Bankless - Vlad Tenev Wants to Tokenize SpaceX & OpenAI on Robinhood

Episode Date: March 31, 2025

Robinhood CEO Vlad Tenev returns to Bankless for a wide-ranging conversation on the future of tokenization, crypto regulation, and Robinhood’s evolving product suite. Vlad lays out a bold vision for bringing tokenized assets like SpaceX and OpenAI equity to retail investors, discusses the role of prediction markets as "truth machines," and introduces Robinhood's latest products: Strategies, Cortex, and Banking. This one’s a big glimpse into where TradFi and DeFi collide.------📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium------BANKLESS SPONSOR TOOLS:🪙FRAX | SELF SUFFICIENT DeFihttps://bankless.cc/Frax🦄UNISWAP | SWAP ON UNICHAINhttps://bankless.cc/unichain⚖️ARBITRUM | SCALING ETHEREUM⁠https://bankless.cc/Arbitrum🛞MANTLE | MODULAR LAYER 2 NETWORKhttps://bankless.cc/Mantle🌐CELO | BUILD TOGETHER AND PROSPERhttps://bankless.cc/Celo🏦INFINEX | THE CRYPTO-EVERYTHING APPhttps://bankless.cc/Infinex -----✨ Mint the episode on Zora ✨https://zora.co/coin/base:0xa77995768d39c157180262d352f86f39ac1b3fbd?referrer=0x077Fe9e96Aa9b20Bd36F1C6290f54F8717C5674E------TIMESTAMPS0:00 Intro5:54 New Administration12:19 Tokenization16:18 Tokenized SpaceX18:12 An IPO Alternative23:39 Prediction Markets25:40 Kalshi29:58 Future of Prediction Markets35:58 Robinhood Banking38:27 Robinhood Cortex44:08 Robinhood Strategies49:04 Cash Delivery52:10 Crypto Listings54:37 Why Distinct Apps?56:32 How Bankless is Robinhood?1:00:42 Closing Thoughts------RESOURCESVlad Tenevhttps://x.com/vladtenev Robinhoodhttps://robinhood.com/Washington Post Op-edhttps://www.washingtonpost.com/opinions/2025/01/28/investing-crypto-tech-robinhood-stock-market/ ------Not financial or tax advice. See our investment disclosures here:https://www.bankless.com/disclosures⁠

We wrote an op-ed actually in the Washington Post a couple months ago that I published that makes the case for tokenizing private securities. So if you think about it, right now it's hard to invest in OpenAI or SpaceX as a private company. And I think crypto can help solve that. So if you tokenize private companies, it'll be good for the companies and also for investors. It's crazy to me that you can't invest in companies like SpaceX and Open AI. But, you know, we have clarity on meme coins and people.

can basically invest in those freely. Welcome to Bankless, where we explore the frontier of internet money and internet finance. Today on the show, I'm talking to Vlad Tennev, the CEO of Robin Hood. Robin Hood is increasingly becoming a power player in the world of crypto, mainly just due to their sheer size of their user base in AUM. Robin Hood entered crypto markets long ago, both with making crypto accessible in the Robin Hood app, but also the Robin Hood wallet, a non-cissodial crypto wallet. Robin Hood's furthering of their own frontier in the crypto space has really been put

on pause due to the regulation by enforcement stance of the previous SEC, but now that is behind us. So I'm looking to learn a little bit more about what's next for Robin Hood when it comes to integrating crypto into their product offerings now that they have gotten the green light from the SEC. Then completely coincidentally, the week that I recorded with Vlad, Robin Hood announced some pretty big new product lines. These are Robin Hood banking, strategies, and Cortex. So I was also able to talk to Vlad about all of those things as well. And then also maybe the most interesting part of the interview, definitely my favorite part, was the dual discussion of the increasingly high hurdles it takes for companies to go public in today's traditional stock market and how that

fact is interacting with the tokenization movement. Some of the biggest, most exciting companies of the modern age, SpaceX, OpenAI, Anthropic, these are all private companies with no formal market, even though equity does change hands in the private market. Vlad thinks tokenization can play a big role here to give liquidity to these private companies while also giving financial opportunities to end investors who want access to private equity that is working on the technological frontier. I think that is a match made in heaven and it would make sense if that marketplace was found on Robin Hood. Anyways, I really enjoyed this conversation with Vlad. Even though Robin Hood is not entirely a bankless platform, I enjoy Robin Hood putting pressure on old, archaic traditional finance because that's just good for

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talk about some more crypto-native subjects, mainly this new era of regulation in crypto, crypto inside of the United States. So this new administration has unlocked many doors for the crypto industry inside the United States, especially for institutions who have always wanted to enter the crypto industry, but have really been too uncertain or a risk-averse due to just regulatory uncertainty. So now, with this new administration, what doors have? specifically been unlocked for Robin Hood. What can you guys do now that you couldn't do before, and which doors are you going to go through first? Yeah, I think the immediate thing was the cessation of regulation by enforcement. So, like, just a big improvement is to not be under all-out

assault over all aspects of the crypto business. So, you know, there was the announcement that the SEC closed its investigation into crypto, along with the crypto businesses of some other companies in the industry. And I think what you felt was immediate relief, the feeling that we can just move forward as a company and as an industry without having to deal with this relentless onslaught, where it was very, very clear that the previous administration had a view that crypto shouldn't exist in substantive form and should certainly not be allowed to integrate with the traditional financial system. So I think that was a big boon. And now there's two big things that are underway legislatively. So I should be clear, I mean, cessation of enforcement is a big thing.

There was also clarity on meme coins, which you probably saw. The SEC issued a memo on meme coins. specifically saying that they were not securities. And this was basically something that was not very controversial. I mean, the whole thing with meme coins is it was a fairly easy legal analysis to determine that they don't qualify as securities. But everyone was kind of independently doing this analysis for every coin. The folks that were doing a good job at this, including Robin Hood, were doing rigorous analysis for every coin, including a security analysis. And that was expensive and burdensome. So having this sort of like clarity was very useful. And similarly, there's more clarity about staking, whether staking is a security. And that's a great

thing as well, because if you think about staking, people are contributing their own compute to supporting the blockchain. There's staking providers that aim to reduce the complexity of that. and generally that results in more yield, more crypto in customers' pockets. So lack of clarity there was actually just hurting U.S. consumers because they couldn't generate as much yield from platforms that are more regulated. And so having clarity there is good. And there's two big legislative initiatives right now, stablecoin and market structure. Stablecoin is going to come first, and I think that'll be welcome and it's good.

but market structure is what we're really excited about. And I think that's the mechanism by which we'll have clarity on how we can incorporate crypto technology into real-world trad-fi assets, like securities, also like yield-bearing stable coins, as well as prediction markets, we'll have to outline what qualifies as a crypto-asset security versus a crypto-asset commodity, and also what steps we would need to take as a platform to list crypto asset securities, and what would it take as a company or as an issuer to actually issue crypto asset securities to the American public? I think those are the big questions. And getting legislation to help us answer the questions is what's going to unlock the true

power of crypto technology. So that's what we're very excited about. And you had mentioned companies that are working on connection. connecting stablecoin. So you can essentially do banking backed by stable coin where your stable coin is staked or put into some kind of pool that generates yield. I think crypto market structure legislation would actually unlock those types of products and you'd have more competition in the banking sector. I don't think stable coin is quite there because it doesn't stipulate yield-bearing stable coins. So more regulatory clarity is needed to actually put that on firmer footing. But we're

optimistic it'll come. And we're engaged in Washington to help in this legislation. And I think it's heading in a positive direction. So we're feeling good. I think maybe if I'm hearing your answer, there are a bunch of product lines that theoretically exist that are out there, that we really need that market structure bill to get through Congress so that we can stop being in this exploratory phase. this ideation phase and actually stopping in this building phase. Is that correct? Yeah, 100%. Yeah. So effectively, you know, a stable coin, for example, that bears yield, that pays interest directly to holders, resembles a money market fund. Right, right, which is a security. Stable coins themselves resemble money market funds because there literally are money market funds

that hold treasuries. And so, you know, that's where stable coins being treated a little bit differently and has been for a while. But I think that's where the regulatory clarity can come in. What about the vertical of tokenization? Because I think that is just a super hot topic with anything that is in the world of Tradfai. Because I think that's really kind of the conduit between the world of traditional banking, traditional finance and the world of crypto is like, let's tokenize some more assets and start to leverage and lean into the value of public permissionless blockchains. Yeah. Where is Robin Hood's role in this like tokenization movement? I'm assuming you guys are bullish on it. Do you guys see yourself as an issuer, a platform? Will

Robin Hood create tokenized products? So you guys are just interested in being the marketplace for these things? Like, where do you guys stand in this like tech stack of tokenization? Yeah. So tokenization by this definition is taking a non-crypto-native asset and assigning it representation on a blockchain so that it's freely tradable. So we already have it with stablecoins. Stable coins are in effect tokenized treasuries. And also, you know, Paxos has a tokenized gold product, for example, that's a very interesting product. And we actually partnered with Paxos and a few other companies on USDG, the dollar global network, which aims to build a stable coin that's available globally that pays an attractive yield to holders. And the next step would obviously be tokenization of securities, which we're very excited about. So that allows you to have owners. in companies in the same way that stable coin legislation ensures U.S. dollar dominance globally, which I think is why people are excited about and you're having so much excitement, particularly in Washington around it. Everyone wants U.S. dollars in U.S. treasuries to be accepted and

purchased and for there to be high demand for those products globally, particularly as more countries are moving away from U.S. treasuries. So Stablecoin is viewed, I think, rightly as an area that could increase demand among individuals overseas as governments, you know, become prone to diversifying away from holding treasuries. So in the same way that Stablecoin legislation can kind of push forward U.S. dollar dominance, I think tokenized securities can really push forward U.S. company dominance in the global market. So we increase. the pool of shareholders for U.S. companies. Right now, it's very difficult to invest in a U.S. company if you're overseas. And so in the same way that stable coins made it easy to get dollars,

tokenized securities will make it easy to access U.S. companies. So we're excited about that. I think that's good for the companies. That's good for people outside the U.S. because they'll have access to these effective wealth building tools, which is another way to diversify if they have loss of purchasing power due to local currencies that are devaluing sharply. So I think that's exciting. And I think it's also good for our entrepreneurs and capital formation. If you make it easier to raise capital in the U.S. by tapping into a global crypto market, you'd get a lot more interesting companies. So we wrote an op-ed actually in the Washington Post a couple months ago that I published that makes the case for tokenizing private securities.

So if you think about it, right now, it's hard to invest in OpenAI or SpaceX as a private company. And I think crypto can help solve that. So if you tokenize private companies, it'll be good for the companies and also for investors. It's crazy to me that you can't invest in companies like SpaceX and Open AI. But, you know, we have clarity on meme coins and people can basically invest in those freely. If I'm putting some of the pieces together, there is like a market for SpaceX equity out there. not crazy to have a friend who just managed to find a way to access space X equity. And so I think what you're kind of saying is like, well, since there's already a market out there, it's in the

private market sector, we could tokenize that equity and make that into a more formalized, more structured market using crypto rails to do that. Totally. And then I would imagine Robin Hood would love to be the marketplace to service tokenize equities, at least if I'm putting pieces two and two together. That seems like a very viable future. Is this kind of the roadmap that you see and like how close are we? How close are we into tokenize SpaceX equity on Robin Hood? Yeah, I think Robin Hood sits at the intersection of TradFi and crypto. So we have all the crypto technology. We have all the traditional financial infrastructure. You know, we've got multiple broker dealers. So I think that's that's an area where we could contribute to the ecosystem.

And I think in the future, this will look something like an ETF issuer. So ETF issue. So ETF issuers, you know, there's ETFs that hold a basket of securities and then issue shares of the ETF. In a way, that's a precursor to tokenize securities, right? And there's a creation redemption process where if you come to the ETF issuer with a basket of those securities, they'll redeem it for a share of the ETF. And vice versa, you can, you know, redeem the ETF for the underlying basket of security. So I think that's an analogy of what already happens in TradFi that tokenization can kind of evolve using crypto technology. There's been not a substantial decline, but the trend of public market IPOing is towards a lower number, simply just because costs of IPOing are just so high, so prohibitive for companies.

Like the bar just seems to be getting higher and higher for companies to get over in order to access public capital markets. do you think that because of this trend, that that will also push tailwinds towards this kind of private market tokenization frontier? Or is that just like too difficult in terms of just like nation state compliance and unwieldy in terms of just like what finance norms are? What do you think about that? Yeah. I think the way it's headed is tokenization of securities kind of paves the way towards an IPO alternative. I think that'll happen. And even if it doesn't happen in the U.S., soon it'll happen internationally, right? Because many countries are setting up their frameworks for issuing crypto asset securities. And crypto by its nature is global. So if you can issue a token of a company on a blockchain regulated in one jurisdiction, you sort of immediately tap into this global market that's getting increasingly more liquid and has hundreds of millions of participants around the world. So,

I think that makes it an inevitability that it's embraced by the U.S. as well. And I think there's two use cases. If you're a private company, at the absolute early stages of company formation, this is primary capital, right? It's the equivalent of a traditional IPO where you're raising capital from shareholders. I think primary capital is very, very useful at the earliest stages, because I remember being an entrepreneur running a seed stage company, when you're in fundraising mode, it takes up a ton of your mind share and resources. And those resources are really, really meaningful when you're a small company. So if I had an option to just tap into a global pool for raising capital and get my fundraise done very, very quickly, that's a compelling value

proposition for an early stage founder. So I think it could help. It was get a lot more companies. You'll get a lot more companies, a lot more projects, and a lot more exposure at earliest stages where the risk is highest, but also the upside opportunity is greatest for investors. And for a late stage private company, something like an open AI or SpaceX, the value proposition shifts. So I think it's less interesting to the founders of those companies at that point because they've already raised a ton of money. Maybe they're planning an IPO or other things. But it becomes very interesting to employees, you know, some of these companies of thousands or tens of thousands of employees, they're looking for liquidity.

They don't have visibility as to when there's going to be an IPO or liquidity event. And so the employees are interested in diversifying a little bit. And that becomes a strong value proposition. And you have secondary platforms, you know, platforms like Equity Zen or Forge or some others that operate in the space. And they actually right now go to employees. They reach out to employees of these companies because that's the receptive audience for diversifying and selling secondary shares. Now, the problem with those models is the liquidity is actually split. Right. fragmentation. The platform itself has to go out and figure out how to get

supply and bring it on, whereas crypto benefits from interoperability where you just have to get it on the blockchain is freely tradable and you immediately access that global liquidity, which is why I think that it's such a great technology solution. There seems to be just a handful of different, like, trends that are just clearly pointing in this direction. And there's just a bunch of cool companies out there, SpaceX, Open AI, that are just private and not seemingly interested in going public. Just all of these AI labs for just a broad category just don't have public equity or their, like, Facebook or Google or it's just something way too large, where it's just like too dilutive of an investment vehicle to get exposure to AI. Totally. If you want exposure to AI as a retail investment.

investor, your options are incredibly limited. I mean, you have like, Nvidia, which is multi-trillion, alphabets, multi-trillion, and, you know, Tesla, of course, but there's a huge gap. You can't get exposure to open AI or anthropic or perplexity or any of these interesting AI companies. Yeah, yeah. And if you just look at the public markets, you just see the multi-decade-long trends of today in the modern age. Opportunities are no longer in the public markets. They are in the private markets. Partly what I said earlier is just the compliance cost of IPOing is just getting higher and higher and higher. And meanwhile, crypto is like offering the technology to be an answer to that. I just see like multiple different tailwinds pointing towards

this inevitable conclusion of tokenizing private market equity and that actually becoming more or less the pseudo public markets of sorts. Yeah. Yeah. Okay. So I also kind of want to get into the world of prediction markets because this is something that Robin Hood has also entered into. Before we get there, there's this tagline of Robin Hood of markets for everything. Am I hallucinating that or is there some sort of like actually official brand of just like that's what your guys's goal is? Fill in the gap of my understanding here. Yeah, I mean, we haven't used that tagline specifically as Robin Hood. Okay, so I did imagine that. But the name of the company is Robin Hood Markets, right? That's our parent company. And so the mission, which you probably heard, is democratized

finance for all. And what that means is generally speaking, if there's a market, we, believe in markets and we think that if there's a market that we should facilitate it and allow our traders to access it. And generally, if it's an institutional market and retail is interested in it, retail should be allowed to access it on a level playing field to institutions as well. So those are a few of the North Stars. North Stars about offering markets. So that applies to prediction markets as well. But I think prediction markets have an additional value for me personally, which is there's a societal benefit for that market being robust outside of just trading, which is having a robust prediction market means you have better predictions across a wide variety

of events. We saw this in the election where the prediction markets gave you that information hours or even days before the traditional media. And I think you're going to see it across multiple different categories. So I think prediction markets are truth machines and they're an evolution of the news. They're an evolution of the newspaper where in some cases you even get the news via prediction markets before it happens, which I think is super interesting. Yeah, I hosted an election party like many people do. And of course, we had mainstream media on the news, but I'm just primarily friends with crypto people. And so in addition to having mainstream media, we also had polymarket on a screen. And everyone was slipping back and forth between

Polymarket and the mainstream media and polymarket was actually the more interesting thing to look at because it was actually giving us the data that we felt was much more real time. So in a recent announcement out of the Robin Hood, let me just read this and we'll get into the prediction market section more definitively. Recently, Robin Hood announced a prediction markets hub directly within the Robin Hood app giving customers the opportunity to trade the outcomes of some of the world's biggest events. At launch, the will allow customers who trade contracts for what the upper bound of the target feds fund rate will be in May, as well as the upcoming men's and women's college basketball tournaments, two very different

markets. So I think you kind of already answered my first question, which is what motivated the integration of a prediction market into Robin Hood. But notably, this prediction market product is also powered by Kalshi. Maybe you could go into that actual partnership between Kalshi. What's Kalsh's role and the prediction market that's found in Robin Hood? Yeah. So Kalshi is a designated contract market. market, a DCM. And you can think of a DCM as akin to an exchange, a stock exchange. So in equities land, there's exchanges like the NASDAQ and the New York Stock Exchange. Brokers, including Robin Hood, connect to exchanges or market makers that trade on these exchanges,

where the buyers and sellers are actually crossed. And the exchange essentially creates a market. So in equities land, Robin Hood's a broker. We have an introducing and a clearing broker. We route to market makers. We also route directly to exchange. And exchanges are where the individual buy and sell orders cross. In futures land, CFTC land, there's designated contract markets, DCMs, which are like the exchanges where the buyers and sellers meet. And then FCMs, future commissions, merchants, which is what Robin Hood is in this case. We're in FCM. So we're responsible for the customer relationship, the interface, and then we route to DCMs and via market makers for the orders to be crossed. So, yeah, you can think of Cal Shia's analogous to the NASDAQ or NYC, and we're playing the role that we always play as a broker. And for the presidential election, we connected to a different DCM called ForecastX, which is a subsidiary of interactive brokers. we have the capability of connecting the multiple DCMs and offering different products offered by those exchanges. Actually, the DCM is who has the ultimate responsibility for listing the contract. So all the contracts that we list have to be listed on a DCM in order for us to offer them.

Okay, so you cannot offer your own prediction markets. It has to be on a third-party DCM. Correct, yeah. And actually, one of the reasons why Polymarket, which you mentioned, polymarket prediction markets are not available in the U.S. is because they're not a DCM, right? They're taking this crypto technology approach. And, you know, I think this is one of those things that's going to need to be clarified in that market structure legislation that, you know, we were talking about a little bit earlier. So, you know, obviously the CFTC regulates these things as commodities. They have licensure. So, you know, would polymarket, style prediction markets be handled under that regime, or is there going to be some other regime because it's crypto? So those are kind of the big prediction markets questions that we need legislation before allowing something like polymarket to operate in the U.S. Yeah, I think everyone listening to this would definitely enjoy being able to access polymarket inside the United States. One last question on the prediction market side of this thing.

So we are starting with the Fed funds rate and also men's and women's basketball. But what next? What are the future prediction market bets that people can make on Robin Hood in the near-term future? Yeah. So with this latest round of contracts of markets that we listed, we've gone from having the capabilities to list one at a time to listing hundreds. And of course, the operational complexity of clearing and paying out and setting up new contracts that are depending on previous contracts, that's really, you know, the men's and women's

college basketball really has put that to the test. So we're soon going to have the capability to go from hundreds to thousands, which really opens up all types of prediction markets. So we're excited about economic. I'm excited about artificial intelligence progress. You know, there's some very cool prediction markets that give clarity on, you know, different AI developments, which I think our customers are very, very interested in. But really, I think it should be the newspaper, right? There's front page, which is what's trending right now. in the world that people are curious about. There's your sports section, your business section, arts and leisure style. I think that's a good microcosm for what we need prediction markets on. Those are basically the categories. Yeah, prediction markets as a truth machine, I think, is one of the reasons why crypto people are so pilled on prediction markets. And there's been examples in the past of pretty big and also sensitive geopolitical events that have happened as

Israel versus Iran when the missiles were going across the border. There was a prediction market or set of prediction markets on polymarket that was actually truly informative about what people thought about future events. And at the same time, highly consequential, kind of sensitive subjects, but also, you know, high stakes and very important because I think, you know, if we are entering a unstable geopolitical future, people would appreciate understanding what the market thinks about the likelihood of certain outcomes. Absolutely. How do you think about the idea of, you know, integrating high stakes, global macro geopolitical prediction markets inside of Robin Hood? Yeah, I think that it's important for society, right? I think that there's a current CFTC guideline for prediction markets and event contracts, as they're called. And basically, it stipulates that, you know, prediction markets that are contrary to public interest shouldn't be listed. And I think that, you know, that's a somewhat vague, very interpretable, yeah.

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new verticals out of Robin Hood were announced. Robin Hood strategies, Robin Hood banking, and then Robin Hood Cortex. So maybe we can kind of go one by one through these things and maybe you can talk about the motivations for building each one of these verticals. Let's start with Robin Hood banking, because I think that's the product that I think is the most interesting to me. So give me the details on that and what motivated that creation of that product line in the first place. Yeah, I mean, the overall inspiration for the gold event is we want to give all of our customers the same access, opportunities, and strategies that a high net worth

individual would have from their team of financial experts that help them with their financial life. So high net worth individuals have private bankers, they have investment advisors, they have research assistance that help them scour the entire world, private and public, for opportunities. And with technology, we can actually provide the value of a lot of these services to customers for a very, very low fee. So that's kind of the North Star. We want to put a sophisticated, high net worth family office like financial team into everyone's pocket and give it to our gold subscribers for as little as $5 a month. And I think that's sort of like the promise of something like, the iPhone applied to financial services. How can you give someone a luxury product, a product that

people are proud to use and be associated with because it's high end, but can you offer that at a price point that makes it truly accessible to everyone, where everyone just sees the extreme value? And so that's the thread behind the three products we announced at the gold event. Strategies is your digital investment advisor. Cortex is your research assistant. and Robin Hood banking serves as your private banker. And I think in the future, this is also the first AI product that we've rolled out within Robin Hood. So I think in the future you'll see the latest intelligence models and reasoning models actually imbued further and further into the product experience, further stitching these two together and really providing you a great experience where everything is aware of everything else. Yeah, when I was reading this announcement, I saw the Robin Hood Quartet.

And I was like, what? Robin Hood's releasing an AI agent. But then, of course, reading into it, it makes a little bit more sense. I mean, maybe you can kind of just like give us an example of like how someone might use Robin Hood cortex. I'm assuming it's going to be in the canonical Robin Hood app. Yeah. And then you just ask it questions about stuff that's going on in finance. Is it just kind of like an LLM that's financially themed? Pop open the hood a little bit more and color that in for us. Yeah. So right now, there's basically two applications of it within the Robin Hood app. One is to answer the question, of what's going on with a stock right now. So if you use Robin Hood, from time to time, we send notifications about market movements. If a stock's up or down 5%, and then a very typical use case is to go to the stock and figure out what's going on. I don't know if you've had that experience. Certainly, yeah. But yeah, Cortex answers this. On the stock detail page, you go to the stock, and it'll explain what's driving that movement to the best of its ability.

So those are stock digests. And we also wanted to tackle another use case, which is around options trading. So options are very confusing. You have to really process a lot of information and you have to be quite experienced in order to construct an options trade, particularly one that has multiple legs, like a multi-leg options trade. And what Cortex does via trade builder is it takes a prediction about what a stock's going to do at some point in the future and creates and constructs options trades that help you execute

on that prediction. And it's a quite magical experience. We did a demo at the gold event where, you know, you go to a particular stock, make a prediction, and then it's sort of like outputs trades that you can execute on directly, or it can put you into our new side-by-side options chain, which is rolling out starting next week, which is an amazing experience for enter. multi-leg options chains all from one screen. Is the idea here just translating human English expressed intent or preferences in a trade, ingesting that into an AI, having the AI process that, and then spit back out some potential options or like a package of like, here's some potential trades that you might be

interested in. So the idea is just coupling human language inputs into like potential option trades. Is that the idea? Yeah, well, a little bit more than that because we also take all of the information that's out there. So that includes, you know, market data, which is, you know, quantitative information, technicals, news updates from various sources. And we try to synthesize that and actually assist and provide a helpful tool for generating the prediction in the first place so that, you know, you have some insights, some data, some news right there that can help you as an individual

in making your prediction. Can we talk about what is actually in the DNA of this LLM? I'm assuming this is not just a chat GPT wrapper. There's a little bit more precision going on behind the scenes. So, like, what's unique about, like, the data that is trained upon or any sort of information about, like, the post-training or anything that really makes this a Robin Hood financed-themed LLM? Yeah. How is it unique? Yeah. So most typical LLMs don't have real-time market data or financial data. You know, they have stale data. So they can't really, without integrating external tools, even tell you what the stock price is of a stock right now. And basically, when they provide financial information, they hallucinate. Oh, no. Because they don't actually have access to the

real-time data. And so what we've built is a layer of technology on top that ensures that the data that is going to be interpretable and hallucination-free. So that solves the two biggest problems that typical LLMs have. Yeah, I would imagine a hallucinating inside of a finance context could be catastrophic if we do not get that right. Yeah, 100%. But the benefit is we have a source of truth. So unlike, you know, writing a history essay where whether or not you're hallucinating is somewhat ambiguous, if it's financial data, we have the data. So we can build guard rails and we know we can identify the hallucinations precisely. Right. And this is maybe the competitive advantage that Robin Hood has in the endeavor of creating a finance AI and, you know, assistant, which is you

guys also have real-time market data. You guys have user data. You guys have a bunch of finance-related data. And so I'm sure that's just being coupled right in into the value of the LLM itself. Yeah, that's one advantage. The other is that you can actually transact within our app. So if we can make cortex contextual to where you want to perform an action, then it can be more useful. Yeah, what we didn't want to do is just put a chat box in the app. Yeah, because people don't know how to use that. It can provide output that's superfluous and wordy and, you know, has hallucination problems. So I think that would be the naive solution that we just wanted to avoid. Getting into the strategies side of this going back there for a quick second, is there a potential

future where this same strategy's product is pointed towards crypto assets. Yeah. Because anyone in the crypto industry, anyone listening to this podcast probably has all of their friends asking them, hey, what do I buy? Or how should I invest in crypto because they don't know. It would be really nice to have some pretty sophisticated crypto-focused strategies that, you know, contain crypto assets. What's it take to point this strategy's product towards the crypto industry? Yeah. There's no technical reason why we hadn't done it. I mean, we have literally a list of probably dozens, maybe even hundreds of features that we could bring to strategies. And we want to see what customers want most. I think we've got a great foundation. We wanted to start with individual

stocks because most other digital advice platforms offer ETFs only. So we built the capability to put individual assets and individual stocks in the portfolios. We, of course, support ETFs as well. And we built a really nice interface where we have a ring that clarifies your asset allocation. We can rebalance on customers' behalf. So it's as close as possible to just an invest hands-off button as you can get. And, you know, crypto is definitely something we considered for the launch. It's something that we can add along with, you know, other assets. So I think you'll see strategies continue to evolve. But yeah, we're excited. It's available right now. Customers can try it. We're already starting to get good, positive feedback and people are moving their portfolios.

Oh, I should say the one huge differentiator for strategies is it inverts and breaks the traditional advice pricing model. So all other advisors out there, pretty much all, I wouldn't say, not absolutely, but your typical advisor charges an asset management fee. So, you know, it's somewhere between 1% for a traditional advisor, 0.25% for a robo advisor on the low end. And what that means is as your portfolio grows, you're just... Your fees grow. The amount you're paying scales with that. But the amount of value that your digital advisor's offering doesn't scale linearly. I mean, having a robo manage a million dollar portfolio isn't 10 times as valuable or 10 times as hard or even significantly different

than managing a $100,000 portfolio, but you're paying 10 times as much. So this had the nasty side effect of if you're a wealthy customer and you're putting more and more money into one of these services, you're sort of like getting less and less happy as time goes on, which is not what you want as a customer, but it's not what you want as a business. You want customers to get happier as their wealth with you grows. And so Robin Hood Strategies introduced an innovative cap fee model where you're not going to be paying more than $250 in fees, regardless of how big your portfolio is. So if you have a million dollars, the value proposition of switching into Robin Hood strategies is actually quite high. How does that change the incentives

of this product then, because this has not become like an AUM incentivized business. This becomes more of a quantity of customers incentivized business. So how does Robin Hood benefit from like big growth of strategies as a product if you guys are capping the fees that you charge to just $250 max per customer? Yeah, well, I mean, it's a huge incentive for customers that have significant assets outside of Robin Hood to move them in. And we benefit from that. with the asset management fee, we benefit from that from the Robin Hood gold subscription. And what we're seeing is once you become a Robin Hood gold subscriber and you have a good chunk of your wealth with us, let's say you put $1,000 in there, you're starting to see the value at that point.

And you will tend to use more and more of our services, including the credit card and the self-directed trading capabilities. So, yeah, it's really about, getting as much of that financial relationship as possible and making it easy for you to put all of your dollars into Robin Hood. And then, you know, we do see our revenue scaling with the number of dollars that we have in there. Understood. Two more things on this new product lineup. One thing I want to ask is this cash delivery service. Oh yeah. Which I'll describe as like Uber Eats, but for cash, I think is maybe pretty accurate. Can you talk about like, why did you guys need to build a Uber Eats for cash? And then how does it work? So like popping up with the hood, how does like money get transferred around?

Yeah, we're getting into the logistics business, which is also very exciting for me. Yeah, so this is a private banking high-end service. And two things. One is we don't have branch offices. So we asked ourselves, how can we give you digital banking where you're not actually making sacrifices? And without a branch office, one of the sacrifices is if you need cash, which by the way, 16% of all payments in the U.S. are still cash payments. So, you know, it's decreasing, but certainly not obsolete. So cash is still important for a lot of people, for very needs. But if you need cash, you have to go to a 7-Eleven or a CBS or something like that if you're a digital banking customer and another neobank. And nothing says private, high-net-worth banking than going to the 7-Eleven to pick up cash, right? So obviously that didn't work. We needed a new solution. So we asked ourselves, what would it take to have the bank come to you? And nowadays, These on-demand logistics platforms have gotten very, very robust. They can bring stuff to you in 10 or 15 minutes.

You can buy an iPhone and get it delivered to your house, right? And that's a small, big-ticket, high dollar amount, valuable item. So this is a solved problem. So we're going to be announcing who we're partnering with. We're obviously not doing the entire end-to-end logistics chain ourselves, but we're working with partners. and it's a complex endeavor, but we think it's going to provide a lot of value. You know, as a matter of fact, I was a First Republic customer before the merger, and one of the really valuable things that First Republic had was cash delivery to your house.

But of course, the cash was in much larger amounts, and it came in a armored vehicle. Right. And so it is a high net worth feature to get cash delivered to your house, and we kind of asked ourselves, how could we make it available to the mass market? Interesting. I would imagine that the minimum on this feature is going to be something higher than like $100. Well, in the demo, I demoed $200, but I think it's still kind of open to discussion. So as it rolls out, we'll learn a lot more about how this works and what the hard parts are and also what customers want and what the typical ticket sizes. I anticipate the average ticket size is going to be in the low hundreds of dollars.

Okay. Understood, cool. Yeah. Getting back into the crypto-stereo topics, win more. crypto assets in Robin Hood because there are not that many crypto assets available inside of the Robin Hood app. What are the plans to just list a wider variety of crypto assets in the Robin Hood marketplace? Yeah, I think, well, we've been adding a lot of assets since the election, and I think we offer most of the high volume ones that customers are interested in trading. You know, Trump, coin, we listed, you know, the day of the inauguration. So that was very popular. We've been adding a lot of assets, and I think now there's a ton of new assets created each week.

You know, tens, I think I've heard hundreds of thousands. And so I think we recognize that we need to sort of like rethink the approach with assets. And I think what you should expect to see is Robin Hood Wallet, which actually is a defy on-chain product, which thus far has been like very disjoint from the main Robinhood app, I think those will get closer together over time since we're getting more and more clarity over time. And you should see the custodied app, the main Robinhood app, get some on-chain features. And also the wallet app will make it easier for you to bring Fiat in and take Fiat out. So I think these things at Robin Hood and also industry-wide will probably converge a little bit more. So there will be less of an onus on listing, and listing will almost

be like an optimization that we do on the back end if we want to make things more efficient and streamlined if we're seeing a lot of volume. But I think the way it's going is customers will have more and more choice going forward. And Robin Hood aims to facilitate that while also making sure that, you know, if you're in a world where there's hundreds of new tokens every week, customers could get confused. It's going to get hard to distinguish high quality from low quality. And we also have to figure that out and make sure that, you know, we're not just facilitating, you know, unreputable tokens and, you know, making it too easy for customers to do things that they don't want to do. So you have the Robin Hood wallet, the core Robin Hood app. There's also Robin Hood credit card, which is, I think, also where Robin Hood banking is going to be, if I'm understanding that correctly. That's right. Robin Hood credit cards becoming Robin Hood banking.

Oh, understood. Okay, so that's three applications. Is the division between these things? Is that all just like regulation and compliance? And is there a vision to just kind of consolidate everything into one gigantic financial super app? Yeah, we started out with the idea that everything should be in one app. The problem with everything in one app is the home screen becomes very, very important, right? And maybe the home screen experience that you need, if you're an active trader, is not, the same one as if, you know, you're a banking customer that, you know, uses our credit card. So I do think most customers have a mental model where their default interface for trading

differs from the one with banking. And I think it's possible to actually unify them and combine them, but it hasn't really been done with too much success before. So basically what my philosophy is, is I'm open to experimentation. Like the super app thing, I'm intrigued by. We could probably get it to work, but I'm not dogmatic about necessarily having everything in one app. I think what's important is having unified KYC and easy money movement between accounts

and otherwise, you know, let the best interface win. So we probably will be, you know, adding more things to the main Robin Hood app. We're also open to our teams, creating their own apps. And we might end up with more than three. And then like Uber and Uber eats, we might end up like recombining and splitting over time depending on what we learn. Vlad, as we wrap up this interview, I kind of just want to speak freely for a moment about Robin Hood and its relationship with crypto and its relationship with FinTech. Because, as you know,

this podcast is called bankless. And we promote going bankless, self-custody of one's own finances, is self-custody of one's crypto assets. Parts of Robin Hood are very banky. In fact, you guys are actually launching a banking product. Yes. And I think crypto and especially Defi has had the kind of like free real estate of competing with traditional finance and their 0.25% APY savings accounts that you would get in Wells Fargo.

Just like, you know, terrible products and innovation coming from old TradFi. And yet I appreciate Robin Hood coming into the market and actually providing some real competition in the world of traditional finance. But also at the same time, I'm like, well, they're not completely bankless. But nonetheless, I also see more and more crypto products and features coming online into the Robin Hood product suite. So I guess I'm kind of just loosely asking, like, how bankless am I? How bankless are you? How bankless will Robin Hood be in the future? And like, kind of where do you guys fall on that? Where do you think the equilibrium lies in like the bankless or non-bankless side of Robin Hood? How could you be so bankless?

Yeah, so we actually, I mean, literally, we are bankless. We don't have a banking charter. And, you know, sometimes I get this question of like, are we going to get the charter? What does that look like? Because we also get compared against traditional financial companies that have bank charters. And there are reasons to get charters, you know, plugging into Fedwire, the system, plugging into, you know, Zell and all these other things, being able to lend. But what we do now, we're neutral. platform, we partner with banks. Whenever we need banking for different things, we have great partners that provide that coastal community bank on the credit side and banking, as well as a bunch of other partners that are part of our cash sweep program. A lot of the big crypto and DFI protocols actually need banking relationships on the backside. If you want to actually take your fiat dollars and get them on chain, a bank is part of the process. And I think over time, if we have clarity, there will be crypto banks, which are basically banks that will get some sort of licensure that have restrictions that are hopefully less onerous than an OCC national

banking charter, but still govern, you know, treasury management and reserves and all those sorts of things. Because, you know, if there's no rules, customers also get burned, you're anchor protocol probably with Terraluna and Celsius and all of these things that, you know, actually seem banklike in their presentation, but don't have some of the critical things. So I'm really, as we started, a fan of markets, level playing field, competition. And I think these worlds are likely to converge more than diverge. And there's good things about the traditional banking system that need to make their way into crypto and obviously the reverse. There's amazing things about crypto technology that make sense

to incorporate into the banking system. And I think we're now at the precipice of being able to bring these two together. And that's going to be an exciting time for the crypto industry and for the customer. There'll be more utility. So I think if we can make some small contribution as Robin Hood to driving that convergence, I think that'll be really good. I think it's also worthwhile to note that it is useful to have Robin Hood to provide some competition on the crypto exchange side of things as well because there aren't that many crypto exchanges out there. And so entering into the market as a competitive force in our side of the financial line, I think is also useful. Vlad, thank you for coming on Bankless today. I've really just learned a lot in this

interview. I'm just kind of honestly pretty excited about the future of Robin Hood. Thanks. We've got a lot to build, but yeah, I appreciate the time. Bankless Nation, you guys know the deal. Crypto is risky. You can lose what you put in. But nonetheless, we are headed west. This is the frontier. It's not for everyone, but we are glad you are with us on the bankless journey. Thanks a lot.