobile first app, even though like it, it probably is. But it doesn't feel like it. I can't easily buy and sell assets in like the same like user interface that I'm used to or custom

to with Robin Hood. I think Koimi is going to learn a lot from like the product and new user experience side. But I mean, I largely agree with everything Omar said. Like they are the. they're the millennial Gen Z and future generational JP Morgan, Bank of America, Morgan Stanley. They're killing it. And I think what Coinbase,

I don't know if Coinbase has the product chops candidly to be able to compete with Robin Hood in that arena. But I think they do have the chops to do and the expertise on is like everything in the back end. Don't get me wrong, they should absolutely still go toe to toe to with Robin Hood becoming a financial super app. And I think they're obviously trying to make strides in that. that. They see obviously the future of subscription, you know, subscriptions like Gen Z's

Monuments love paying for subscriptions. So they launch Coinbase 1 where you get like pretty much free training on the app. You obviously can now get the Coinbase credit card, which is like very similar to a Rob-Hood, they're Rob-Hood gold. So they're definitely converging on the same offering for retail and like B-to-C strategy. But I think where Coinbase is differentiating is obviously more on the B-to-B side. Yeah, maybe just like one of the things I want to add for like the listeners is that is on the Robin Hood side in 21 there was like an existential crisis for the business. And I'm sure many people that are listening probably remember it, but the whole GameStop saga. And I think one of the things, and to draw a parallel back to crypto maybe, is the Maple and Oilers stories of this year, which have been like two incredible comeback stories.

Robin Hood just had like its own version of that in 2021. People hated Ronald. And if you went on to Wall Street Bats on Reddit and you went and like checked out any of the comments, people were seething at flat. They despised it. And I think there is certainly something to be said for the businesses that can survive existential crises, rebuild and come back stronger than ever. and at the same time, have their customers be some of their loudest supporters and sources of referrals.

And like, if we look back in the history of time, I do think like Robin Hood's 21 crash will be look back at as one of the defining moments in its history, which is like it survived what could have been like the end of the business. And it came back stronger than ever with an reinvigorated product strategy

that changed the arc of like what this business is going to look like for the next 10, 15 years. And so I think it's like worth noting that just because like resilient management teams as an indicator for good businesses, you don't necessarily see that too often. And so I think it's worth just noting. Yeah, I'd actually like to learn a little bit more about that because to this day, Robin Hood's brand still has echoes of that GameStop event. Like when I posted the recent interview with flat, I did, I had like a, I mean, you get reply guys on Twitter of all shapes and sizes.

so there shouldn't be any sort of a particular surprise to anyone, but somebody was like, oh, Vlad's corrupt because they yoinks the cell button non-game stop. And so, you know, there's some leftover notes left from that PR crisis back in 2021. Now that we have like four years of hindsight behind us, I don't really know the true details of what happened. The accusation towards Robin Hood was that they yointed the cell button because the guy from Citadel called them up.

and it was like, hey, or no, there was the buy button. They're going to the buy button because the guy from Siddle called him up and it was corruption. And then there was like a rebuttal from Robin Hood that I don't really remember the nuances, but there was like a seemingly just like perfectly valid explanation for this that no one really wanted to hear. That's my understanding. I'm probably, I think listeners are about probably where I am. Omar, do you have any more clarity about like what happened and if like Robin Hood was like vindicated or not or maybe there was corruption? I don't really know the details.

What can you say? Yeah, you're pushing the limits of my recall. But I would say that my understanding still is with all of the GameStop GameStop volatility, Robin Hood had to come up with tens of billions of dollars, if I'm not mistaken, to post with the DTCC, if I'm not mistaken. And like, they did not have access to that amount of money at the time. And so what they ultimately end up having to do was just restrict trading. And it was largely a function of the regulators requiring them to post capital as opposed to anything like nefarious on their end.

And obviously like that impacted retail the most. And a lot of people that were bidding on the run up didn't have the ability to sell the stock because of like these crazy capital capital requirements that Robin had to come up with. And so just turned into a PR nightmare. which ultimately end up being like, oh, Robin Hood is going after me. And their hands were tied. And there wasn't really anything they could do. I think the messaging could have been much better and they could have been much clearer at the time if I'm, you know, recalling everything perfectly.

But yeah, it was a function of capital requirements as opposed to anything nefarious. Right. Right. Yeah. That's my loose understanding as well. One thing I want to touch on because this will start to bring up some pretty good comparing and contrasting between Robin Hood and. Coinbase's Robin Hood's announced

a banking platform that is coming, I think, in like Q3 or Q4 of this year, they are just announcing the fact that they can become a bank. And so retail customers can just deposit money

in the Robin Hood banking platform, which you would think has a very thin wall between their brokerage equity stock platform. Something that Coinbase does not have because Coinbase still has banking partners that it needs to bank with. Robin Hood itself is a bank.

What kind of advantages is, does Robin Hood being a bank give Robin Hood over Coinbase, or is that not really much of one? My understanding is that they're not actually going to become a bank. They're going to use bank and partners. I could be mistaken, but

even if you look at their card guard, they're using coastal. If they become a bank, there's just a lot, first off, it takes a lot of time, and second, there's a lot more regulation from a capital perspective. Now you have various amounts of capital that you have to post across different tiers to maintain

years down as with the OCC and all of the different bank regulators that there are in the U.S. And so Robino doesn't want to do that, but they want to become a financial technology company. And I'm sure at some point down the road, they will arguably try and become a bank. But today, from my understanding, their strategy is to become a bank service provider. And like the way you can kind of see it, even on the mortgage side, they're not the one providing the mortgage directly. They're sourcing mortgage rate for you to then switch your mortgage over, which then they get paid for versus underwriting every single new mortgage application on the platform.

Okay, so they are still more operating as a portal. They're a front end for a different bank that they are just managing for users. Okay, that makes more sense. In the wild west of Defi, stability and innovation are everything, which is why you should check out Frax Finance. The protocol revolutionizing stable coins, defy, and Rolex. The core of Frax Finance is FraxUSD, which is backed by BlackRock's institutional biddle fund.

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perhaps since the Bitcoin ETF, I can't really think of another thing that was more exciting, more new for crypto since that. Coinbase, maybe two or three weeks ago, filed some request with the SEC for a regulatory sandbox for tokenized stock, so you know Coinbase is eyeing this as well.

Robin Hood, I mean, it's just an announcement, but you can kind of see Robin Hood beating Coinbase to the punch in tokenized stocks. And then also the tokenized private equities like SpaceX and OpenAI, I think, is extremely exciting to people, only available for EU citizens because of compliance. But nonetheless, you are now seeing Robin Hood chain being announced, which, of course, goes up toe to toe against base.

Both Coinbase and Robin Hood want to produce tokenized stocks for the crypto world. And so we are now seeing at least some of the spheres of influence butt up right against each other. Omar, when you saw this announcement from Robin Hood just earlier this week, what were your first initial thoughts? Yeah, I think, you know, Vlad's kind of teased the announcement over the last, I'd say, six, 12 months. And so you had a decent sense that it was coming. No one had any particularly great insight into what it was actually going to look like.

But when it was announced, it made perfect sense. I'd say, like, the important thing to understand or think about with respect to Robin Hood, and it's slightly different relative to Coinbase. but Robin Hood wants to be this place that allows our generation to trade everything. And so if you think about it through that lens, like having an on-change strategy is like critically important, right? Because like now you can have this liquid playground for a bunch of people to trade a range of different stocks, securities, non-securities,

and everything that you can kind of imagine under the sun. And like what better way for them to do that than have. their own chain. And like in the traditional financial world, trades get routed to the range of traditional venues or liquidity providers. But here, this now allows them to be their own venue. And it's kind of an alternative take on like what the world looks like, whereas Robin Hood was facilitating access to the traditional financial world. They're almost building the infrastructure for the new world. And I think like it's important to understand when you think about the business as a whole. Because if you look at like their long-term arc and you like go and you read and

you listen to them speak about it, phase one of the business is be this active trader platform. Phase two is like the all in one neo bank platform, which is like all of your financial services needs. And phase three is like the world's financial infrastructure. And so if you think about it through that lens, this is like a perfect piece to add into their product strategy, which allows them to offer like tokenized equities. It allows them to like use that as an infrastructure for the range of foreign markets that they're going to enter into two over time. It allows them to offer a range of things like private stocks again, which people can't trade. It'll allow them to do private real estate over time. Like a whole bunch of different products. Now you have the flexibility to do

in an environment which you control as opposed to going and trying to back into the traditional financial system and working with the range of players. David, from the coin base side of things, what do you think was going through Coinbase's head when they saw this announcement? I'm sure that they thought that this was inevitable, but now they have a moat to defend, right? You know, base, you know, pre-existing ecosystem, Robin Hood just, Robin Hood changed as an announcement. And so, you know, already has a huge head start. But you can see, like, Coinbase's, like, you know, biggest rival in this base start to appear. So what does Coinbase need to do to defend its moat?

What do you think its next steps need to be? Yeah, I mean, I think that Coinbase's, you know, This is still largely the premier U.S.-based crypto exchange. And they're obviously trying to expand internationally. Obviously, Robin Hood is starting largely with international, largely EU markets for its crypto strategy, which makes sense given the regulatory environment there. I think that they're thinking, like we have to be first over advantage to all U.S.-based crypto products in order to continue on.

If they're going to try to tackle Robin Hood against the B2C vertical. They're launching U.S. perps in, I think, July 21st, so two and a half, three weeks from now. Their hope, I'm guessing, is like similar to what Robin Hood did for options, right? They made options easy for our generation for high beta chasing risk on customers and like perps of the next evolution of, you know, pretty much options for crypto natives. And they're trying to introduce perps to the U.S. capital markets, the retail base for them. So I don't know why Robinton hasn't announced U.S. perps yet.

Obviously, it's not a regulatory thing. Maybe it's because the acquisition of Derbit for Coinbase effectively allowed them to do this. And they're not effectively perpetual futures. They're actually just like long-dated options to have like a five-year expiry, but who really holds perps for five-year straight? So I think Coinbase is thinking a few things. It's one, we have to grow U.S. perps like ASAP. That could be a material revenue driver for the business if they succeed.

We already know how much like Binance, for example, I think 90% of their entire trading volume is perps compared to Spot and it's like a large revenue driver for Binance and other offshore centralized exchanges. I'm unsure how worried they are about Robinet Chain. They should be worried. But if history repeats itself, like other centralized exchanges or with large distribution, large customer bases have not done that well launching their own L2 or their own L1. BNB may be the exception given like they're the 900 pound gorilla in the room.

They have a 100 million plus global U.S. base. But like if you look at every other Centralized Exchange so far, like haven't done that well launching their own L2. By bit, I think they've reported they have a 60 million global user base. That is significantly larger than what Robinette has. Has anyone used Mantle? I haven't. They're now launching on Solana with their own, like, you know, decks.

Has anyone used ink? Nothing against Cracken. I think they're a great exchange. I am a customer of theirs as well. But, like, I haven't used ink. And now they're launching token I stocks on Solana. World chain. Like, not the exact same thing, but like world chain has also found a limited traction.

Coinbase has a crypto-first culture. They have the brand. And I think it's going to be very hard to unseat Coinbase as a L2 or as your own execution environment. But if any team is going to beat them, it could be Robin Hood because of their operational excellence and just their ability to execute. But I think obviously they're probably worried about their international expansion plans like Robin Hood going into the EU is obviously like a risk for them. Coinbase's international observatives platform has, like, grown decent amount over the past, you know, six or so months. I think they recently hit over 10 billion oh I could be mistaken there.

But it has seen like some like really well good growth over the past, you know, I guess the either date. I'm not personally familiar with how strong Robin Hood's brand is in the EU. I think that will be a very interesting to see in the coming quarters on their earnings report, like how well is their international expansion plans growing? Coinbase hasn't done exceptionally well on that front. And I don't know if that's an execution problem or the fact that like finance and all these other offshore exchanges just have like such a moat and finance themselves in their

own right are trying to build their own super app. And they have again, a order of magnitude maybe of more users than Robin Hood does. And they have shown their ability to execute over the past few years. But yeah, if I'm Coinbase, first thing. I'm thinking about is make US perps like the go-to venue for high beta chasing retail users. Like that should be the product that can potentially absorb or take users away from Robinhood. Yeah, I'll stop for now and see what you guys' thoughts are. Omar, rebuttal thoughts, arguments, what comes to mind?

No, I think that is one of the coin-based strengths, which is like it is a crypto-first brand and a crypto-native company. And because of that, they have like a range of different advantages that they can play in when Robin Hood starts encroaching on their territory. I think, you know, if I was to articulate like the bull case for Robin Hood is on the crypto side today anyways, I think like it's like a fee story largely, which is like Coinbase still charges like 1.4% roughly on retail trading volume. And Hood comes in at like 40 basis points. It's just like materially cheaper to trade crypto on Robin Hood. But at the same time, like, I'm here in New York. And if I go into the Robin Hood app and I try and buy crypto, there's like 22 tokens I can buy, or roughly that number.

Whereas if I go to Coinbase, I can buy 200 plus tokens. And I think like this crypto nativity and the willingness to take risk is like what really does allow Coinbase to build out its product offering customer base, user base, and like retain customers, relative to. to, you know, a challenger that's entering into its space and trying to poach its customers on the retail side. And so, like, I largely agree with everything David said. Like, they do shouldn't lean into perps. It is a great product. Robina doesn't offer them yet. I'm sure they will at some point. Providence is doing it out of Europe and, like, Lemberg just capped at 3x. But, you know, it's still like a very nascent battleground, which Coinbase has like a really,

really good advantage in. And so, like, they should just, like, push on the gas if I were them. Yeah, I think also a story for both companies, especially like with Robin Hood launching Robin Hood chain, it's going to be what does that take rate look like over time? So Coinbase is obviously trying to, in a way, disintermediate its largest revenue driver, which is transaction revenue. Like, I think it's mixed take rate is approximately 30-bibs between the retail and the institutional user. Obviously, retail gets absolutely fleeced, but it's the greatest business in the world. But if you look at base, right, and they're obviously trying to, they're going to be enshrining, I guess, all the just all the assets launched on base onto their front end on the

point base main app and eventually go after other assets on our ecosystems. The take rate, so if you look at like bases, dex volumes as a function of its sequencer revenue, it's an order magnitude less. So they have a 30-bibs take rate on centralized exchange. front end, base gets approximately a three-bips take rate. And I think they're thinking is we're going to move more on-chain, the lower take rate, no other centralized exchange or no other traditional financial company can compete with us if we can offer a three-bips take rate. But they're going to take like maybe the Solano approach, which is like low fees,

high throughput equals more REV, more revenue, whatever you want to call it. And I'm curious to see what Robin Hood's transaction revenue is going to be. as more of its trading does move on chain, is it going to be a similar take rate, probably. Another thing that I think about when I think about Robin Hood's businesses, you called out earlier, Omar, which is payment for order flow. The EU has banned payment for order flow as of the end of 2026. So what does that revenue model look like in the EU? And obviously, US, it's still legal today.

We'll be legal tomorrow, probably. We have probably like a more progressive regulatory environment in that sense. but it will be interesting to see how well Robin Hood does international waters. Again, I don't know what the brand is internationally. I have a tough time believing that anyone that is using an offshore centralized exchange today will move to Robin Hood because Bybit, Binance, OkX, objectively offer great products for crypto users. But again, Robin Hood is a behemoth and really does have really strong execution

and operational excellence. So maybe they can take users from those players. Yeah, the only thing I'd add to this is like on the Robin Hood side, if you like listen to Vlad talk about, you know, Robin Hood chain, I think one of the things that he said recently is like he's going to focus on having an active developer ecosystem. And so like, that's Robin Hood very much coming into Coinbase's territory. And like, obviously Jesse's done a great job.

And like they have really built out that ecosystem. And so like there are going to be. challenges for Robin Hood as they move on chain. And I know I'm the Robin Hood bull here. I'm not trying to give too much of the bear case. But it will be a challenge for the business. And they have 10 different business lines that roughly do $100 million plus each. And so they have a lot of shovels in the fire and lots of things that they are trying to do to build out that business across a range of vectors. And going to be Coinbase on its own game is really, really hard. And so, you know, there are things to, like, keep in mind and be careful of and just watch out for as Robin Hood expands to this on-chain ecosystem.

I'm sure a lot of people will build there, to be honest, just given the captive user base that Robin Hood will funnel. But at the same time, it's like, if they have pride at themselves on building great products, and, like, they have to continue doing that. And I bet you Robin Hood's developers that launch on Robin Hood chain are going to be using Coinbase developer platform to build their app. Yeah, that's funny. Yeah, that's funny. guys i've learned a lot uh so far in this conversation so really really i'm glad you guys were able to come on and shed some your knowledge as we kind of wrap this up here let's go back to the very beginning where i talked about the current valuations hood took the ticker is hood 81 billion

dollars coin 85 billion dollars so again roughly neck and neck as it kind of stands today omar when it comes to future hood aspirations i know i can't ask you to ever predict the future of the market you know we have macro there we have to be concerned about but obviously your bullish hood. Like what kind of numbers are you looking for? Are you looking for a 50% gain? Are you looking for a 500% gain? What kind of timelines are you thinking about?

Just show some light about your future imaginations for where this could go. Yeah, I haven't sold any hood and I've sold it for a while. And I think that one aspect of this story that we like didn't talk about, which is like really important to think about when you look at hood's valuation is there is like our parents generation and our grandparents that unfortunately aren't going to be with us forever. And like the way Robin Hood is building their business is to very much be the primary recipient of like this generational wealth transfer. And if you like look at a range of different forecasts, like the numbers look something like $10 trillion over the next decade plus. And so like

if you were to just like truly think about what happens in that bear scenario where someone that You love very in your family who passes away. Where does that money flow? Does it end up sitting on like the traditional platforms that your parents are using? Does it end up coming to what you're using? And I think like I have a quite constructive view on that, which is I think Robin Hood's going to be one of the primary beneficiaries, especially if I do my banking, my payments and all my investing.

And if that number is anywhere in that wheelhouse and they're able to capture, you know, 10% of that, which is like a trillion. which is insane, you know, so 1%, you know, you are talking about a business that can more than double triple and quadruple without like having to go too far out on the imagination spectrum. And so it's part of the reason why they bought a company called Trade PMR, which is if I have money passed down,

I want to do it in the most tax efficient and optimized way. And so that when that money does come, I have access to the right financial advisors, I have access to the right tax professionals, and I have right access to like the range of different investment alternatives, to make sure my family's set up. And then when you think about it in the construct of their whole business, which is like, if I have a Robin Hood gold card and I have virtual cards for my kids

and like my wife is on it and everything is encapsulated, Robin Hood will be one of the primary beneficiaries of all of that in the future. And so I think when you look at $80 billion, like it is expensive. There's like no doubt about it. The stocks, to your point, it's run up a lot recently. But I do think, like, if the business is the primary beneficiary of this wealth transfer, and like, you don't really even need to believe anything else. Like, you can almost discount the crypto stuff.

It is, it's a business that should be worth a few hundred billion dollars over the coming decade. And like, I think it's probably underselling it relative to the opportunities that globally and the financial infrastructure globally and the range of different ways they can monetize. Like today, it's $150 million or $150,000. our poop per user. And so, like, I think they're, yeah, I'm not going to, like, put on a specific price target on it, but I do think it's expensive relative to the business today, but it's not

relative and not expensive relative to what it can potentially grow into. And so, like, for that reason, I continue to be bullish. And I, like, am a big fan of Vlad and everything he has done. And I feel like it sits at the perfect intersection of changing technology, just global societal trends with populations and the way we interact with technology. And so I love it for all of those reasons. I've done a great job. And so I think, you know, even if the valuation does seem expensive today, if you look at it on a reasonable time horizon, they can more than grow into that and exceed it by a large margin. I definitely really enjoy that thesis because this is also one of

the same thesis that make me bullish about crypto. This is something that the crypto industry has chanted as chant as like when that wealth does come down for. from the boomers and the Gen X's down into the millennials and zoomers, those generations are going to buy assets that they relate to, which is Bitcoin and crypto assets, Ether. And so I've heard that same thesis, Omar, but I've also heard it in the crypto context too, which definitely benefits Coinbase in a similar fashion.

Maybe Robin Hood has a bigger net, and I could totally take that argument. But nonetheless, I think that's generally bullish for crypto assets, which I'm going to take that same argument and give it a plus one to the Coinbase side as well. David, I want to throw the same kind of question to you. Again, $85 billion, Coinbase is where it currently sits. Again, I don't want to pin you down to any sort of timeframes,

but give me a similar kind of like ending thesis to Coinbase and its future aspirations. Yeah, I mean, I said something to Omar, I would say yesterday or the day before. I think the target for both these companies is higher on a longer timeframe. The near-term target is Bank of America, $300 billion plus market. cap. The long-term target is overtaking JPMorgan, 800 billion plus. I think both of them can do that in a decade, potentially by the end of this decade, depending on how large the shift is in terms of global wealth transfer from demographics and also a technology shift from off-chain to on-chain. So I think Robinette is the demographic wealth transfer play. I think Coinbase is the

technology shift play to the global on-chain economy, sorry, the global economy moving on-chain. Coinbase is the preeminent U.S.-based crypto company, the largest capital market in the entire world, 100 trillion plus global economy. If you believe that the industry, if you believe that the capital markets will move on chain, I think Coinbase is the clear play. It has 930 million dollars of like adjusted Ibrda in Q1 alone compared to Robin Hood sitting at about 430 to 450. million adjusted EBTA, yes, Robin Hood does have a higher higher. I think it's like 30 to 40% higher, even though it's largely an estimate on Coinbase because they don't share their monthly transacting users anymore like they used to. Robin Hood does have a larger net today.

But I think if you look at the overall growth rate of Coinbase year over year, even quarter over a quarter over year over year basis, it's growing about 25%. Obviously, maybe a little harder to discern because of the cyclicality nature of the crypto industry. But if you look at a subscription and services revenue, it's growing at about 35 to 36 percent year over year. Very much like what Omar said. I think both companies are expensive today. But I think that if you look at both businesses, they have a very clear line of sight to 10xing their revenue over the foreseeable future.

I think Coinbase's revenue growth is largely going to come from maybe in the short to midterm, Maybe it comes from U.S. Purps if it is a hit in addition to the growth of stable coins on chain and obviously getting the large revenue share from Circle. I think the long-term thesis on Coinbase is that it is a thin infrastructure layer for the economy moving on-chain. And it's going to power every single front end, Tradfai or FinTech front end in the world, maybe outside of Robin Hood. But every single developer that is building in the on-chain economy is going to be using some toolset that, is developed through Coinbase and they're going to figure out a really intricate or a really elegant way to monetize that and have a high margin high growth business for years to come. Yeah, so very bullish both.

I think that I'm at I think Coinbase is just a bet on the industry growing. Robin Hood is a bet on Robin Hood. And I think both will extremely, we'll do extremely well. Well, I mean, I went into this episode thinking like it's going to be coined versus hood, but I think as we wrap this up, it's going to be coin and hood. I don't really see why they actually need to be. They are doing very similar things,

but in pretty different lanes that definitely do touch in certain arenas, but overall, I think it's just a story of two new companies bringing the world of finance into modernity in their own particular ways, in ways that are very necessary and meaningfully differentiated. And so this was a great discussion, guys, and I think my big takeaway is going to be coin and hood in the future.

Awesome. Thank you for having us. It was great. I agree with that. Omar, we will get your Twitter into the show notes. You are from Dragonfly. And David, we will also get your Twitter from Twitter into the show notes as well. You are from Blockworks.

Guys, I learned a lot. This is a phenomenal episode. I really appreciate guys coming on and sharing your knowledge. Thank you very much. Thank you, again. Bankless station, you guys know the deal. Crypto is risky. Equities.

They're risky too. but you know what? Being sidelined. Also risky. So you can lose what you put in, but nonetheless, we are headed west. This frontier is not for everyone, but you're glad you are with us

on the bankless journey. Thanks a lot.