Unchained - Coinbase and Robinhood Are Converging, but Who Wins the Onchain Fintech War? - Ep. 864

Episode Date: July 8, 2025

The race to bring users onchain is heating up, but the competitors couldn’t be more different. Coinbase, a crypto-native giant with deep infrastructure and institutional partnerships, is going head-to-head with Robinhood, a retail-focused fintech now making aggressive moves into tokenized assets and blockchain rails. Their visions overlap (tokenized stocks, perpetuals, custom chains) but the strategies, philosophies, and user bases differ sharply. In this episode, Laura speaks with Diogenes Casares (Klyra Protocol) and Ryan Yi (ex-Coinbase Ventures, CoinFund) to unpack: How these two companies will compete What levers they have to increase their profits How Base became a liquidity black hole for Ethereum Why Coinbase may have already won the “flows” game And how stablecoins, social, and tokenization could decide the winner Visit our website for breaking news, analysis, op-eds, articles to learn about crypto, and much more: unchainedcrypto.com Bitwise Ledn Diogenes Casares, founder of Klyra Protocol and advisor at Patagon Management Ryan Yi, ex Coinbase, Coinbase Ventures, and CoinFund Unchained: Hyperliquid Reignited Interest in Crypto Perps. Can Coinbase and Robinhood Capitalize? Robinhood Is Building Its Own Layer 2 Blockchain Why the Arbitrum Stack Won in the Race to Support Robinhood Chain Why Perps Will 'Eat the World' + Tokenized Stocks - Bits + Bips Timestamps: 🎬 0:00 Intro 🏦 4:17 What really separates Coinbase and Robinhood’s strategies 🛠️ 6:43 How Robinhood’s new chain should try to compete with Base 🔥 14:49 Why the competition between Robinhood and Coinbase is heating up fast in the U.S. 🤔 16:44 Whether Robinhood can catch up to Base’s head start and network effects 🧱 23:48 Why both companies chose to build on Ethereum—and what that signals 📉 36:04 How launching perps in the U.S. could reshape the landscape for both companies 🎮 44:43 How social features and gamification could give one app an edge 🎯 51:31 Why Robinhood is already working with prediction markets and Coinbase isn’t 💰 55:40 How their product differences impact profits and positioning 🤝 1:05:11 Why Ryan believes Coinbase should’ve acquired Circle 🔌 1:10:48 Why Stripe might be eyeing a crypto integration 📊 1:13:57 How Base benefits with small-cap tokens 🚀 1:18:46 Why Ryan says we’re at a real inflection point for crypto Learn more about your ad choices. Visit megaphone.fm/adchoices

I think this is like one of the most interesting and exciting times for crypto. And the reason why I say that is we've gotten to this point from 2017 up until now, mostly like buy us for us, right? Like all the use cases that crypto came up with, we were also the users of at the same time. And we were able to survive as an industry and build this industry to the point of $3 trillion in crypto market cap, black rocks doing Bitcoin ETF, Like, you know, we've gotten to this point. But we've now gotten to the place where we've created all this infrastructure for on-chain and demand for block space.

But I don't think crypto by ourselves can fill all that demand right now. And so I think it's coming at a perfect time for these large incumbents like the Coinbase or Robin Hood or a stride or even telegram in time, where they're actually starting to show basically like how much demand can you actually. handle on chain and effectively the fundamentals and the business case that you can actually have building an on-shane product is going to become a lot more clear now. Hi, everyone. Welcome to Unchained, your no high resource for all things crypto. I'm your host, Laura Shin. Your thoughts on the podcast and Unchained matter to us. Every episode, we feature comments from you all on the show. Here are comments responding to my recent interview with Calvin

Hamilton on the Polymarket Zelensky-Suit stockup. On YouTube, Upstanding Citizen 3877 wrote, First I've heard of it. I looked at pictures from the NATO summit and I would never call it a suit. Ask yourself if you'd wear that to a job interview. Meanwhile, Missoubi on YouTube said, it's a suit. The criteria was met. The saga continues.

To have your comment featured, write a review of the podcast overall or leave a comment on our video on YouTube, Farcaster, RX. Crypto moves fast. It's why Bitwise launched the weekly CIO memo, A jargon-free summary of what's moving crypto markets written by one of the best in the business, CIO Matt Hogan. Get up to speed in five minutes or less. Check it out at bitwiseinvestments.com slash CIO memo. Carefully consider the extreme risks associated with crypto before investing. Lutton is a leading platform for Bitcoin-backed loans, offering a secure and transparent way to unlock liquidity without selling your Bitcoin.

issuing loans since 2018 and earning over 1,000 trust pilot reviews. Learn more at leaden.io. All right. So today's topic is Coinbase versus Robin Hood and how this competition will play out. Here to discuss are Dio Cesaras, founder of Clearup Protocol, an advisor at Paddockon Management, and Ryan Yee most recently of Coinbase Ventures and prior to that coin fund. Welcome, Dio and Ryan. Thanks for having me. Thanks for having us. So just for full transparency, everyone, Ryan and I are actually related, but we have such a big family that I ever. I never actually met him until a few years ago. Now that we've met when there are big family

events, we do talk about crypto, which is really fun. All right. So let's dive into the discussion. Last week, everyone was talking about Robin Hood's big moves in crypto, in particular, its new Robin Hood chain plus tokenized stocks. On the same day, Crack and launch tokenized stocks on the Salon of blockchain. And a few weeks before that, Coinbase requested from the Securities and Exchange Commission permission to launch tokenized equities. And for a while now, we've kind of seen this trend where, you know, for instance, with like Stripe's acquisitions of bridge and privy, there's rumors about, you know, Revolut, hiring for additional crypto plans, Stripe as well. We've seen that there's like this big competition brewing in the fintech space over crypto. And it looks like there's going to be, you know, a kind of a territory that a number of these different financial companies are competing over. And it looks like the heavyweights to start really are Robin Hood and Coinbase.

And so that's where we're going to focus our conversation today. I'd like each of you, Dio and Ryan, to give your general opinion on the strengths and weaknesses of each company. So, Dio, do you want to start? Sure. I mean, they are obviously very different core businesses to an extent. Coinbase is actually in exchange, whereas Robin Hood is more so a broker, although a lot of people might argue that Coinbase, to a good extent, is also a broker because they go direct to the customer. And they also have very different kind of client focuses. Robin Hood's basically entirely retail, whereas Coinbase has. basically everyone from like Black Rock and ETFs as clients to like average people. Yeah, so I personally think that Robin Hood probably has more of a chance. But I mean, we'll see. There's like a lot of reasons why that could be the case or could not be the case.

And Ryan, what about you? Sure. Thanks for having me, Laura. just as a background, by the way. I spent mostly of my background as a Crypto VCN investor, so spent a couple of years as an investor at CoinFund and then spent a couple of years,

most recently at Coinbase. And so that said, I'm here as an independent voice. Obviously, I work at one of the companies discussed here, but I'm just here to share my thoughts as an observer in this space. Yeah, I think they're just very different companies. You know, Robin Hood is, an equity's first company.

They started off as basically offering really great U.S. for pro and retail traders. And I think more recently they've added basically crypto trading as a capability into their product suite specifically for their users because their users probably want to trade crypto. Whereas Coinbase on the opposite side is a full-stack crypto platform, right? whether you're starting at the custodial level, at the exchange level, or at the broker level. And they offer, obviously, retail clients, but they also service institutions. And most recently, I think, with base and a lot of the different on-chain efforts, starting to go more into the developer segment as well.

So I'd argue Coinbase is definitely more the sort of crypto-first, but the only full-stack platform, whereas Robin Hood started off more traditionally, I would say as like a fintech brokerage starting to offer more crypto products on their platform. All right. So, yeah, both of them right now, like in the market are not that different from each other in the sense that Coinbase has a 91 billion dollar market cap. Robin Hood has an 81 billion dollar market cap. So, you know, I do take the point like they're starting in different places. They're clearly converging them. So let's talk about the first big point in that sphere. So, you know, obviously that was big news last week about Robin Hood Chain, you know, and we've seen that base has done very well for Coinbase, you know, in terms of like daily active addresses, Defi TVL, rich TVL, like it really scores at the top. Base is the top chain on Ethereum. So I wondered if you could just talk a little bit about how you thought Robin Hood Chain could or would try to compete with that.

I think my understanding of what Robin Hood's trying to do is it's much more kind of a Fed chain, almost in quotes. Unlike base where, like, obviously in theory, in practice, it's like a sequencer, but in theory, everything, you know, you don't have to do KYC for every single transaction, not every single wallet is associated with someone. Robin Hood seems to very much not want to do that right now. They more so want to use as a coordination layer and also kind of cook in these KYC systems and much more so kind of use it as a way to tap capital for leverage or for kind of the working capital requirements that they might right now tap into like a jeffreys, for example. That's kind of how I read what Robin is trying to do.

I don't think they're really trying to build something in the same style as base, if that makes sense. Yeah, I think it's probably better to start from sort of the evolution of these companies of where they were, and that should give a lot of better context, I think, in terms of why they're going on chain and what the strategy is. So, you know, if you take a like at Coinbase, for example, they already offer sort of full-stack crypto services for different protocols and issuers. And, you know, if you think about where base comes in is it's really a way for them to have a developer product, right?

So people coming in to build crypto applications, issuing tokens on base, interacting with the different users on base. And, you know, I think that is going to continue to be sort of a continued focus. But I think there's sort of this question now of like, how do you marry that with the funnel of the Coinbase parent company, right? So how do Coinbase users interact with base? Are they, you know, accessing new types of financial services, whether it's trading or lending or borrowing and things like that? But I do kind of see these as almost like two different products and eventually kind of trying to merge them into a cohesive platform, which eventually should, you know, benefit a lot of things for the product portfolio. Robin Hood's kind of interesting.

in an opposite way, right? Because I kind of look at them in two different growth avenues. So one is more on the brokerage side and then one is on the crypto side. So let me maybe start with the crypto side. You know, it's been interesting kind of seeing Robin Hood grow on the crypto angle because I do remember kind of, I think it was like a year and a half or maybe two years ago even. They started to experiment with very basic trading pairs, right? So Bitcoin only or ETH only. And I don't think they actually own any of the technology or the stack themselves. But over time, they've been actually investing more and more into those things. So, you know, they've built their own custody systems. They started to invest in wallets. You know, and they were,

I think, routing a lot of liquidity to third-party brokers, like a zero hash or somebody like that, mainly on the U.S. side. And what's changed over time is that they're just adding more and more capabilities to really sort of own that entire crypto stack over time. And so, you know, they acquired BitStamp, which should give them sort of the European side of crypto liquidity. But I wouldn't be surprised if BitStamps's U.S. entity would also basically start powering some of their U.S. liquidity on the Robin Hood crypto side. And so it's honestly been really impressive to see sort of how well Robin Hood understands

really owning and building out the different stacks of owning. that crypto experience. And so I think that will just continue as is. What's been cool to see, though, with this new announcement is, you know, is this expanding the sort of brokerage or traditional equity brokerage side of the business or is this expanding the crypto side of the business? And my read of it is I actually think it's a way for them to actually grow more of the brokerage side of the business. And so Robin Hood actually doesn't offer all the products that they offer in the U.S. They don't actually offer that in Europe right now.

And, you know, this is actually a way for them to start offering things like equities and stock tokens and stock derivative tokens into Europe through this sort of on-chain effort. Right. So, you know, if you watch the presentation that the Robin Hood team did at the conference last week, it was very clear that this was going to be a European-only product, at least to start due to. regulation. And so I do think there is some aspect of them being able to sort of expand internationally as one of the reasons why they did this. And by doing it through crypto and doing it on chain, it's basically a way for them to almost leapfrog or maybe use a different sort of financial infrastructure to effectively go into a new geography in a smarter way. That's such a good point. I don't know why I didn't realize that. But yeah, yeah, I totally see

that. Anyway, keep going. Yeah, and so I think eventually, you know, once there is, you know, a better sense of how the U.S. regulatory climate is going to treat these things, I'm sure they'll start to turn that on as well. And ultimately, I think the goal here really for them is how can they actually sort of grow the amount of stocks effectively under their custody, right? Or how do they basically grow the flow that their brokerage is actually. actually channeling for these different tokens. So for example, today they can do the traditional thing where, you know, they grow Robin Hood in, you know, different areas and built on sort of the Web 2 rails. But once you actually have your own chain and you're actually issuing these tokens, you can actually access users that you probably would never have had access to. And that kind of creates this demand over time for people that want to buy stock tokens, right?

whether that's your typical defy user, whether that's a crypto user that just wants to access those things. But ultimately, what that does is it increases obviously the TBL of how many stock tokens are being issued on that chain. But conversely, what that actually leads to is just more and more activity on the brokerage side, on the brokerage side for Robin Hood to actually have those flows. And so I think it's kind of this way in which they're obviously going to geographic route, but they're using sort of the crypto economy. and the crypto user base to actually grow the amount of business that they can have on the brokerage side and increasing the number of users that they can actually touch. And so that seems to me kind of like the phase one maybe of like where Robin Hood is trying to go with their Robin Hood chain.

Yeah, that makes sense. It's like a way of, yeah, growing their customer base both geographically but also just by offering new products that aren't really accessible. One other thing, though, is, so do you feel, I mean, I know they didn't make announcements about like when they would move to the U.S., but when they are kind of in the U.S. or competing more directly with Coinbase, like, how do you view that competition? I don't even know if you view it as a competition between those two companies. Yeah, I mean, I guess like if we had to be like compare these companies apples to apples, it's a bit hard. because the way that they shared our numbers is obviously like at the parent company level. But the way that I view that is ultimately what you have to really compare is the Coinbase retail platform and Robin Hood's retail platform in terms of offering crypto products.

Right. So I think if you, you know, I did some like number digging right now. And, you know, I think right now there, if you just had to compare sort of the revenue of sort of an apples to apples. and this is obviously going to be a little bit of a rough estimate. But I think Robin Hood is still maybe like 15% or maybe 20% of the total revenue of a Coinbase if you're just comparing sort of transacting and trading to each other. And this is across 2024 and Q1 in 2025. But what's been interesting, though, is that that number has been going up

and their share of volume has been going up, which kind of points to signs that Robin Hood does see an area of growth for them specifically on the crypto trading side of things. And so I expect them to start to get to not like full parity, but trying to effectively offer these same amount of products that Coinius already offers to retail. So trading on the all of different pairs. I saw that they announced staking. I saw they announced perps, at least on the European side. So I expect there to be a lot of sort of overlap in terms of the actual crypto offerings

that they're trying to offer. Okay. Yeah, well, so at this moment, you were saying like they won't compete head to head with base. But like in the future, you know, and this question is for both of you, like, do you feel like they would try to do that? And if so, like, how do you see that playing out? Or like, what do you think would be a smarter way for a smart way for Robin Hood to try to compete with base because it is at the moment the leader? I kind of agree with Ryan in the sense that like right now if you want to invest in, you know, the largest single stock market in the world, which is the U.S. stock market in Europe, you have to go through EDRs, which are European depository receipts, which are basically you can almost think of them as like wraps tokens, but worse in Tradfai. Like you can only trade them. You can only trade them at whatever local exchange they have. and it's split up between all the local exchanges by country, right? You have got like the French stock exchange, the German stock exchange. The UK is no longer a player in the EU, but they also know their own stock exchange. And so it's like strictly worse probably from a liquidity standpoint and also from a compliance

and regulatory standpoint. I don't think necessarily like I think if you're a farmer, obviously I have like a stake in like a kind of yield protocol and we do some stuff on base. I don't think we're going to do anything on Robin Hood anytime soon, unless they're like at some point to the point previously, if they allow people to get leverage against Robin Hood or other stocks, they like open that up via the chain. I think that's something interesting because brokerage interest rates can be pretty lucrative.

They can oftentimes be like $200. to 400% higher than risk-free rates. And then you could see slight competition there in that maybe capital that otherwise would have been lent to, you know, to like morpho on base for people that are going along, BTC and paying an interest rate in USC instead goes to Robin Hood chain. But I don't think they really right now compete. There would have to be, you know, like the Coinbase. aggressively getting into

Robin Hood's kind of business or Robin Hood getting into Coinbase's business when it comes to base for them to be really fighting, I think. Although, obviously, Coinbase is going to try and push stock trading, so it might be trending that way in the future.

Yeah, I think probably looks there similar long term, is the feeling. How you get there is going to be very different. But I do think like the way I thought about is like if you were to like sciop whoever the product leader is right at a Robinhead or at a coinbase, we're like why are we doing this anyway in the first place? And so, you know, I really think maybe it kind of boils down to three things. So one is you can just offer new types of

financial services when you have an on-chain strategy. So like Theo said, if you're base, you can offer things like Bitcoin back loans, which is powered by by Morphal on base. And I think they've already originated something like $500 million worth of loans, which is a decent amount. And I think for Robin Hood, obviously, it allows them to effectively kind of operate what would be like an exchange, just like in an on-chain way for their tokenized stocks. But eventually you can imagine that they might start doing some really weird and crazy stuff.

like, hey, maybe you can borrow and lend by collateralizing your stock tokens. And maybe you can even borrow USC or even crazier. Like, what if you collateralize Apple stock tokens and start to borrow like Bitcoin or EF or something like that, right? And so I wouldn't be shocked if they went in that direction long term. But ultimately, both effectively get a new form of financial services through going on chain. I think the second thing, too, is it just leads to, a growth of assets and assets under custody or assets on their platforms.

And so for Coinbase, obviously, this helps then grow the USDC supply, right? So when you bar do Bitcoin back loans on Morpho, you're technically generating USDC. And, you know, you effectively can take that anywhere, whether that's back to Coinbase or you can use it on defy on base. And so there's kind of this flywheel effect. And I think there's this interesting outcome where you're actually seeing effectively Coinbase try to make what would be otherwise idle assets more active by putting them on chain. And so they have these things like Rapp Bitcoin or Coinbase Rapp Bitcoin.

And I think they also offer like Rapp Sol and Rath XRP and things like these. And there's a bunch of these now. But I think these are assets that otherwise would have just like sat on like the CoinBious exchange. You know, people are just folding these coins effectively. But now that you have, you know, these different financial services where you can actually make these things more active. Now these users are actually, you know, pressing more buttons, like actually transacting and things like that.

And on chain has kind of allowed him to do that. And so I think on the Robin Hood site, too, you know, obviously kind of goes back to that analogy of, you know, can you collateralize an Apple stock and take, you know, USDC and maybe the Robin Hood trader will take that USC back into the Robin Hood app and then start investing more, right? And so I think there's kind of that sort of creating leverage effect. And then lastly, I think it's just a matter of like, are you accessing users that you never would have gotten otherwise, right? So I think with base, you can go to the on-chain user. You can go to the defy user and actually offer them a product. And also if you're a new crypto developer, you can build applications on base.

And I know that's an area that obviously Coinbase has products in that they care about. And for Robin Hood, too, I think for them, you know, they obviously want to be growing geographically, whether that's a new. Europe or the U.S. And I know that they are very clear like, hey, like on chain is probably the way for us to do that. And I think the benefits that come with being able to tap into users that are part of that crypto economy are also just going to be net positive for Robin Hood as well. So really across those three aspects, you know, new financial services, sort of the growth of assets and then just accessing users that they never would have gotten.

I think those three things are true for both players, right? it's just the way that they're going to be relying on their core competency to really drive the value of all those three vectors, it's going to be different in how they do it. But it's still sort of that same rubric for why they're actually wanting to do those things. All right. I did also want to ask, you might have seen there were some rumors on X that Robin Hood nearly went with Solana. And then at the last minute, Arbitram went out. And, you know, I feel like we saw with the last cycle that, you know, kind of. of the center of activity really was on Solana. And then base ended up kind of getting a lot of sort of, you know, hopefully they don't view this as a pejorative, but like copy activity.

You know, it's like mean coins were, you know, all the rage on Solana. And then they went to base. And, you know, there was just like a lot of stuff where you would see it like the AI agent trend. Like, you know, you would see them spring up on Salana. And then, you know, a similar activity would spring up on base. And, you know, it sort of felt like Coinbase maybe had made a certain bet or, you know, that is maybe a strong word. I don't know. But, you know, they had aligned themselves with like an EVM world and then something happened on a different chain. And I just wondered, you know,

what you thought of the fact that both of them had gone with EVMLL2 chains. And, you know, whether or not you think it sort of backs them into a corner in any way or, you know, how this will affect their ability to compete in the space that a number of companies are converging on. I mean, I think probably an aspect of it is like, and both sides will probably hate this because it does really fit nicely into their narratives. But initially when Base decided to work with the OP stock, it basically won. The OP stack won because OP gave Coinbase an absurd amount of OP tokens in order to

in order to use that stack, which probably made the like chain development costs net positive somehow, which is pretty crazy or like net negative in the sense that like it didn't cost them any money. And I think Robin would probably won, probably they definitely did run a competition. arbitram definitely paid something for this. I'm not convinced that they would have not, they would have just been given this otherwise. But it's also a lot cleaner to do kind of an ethel to than it is to do something on Solana.

In the sense that the way the Solana kind of Mev ecosystem works is pretty messy. The way it basically works with base is that all the mev is functionally internalized by Coinbase themselves instead of having these validators that can that can really mess with how blocks and how prices are streamed, which can also be a very big

regulatory issue for these highly regulated companies. So I think that's just kind of the reality right now is like it's not necessarily even net negative or like net negative net positive for Ethereum or Solana. It's just a reflection of like it's a more controlled sandbox that they can use. Yeah, we had Stephen Goldfetter on the show last week and he basically said it turns, you know, cost into a revenue stream. So Ryan, what's your opinion on this question? There's a lot of different angles. I, my view is basically in any of these major ecosystems,

we're going to have bottoms up and top down. And bottoms up are, you know, your developer community. What are you guys building? What tokens are popular? What people are using, you know, on a day-to-day week-to-week month-to-month basis. But I do think sort of the longer-lasting mode that these ecosystems can build is through a relationship with a large corporate partner. Right. And so, you know, I think people forget, but, you know, prior to FTX's implosion, they were very well aligned with Solana.

right they were offering things like us dc support and stable coin support obviously they were issuing tokens on salana themselves and they're basically investing on a lot of things to make that ecosystem um you know a lot more healthier i would say just from like a liquidity perspective um obviously that unwound but i do think there is some truth of the fact that i think salana wouldn't have gone to where it is right now without some of that support from from a sort of top down corporate player. And so it's been interesting to kind of see that happening within the EVM world with face and Robin Hood. And I think ultimately it's a net positive because you do need both players to start to bring in a lot more activity and sort of familiarity. But I think the actual

sort of effect that this results in is, you know, if you are a company or a corporate company building on one of these chains. Now as you're thinking about staffing or hiring, you know, the types of engineers that work at your companies, naturally you start to hire people that are building on the, you know, crypto stack that your company has chosen to build their products on. Right. So if you are a Coinbase or if you're Robin Hood, chances are like you're hiring a solidity engineer or you're hiring, you know, somebody that's very familiar with EVM.

And I'm sure you still have people that know how to code an SVM and things like that. But those people are going to be more so focused on supporting what is Solana support within the product, which likely will be like Salana trading lists in Salana tokens or like supporting Salana staking. And so I think naturally what ends up happening is if you just look at the composition of the talent in these companies, it will be very skewed towards like, you know, the types of ecosystems that these people are building on. And so I think that, you know, I look at EVM and I look at OPEC and Arbitrum, and I think they're all doing great jobs. And it's been great to see sort of the large corporate players to start to adopt them.

I'd be curious to see how Salana actually reacts and seeing which type of corporate partners that they try to get to build on top of their chain because I do think at a certain point, there is enough sort of momentum that is created in terms of shared tech stack and shared know-how and things like that. where eventually, I think that starts to actually affect how these companies start to really double down on their efforts in terms of the ecosystems that they start going into. Yeah, actually, one thing is just what you were saying about how these companies, for instance, if they're doing an EVM style chain, they would hire a solidity engineer. Stephen Goldfetter was saying that Arbitrum has something called stylus that enables like a Rust engineer, for instance, too. just code up in their language and then it will be the smart contract you know can be written in multiple other languages so um potentially you know that widens i guess the um types of engineers

that they would want to hire so to deo's point um and what you were saying laura about kind of this idea of your your cost becomes your revenue i think that's a very real and underappreciated development actually because you know prior to things like l2s and opi stack and arbitram, it was actually really difficult to launch your own chain because you either had to do it proof of authority. So you were the only person or culturally that would be a little bit taboo to do in crypto at that time or you would actually have to issue a token so that you could do like a proof of state chain. Right. And so I think for these corporates, it's like, okay, well, I'm not ready to take on this cultural heat or two, I don't want to issue a token because that's, you know,

a one way sort of letting the genie out the bottle moment, right, for the corporate could do. And they're not comfortable doing that. But I think what happened when these L2 technologies came out is that it effectively allowed these companies to actually have best of both worlds, right? They could issue their own chain and they could kind of market it as sufficiently decentralized, but they could effectively monetize it like a software product, right? So I think base earns some amount of like, you know, seven or eight figures worth of sequence of

revenue, I would expect, you know, Robin Hood, obviously, to make some of that as well. And so I'd be curious to see how sort of Salana offers this sort of basically similar type of product requirement for a corporate that wants to basically build on Salana. And I think it's possible, by the way. I don't think it's impossible, but that is definitely something that is really underappreciated that the L2 technology is actually allowed for these corporate partners. Yeah. So in a moment, we will talk about some other parts of the Robin Hood announcement last week, but first we'll take a quick word from our sponsors. Hi, I'm Matt Hogan, CIO of Crypto Asset Manager Bitwise.

Look, crypto can be confusing. There's so much noise and the space changes so quickly. That's why every week, I write a five-minute memo on the biggest stories impacting crypto in plain English. Why is Bitcoin up or down? What are people missing? Where should investors look next? Get the lowdown every week. Sign up to get the weekly CIO memo delivered straight to your inbox. Go to bitwiseinvestments.com slash CIO memo. That's bitwiseinvestments.com slash CIO memo. Carefully consider the extreme risks associated with crypto before investing. Wish you could access cash without selling your Bitcoin? Letton makes that possible. The global leader in Bitcoin-backed lending, Luton has issued over $9 billion in loans since 2018 and never lost a single

Satoshi of client assets. Why is a leaden loan different? With custody loans, collateral is not lent out to generate interest, no credit checks, funds in less than 12 hours, no monthly payments, repay whenever you want, with zero penalties. And proof of reserves reports verified by a top accounting firm are published every six months. Letton gives Bitcoin holders a secure, transparent way to unlock liquidity without selling. Learn more at leaden.io. That's LEDN.com. Here's some more comments sounding off on a recent episode. Our recent show was a double header, also featuring Stephen Goldfetter of off-chain labs to discuss Robin Hood's surprise launch of a layer two on the Arbitrum tech stack. On X, D-Fi banked wrote, Robin Hood choosing Arbitrum over Solano wasn't as strategic flex. It was a wet

safety blanket. Let's be honest. This decision screams fear of innovation, not a bold leap forward. 70% of all crypto transactions happen on Solana, not layer 2s, not roll-ups. Robin Hood chose a stack that keeps them in control, not decentralized. This wasn't a tech-driven decision. It was a Tradfai comfort pick. Meanwhile, Lex Soklin said, technical efficiency plus business purpose. If you want your thoughts shared in the pod, write a review of the podcast overall, or leave a comment on our video on YouTube, Farcaster, Or X. All right.

Back to my conversation with Zio and Ryan. So the other two bits, I mean, so we talked about this a little bit, you know, at various points in the conversation, but obviously there's the tokenized stocks a bit from Robin Hood. You know, as we said, they're only launching in Europe just to start with OpenAI and SpaceX. You know, Robin Hood also announced that it's going to be launching perpetual futures, again, only in Europe. and that is a very popular crypto trading product. There was a recent guest on our crypto and macro show Bits and Bips, Thomas U of Gito Labs, who spent 22 years at Jane Street before recently joining Gito.

And he said he thinks that Perps will eat the world. And then meanwhile, in just two weeks, Coinbase is going to be getting into the Perps game. Obviously, they had acquired Deribit. And they'll be launching with Perps. with Bitcoin and Ether on July 21st. And last bit is that, of course, for the tokenized equities. Coinbase, as I mentioned earlier in the show, has requested permission from the SEC to also do tokenized stocks.

So I wondered if you could talk about how you thought these two companies would compete in these arenas. I think it's interesting because in the case of obviously, kind of Coinbase has been pointing to this for a while. they're coming at it from an infrastructure side. They have obviously Coinbase International, which also doesn't do a crazy amount of volume, but actually has a decent amount of all I. I think it's more than half a yard,

half a billion in open interest. They're now going to try and kind of move that into the U.S. I think they're going to face a couple issues. One is that their kind of institutional client base already has a derivatives product that they're familiar with, which is the CME, right? They can trade VTC via the CME. They can trade that via their broker.

It's more familiar. I don't think that a lot of these trading firms, unless there's like obviously a market-making opportunity, are going to have to be using something that's not CME. CME also de facto has the backing of the U.S. government in 19, I think it's 1987, when there was a massive derivatives crash. The U.S. government basically came in and said, derivatives markets will not go bankrupt.

That's not how the how the US market works. Whereas like it's honestly unclear if Coinbase were to start its own product, if the US government would do that, especially say in like a democratic administration. So I think that's something interesting on the institutional side. On the more retail side, I don't think Robin Hood is on their side is going to build their own infrastructure, although I might be wrong. Initially with prediction markets, they worked with interactive brokers, and now they're working with Kalshi.

I actually think it's very likely that either an interactive brokers or Kalshi ends up building a PURPS or PURPS-like product because also technically the CoinBased perps product in the U.S. isn't like traditional perps. I think it's likely that that's kind of how they're going to get it set up. as far as I understand, yeah, they're set up, it's like a five-year expiring. So they just, yeah, they made it different from like how it would be overseas. Yeah, I mean, they basically instead of like making it monthly,

they like made it so that the premium would be, the timeframe would be so long that the premium would basically be baked into the price, which makes sense. And without perps being directly legal. It's like the closest you can get. Yeah, and I'm sorry, I interrupted just to explain that point. I don't know if you had anything else you wanted to add. Yeah, on the derivative side as well, it's also an interesting thing to think about that, like, Robin Hood has been doing derivatives for well over half a decade.

They at one point did almost a double-digit percentage point, double-ditch percentage of like retail options volume in the U.S. And at one point, almost all of the revenue basically came from derivatives trading. If you look at Coinbase, they have yet to really offer a derivatives product to retail customers. So it's an interesting kind of difference that the two companies have in the sense that Robin Hood's crypto business is very new. but also Coinbase's derivatives business is very new and non-US. So they're both in kind of different ways relatively new to the Perps market and both coming in with their own kind of advantages,

whether that be on the user side or on the product side. I personally think that it's more important on the user experience side. So I think Robin Hood will probably take a lot of this market share just because it's where people that are already taking on outsized aggressive risks on leverage, kind of are, if that makes sense. It's where the Wall Street bets guys are. But I don't think that means that Coinbase won't have market share. Yeah, I'm not as knowledgeable about this area.

To be completely honest, I think Dio's much more on the false here. The only thing I'll note is that I think Perps is an extremely competitive market. You know, I think you had, obviously, Binance was the king of this area. And then, you know, Viabit came along, fix the market share. And now obviously, hyperliquid is this sort of big on-chain elephant in the room. And so, yeah, I think there would just continue to be competition. But it's been interesting to kind of see now these big players like Robin Hood and Coinbase start to offer something. And we'll actually see kind of how competition shakes out.

At the same time, though, I do think Perps is a very sort of pro-sumer. product, right? It's kind of in between what I would call, like, your typical sort of consumer that just like trade spot and then the other sort of bigger institutions that maybe are a bit lower risk. Like there's there's this weird sort of gray area in between. And I'm not exactly sure how many users it is, but, you know, it's it's a ton of volume and a ton of sort of business to be had. And so my feeling is that because PURPS is effectively a leveraged product, there probably isn't a ton of traders. There's maybe like maybe I don't know, less than 10,000,

but these 10,000 traders are trading billions, right? And so sort of how do you kind of actually go and be specific about which traders can you then convert onto your platform is going to be, you know, a very sort of ROI exercise of how do you actually win that war? So I'm very positive to see how things are going to go. And also the big unknown is we've never really seen U.S. perps go live for U.S. users. And, you know, one thing I know is perps can be very addictive and popular as a product.

And so I'm very keen to see kind of how that product is actually going to work out in the, you know, the U.S. market. Yeah. I mean, this is something, this is super anecdotal. But Bobby Lee, who, you know, is a very, like, OG crypto person who, yeah, I don't even know what he's up to you now. But many, many years ago, he came on the show. And he, so he's of Chinese descent. And I don't know exactly where he was born, but that part doesn't matter so much. He, I think, like grew up in Africa.

And then I definitely know he went to college in the U.S. because he and I were in the same class at Stanford. And then he went to China and was doing like entrepreneurial things there and then started this exchange called BTCC. But yeah, back in the day when he came on the show, he was just talking about like the differences in culture around trading between Asia and the U.S. It was so interesting. He was just saying like day treating is just like a part of what people do in China.

And he was just saying like, yeah, like everybody, you know, they come home from work and they just are trading stuff. And that's, I mean, I'm not saying that it doesn't happen in the US. It does. But like the percentage of people who are doing that kind of thing is, you know, probably a lot lower just from the way he was describing it. It's more of a kind of conservative like, you know, like index investing or, you know, whatever in the US. So that's, yeah, just when you say you. would be interested to see how the launch in the US goes. Like, that's another thing that I'm also wondering about for that reason.

But I do also think it's like generational. Like I think, yeah, this Gen Z, you know, demo that Robin Hood is going after is like, I think, you know, I think they're different. And basically, yeah, we saw that with the GameStop saga and everything. So before we get to all that, this is kind of like the perfect segue. way because so, you know, it does feel like, I mean, just super broad strokes that, you know, Robin Hood is like more focused specifically on the traderish segment. And then like Coinbase has a ton of other stuff, which we will get to later.

That's more B2B. But, you know, it looks like they are just moving in the direction of more consumer type things and offering more to traders. And obviously we've seen that with base, like that product. has performed really well for them. But in, let's see, nine days' time, they're hosting an event being billed as BAS's next chapter. And the invite for it hints that it will offer a new way to create

and a new social network. Perhaps Ryan knows what this is and maybe you can't talk about it. I don't know. But I just wondered, like, you know, even if I think about things like the whole James Wind saga and hyperliquid and just like this mashup of it feels like, you know, kind of social plus trading. You know, like just the fact that they say that this

basis next chapter includes something like a new social network. Like, you know, I'd be curious to hear, you know, what you think they should do or like what this space is going to look like and how they could compete with Robin Hood. You know, maybe Robin Hood isn't quite, quote, quote, quote, social yet, but, you know, it has that sort of gamified experience. So, Dio, maybe you can start. it is kind of interesting that Robin Hood and kind of Wall Street bets and some of these other forums are kind of inextricably linked, but it's obviously not necessarily within Robin Hood's control either, right? It's on Reddit. It's on these other platforms. I do think that they also, the way they make, have done their design is like super, like, to my knowledge,

I don't use Coinbase a lot. Coinbase compliance tends to be after me for whatever reason. Like asking, you know, for proof that I got paid allowance as a child and for a signed and dated form to show that. But on Robin Hood, they have a lot of things that are gamified in the design. That's, like, perfect for you to post. Like, your P&L, like, there was all these famous PNL or, like, portfolio, PNL.

screenshots of them being in the negative, which is not supposed to happen. I, like, you're negative $200,000. Or like your pot, you start at like 100 and then you go to a million. And then these are perfectly built to be kind of shared. I think that to an extent, Coinbase has the right idea and that if they can kind of try and own the social side of that and make it so that these kinds of people can interact more directly with them, and still also be social, it makes a lot of sense.

I've yet to see any real, like, company succeed on the social side. Like, even, like, Instagram trying to copy Twitter, right? And in theory, they have the user base, and they decided to make thread or threads. It didn't really work. So I think it makes a lot of sense for a lot of reasons. and the social side, like Bybit and Asia, to your point before, about how there's a lot more

people that use these kinds of trading products in Asia, partially maybe because gambling's illegal in most countries in Asia. So the best thing you can do is, you know, 50x leverage long bong, right? But I think like Bybit basically became a thing because they had a really good referral system, which was them kind of trying to hack the social side. So I do think that, I don't think that either side will succeed if they try and make their own social product,

but I do think that it's actually important how they manage kind of getting people to, not necessarily naturally, but kind of in an unprompted way, pushing their products forward. I think that will be interesting to see. I think right now, for example, Robin Hood kind of has better design for that. and Coinbase is kind of catching up.

Yeah, I think like directionally, sort of this intersection of like social finance is still being figured out, right? Like, and this is not even like a crypto thing. This is like, you know, imagine when you first downloaded VEMO, there's like a social feed and I was like, why do I meet this, you know? So I think there's going to be continued experimentation. I think there are these two large concepts that people think, should work out somehow eventually. But up until now, I don't think there's been any sort of

breakout way that I've seen at least personally. But I think if I had to take a step back, what tends to work, I think, is being extremely specific about the feedback route that the social aspect has on the financial sort of decision making. Right. And so, you know, if you think about a pumpout fund that's an extremely social app actually but what is the goal the goal is to get enough liquidity so like you get out of the bonding curve right so there's this kind of like um sort of coalescing sort of factor that goes into that social community um the others like hey we run this like i don't know trading we check group and we talk about the tokens that you know we're going to be investing in things like that so there's like a very clear outcome there right and so um there's

the form factor I think has to be a way in which there is like a very clear outcome and almost like this gamified aspect of how you actually get to that. And one thing that I found very interesting was actually the announcement of Polymarket integrating with X. And I could actually sort of reason through that in an intuitive way because, you know, I'll get, I get most of my news from from X and especially the real time stuff. now imagine you can actually sort of bet on the market that that news is related to, right? So, you know, some world event happens and, you know, there's basically a direct button under that, you know, tweet or ex-posts where you can then, like, you know, bet on that thing, right? And so there's going to be continued experimentation. My view is that whether it's in sort of the traditional world or whether it's in crypto world, it could probably come from either side, to be on. honest, but my feeling is it probably will be powered by crypto rails just because of the sort of

the feedback loop that is required in their technology and infrastructure for, you know, seamless settlement and looking at past history and, you know, creating more rich data around those things, you know, whether that's going to come from a coinemese or Robin Hood or whether that's going to come from a policy or somebody else. Like, it will 100% be built on crypto rails is my, at least let the bet that I'm willing to make that I feel comfortable on. even if I don't know, like, what the actual sort of social form factor is actually going to be looking like. Yeah, this is one area where, you know, Robin Hood already does have event contracts. And Coinbase actually hasn't announced anything related to that.

So it's kind of interesting. I actually don't know. Ryan, maybe you know. I don't know if there's like some regulatory reason for why that would be or either of you. I mean, I think there's different, right now, Kalshi, kind of the way Kauci is different from Polymarket. Polymarket in theory can't operate in the U.S. They just raised from Founders Fund.

The objective of that raise was basically to get Peter Thiel on board to fix the fact that they can't operate in the U.S. right now. So that will probably change. Their approach is also very different. Polymarket kind of takes a very very very. direct approach at trying to control the user, basically, like, control the user and the infrastructure. Kalshi, obviously by working with Robin Hood and by working with other people, want to own

the infrastructure, but not necessarily the user. So I think it could be an interesting scenario where, like, the licensing, et cetera, is just not as interesting for a coin base, given that, you know, if you compare the volume and the revenue that these companies make to what a Coinbase makes, it's not, it's pretty trivial. And for them to be able to just plug into something like a Cali, get like 80% of the revenue without having to really do that much. And also knowing that like Cali's as a business model isn't really going to compete with them, I think that probably makes more sense than them trying to like build something entirely from scratch. That's kind of my good feeling.

And my gut feeling is also probably it's not as big of a priority for them. It's like hyper-liquid deciding that they don't really want to get the yield on their USDC. There's kind of other issues that they're focusing on. Yeah, I'm not really aware of the legals and the regulatory. And that's probably an episode for a lawyer to talk to. One thing I do find interesting, though, is there is this interesting dynamic where if you are on chain, you can make the argument of decentralization. And in some ways,

that allows you effectively to operate more as a protocol and less as like an application in a lot of ways. And I think that that is actually one of the beautiful parts of on chain is that as a front end integrator, whether you're a coinbase or Robin Hood or even like a wallet, like a metamask, you actually probably don't have to take as much liable. ability because you're not actually operating the underlying protocol.

You're effectively just acting as the connected tissue or the wallet layer or the sort of provisioning the technology to effectively allow users to still use a lot of those products. But, you know, in a way that doesn't kind of get you, let's say, in trouble for actually operating the underlying thing. And so I do think there is actually a huge sort of. arbitrage in that way for these products to be able to actually still go live and still not have to KIC on the protocol side, but also allow the users that or the platforms that do own

the KYC on the front end to still, you know, letting users to like play on chain, right? Because, you know, if you're front end, you can always make the case, hey, like, I don't really control, like, what my user does with their wallet or their funds. Like, that's their choice. That's what they do. Like, I just effectively operate the wallet. And so, you know, I expect that kind of to play out over time as well to see like what arguments or what line is actually being drawn of like, what is custodial, what's not custodial? And what type of responsibility does that give you basically as the front end and actually giving that user experience and that user access to that product?

Yeah, one thing that looks like will be a bit of a differentiator in how Coinbase and Robin Hood compete generally is. It looks like Coinbase just has a lot more B-to-B offerings. So they just announced this Coinbase payments service, which is, you know, that was like linked to the Shopify announcement. And, you know, it's basically a stable coin payment stack designed for commerce platforms. So, you know, it offers merchants like instant 24-7 USDC payments. It's built on base. You know, it offers them like stable coin checkout.

the API for the merchants to handle like authorization refunds, etc. There's all kinds of like back end type stuff. They also have a similar offering, Coinbase business for startups. Then they also have their crypto as a service product, which is for, you know, institutions like banks and brokers and exchanges and for payment firms, you know,

for like custody, brokerage, like, you know, those kinds of players. So, you know, it looks like, like Robin Hood, yeah, at this moment, at least on the surface, is more targeted to the retail users. But of course, they have a very different business model, which is the payment for order flow business model. So in that regard, they also have institutions just in a very different way. So I wondered if you could just talk about, you know, where you see them just like diverging generally in their, you know, in the ways that they engage in their crypto activity.

I mean, obviously, Coinbase, everything they're doing is crypto. But yeah, just how do you see that affecting sort of like their overall market cap and the overall health of their business? I mean, I think that with Coinbase, to an extent you can see this with like almost every major crypto exchange, they do a lot. lot of things that in traditional, like, if you look at Robin Hood's flow of funds, like, say, I place an order for Apple on Robin Hood, that order kind of goes through Robin Hood, but then it gets sold to Citadel, and then Citadel might settle it on an exchange, and then, or clear, like,

basically, like, sell its exposure and not settle. And then the actual clearing of that exchange is then another company. So there's, like, five companies involved. Whereas with Coinbase right now, you know, you interact with Coinbase on the user-facing side. The exchange is Coinbase. The execution side might be helped, but Coinbase has an execution kind of desk built in when they bought to GoMe. My gut feeling is that probably that can either be a benefit or a really big curse. You can either be like something like Amazon or Google that does all of these things pretty well, or you can be AOL, or you do a lot of things decent enough, but not well. And I think right now, at least when it comes to the derivative side,

it's going to be very hard to compete with losing kind of your clients to CME and these kind of established industry behemoths. But when it comes to spot trading, it's probably a lot more likely that kind of Coinbase holds on to that basically monopoly in the U.S. On the circle side, it makes a bunch of sense for them to push payments because, and I should probably say I have some circle exposure that I bought pre-IPO that I'm still locked into for like six months. But I think it makes a lot of sense.

The contract probably is going to run out relatively soon. Coinbase doesn't want to lose out on almost half a million in revenue that they get right now by that contract being renegotiated. So they want to kind of push circle as much as they can. Also, they have a significant share of circle stock, of circle stock. So I kind of think that's the kind of position they're in. They either have to, I think they're probably going to, it would be very strategic for them to shed a bunch of the businesses that probably

they're not going to do as well in and just focus on the ones that do well. because in the meantime, if you look at Robin Hood, basically everything that they do, they do really well. When trading kind of went down, they went really hard into savings, and suddenly savings was like 30% of their revenue, basically overnight. And I think they're now trying to basically do the same thing

by expanding pretty aggressively into crypto and crypto derivatives. Yeah, I think if I had to kind of summarize at a high level, ultimately, you know, I think Robin Hood is very much in the business of crypto is trading. And I think Coinbase's view is a little bit more broader than that of, hey, we don't, crypto can become a lot of different things. And whatever it becomes will be a piece of that effectively. Right. And so I think that's really sort of the sand in the road, or sorry, the line in the road, at least if you had to like kind of categorize.

the two, but really at the end of the day, I think they're both really driven by very similar things. Because if you're a player like a Coinbase or Robin Hood, there's really only two businesses that you're running. You're either in the business of flows or you're in the business of tokenization. Right. So if you're in the business of flows for somebody like a Coinbase, you know, like the KPI that I use, for example, is how much crypto assets do you actually have on your platform? And I believe Coinbase that last report number was something like $300 billion, something like that. that's like 10% of all cryptocurrency cat, which is a crazy number. Just think about that for a second.

Whereas Robin Hood, I don't think they really release these numbers, but if you kind of prorate the amount of volume and stuff that they have, this is probably like 10x less than point based. I would guess, guesstimate. And so you kind of have to ask for stuff, okay, like in the business of flows, like how do you kind of create this continuous growth cycle so that you are still within that business?

acquisition. And just like three things I would mention there is like, okay, so for one, Bitcoin, right? Coinbase owns a lot of Bitcoin through the Zappro acquisition. Through the Bitcoin ETFs, I think they basically cost to like eight of the top 10. That's just continuous flow of Bitcoin that will continue to go into Coinbase. On the Ethereum side, you know, Coinbase is obviously a huge staker of Ethereum and base is now basically sucking all the liquidity on Ethereum onto their own platform. So that's also a positive aspect. And if If you look at everything else, like all the other tokens that Coinbase lists, effectively Coinbase can offer custody and trading services. And they can effectively go to the investors and VCs and the teams that are issuing those tokens, which let's say it's around like 30 to 40 percent of total token supply. And they can actually offer them a service and get those tokens on their platform. Right. So there's a much stronger case for Coinbase, I think, in terms of like actually having leverage and being really upstreaming

creating that flow. And unsurprisingly, you know, with Robin Hood, I think they're relying more so on their existing user base to like get richer offer crypto, but also finding ways to steal sort of custody and coins from other platforms. And I believe in the announcement last week, actually, Robin Hood said, like, if you deposit like your crypto onto us, like, we'll match it with some, some offer. I haven't read too deeply into it. But, you know, that is the show. It'll give you like an extra 3%. Yeah. Yeah, exactly. And, you know, that, them understanding, you know, the business of flows and, you know, they need to be in that. You know, just the last point is, this is on the business of tokenization is actually really important

for these companies because for Coinbase is actually quite simple. It's USC, right? They're issuing and tokenizing dollars through USC, and they effectively make revenue on that. But also, you have to understand they are in the business of tokenization, too, when it comes to base, because if you are issuing, you. chewing tokens on top of base, that automatically has better compatibility within Coinbase's product suite. And I think they recently announced that's trading, which effectively would allow, you know, Coinbase users to trade, you know, tokens on chain. And they don't actually have to

list those tokens. And those are probably going to be base tokens, you know, to start. And so I think for Robin Hood, they're taking a very similar approach, but for tokenizing stocks, just to bring it back to kind of like the original question, Laura, at the beginning. And so it'll be interested to see kind of what Robin Hood also ends up doing in the business of tokenization. He's very interested to see what they do with stable coins, very interested to see like how they start to merge, you know, what they're doing with Robin Hood chain and the tokenized stocks. But ultimately, how do they mix that with the crypto side of the business and growing the crypto side of the business? And so those are kind of the things that are in my mind. And so I think Poimus is extremely well positioned already on both of those things.

I think Robin Hood has a lot of growth left in front of them, but I wouldn't bet against Robin Hood doing a good job in terms of really accelerating on both of those fronts as well. Yeah, just speaking about the stable coin piece, I mean, the fact that like, you know, more than half of circles revenue goes to coin base. It's, you know, 100, I think it's 100% of everything on USC and then 50% of all other USC. and that's up for renegotiation next year. And so I could imagine Coinbase negotiating better terms even. So, Ryan, you just wrote about this. You said that you felt that Coinbase should have acquired Circle. Do you want to talk about that?

And I don't know if you looked into Robin Hood's USDG. You know, it's like a coin. And they're not the only ones that, you know, it's like a Paxos coin. And there are some other players. but I imagine that they're going to be going in that direction as well. So, yeah, maybe just talk about your piece on why you thought that Coinbase should have bought circle and we can talk about how Coinbase might, or how Robin Hood might try to

get into the stable coin game. Yeah, I mean, out of their high level, it's very simple. Number one, USDC is now the second largest revenue driver for Coinbase. And so it's a core product for them. And they need to win there. two is you're dealing with this other stateholder. And it's just annoying, right? Like you don't own product strategy.

You don't own roadmap. I'm sure there's a lot of detail things. I'm not privy to, but it's just annoying when there's this extremely important product for you and you have to deal with somebody else that, like, you have to work with and always negotiate with and things like that. And then lastly, my feeling is I think most of the growth in USC so far,

especially recently and probably going forward is likely going to be driven by Coinbase. And so every sort of BD deal you do or every resource that you put into growing use at USCU effectively are nerved by only getting half of the ROI on it. Right. And so I think for all these reasons, it makes sense for this to, you know, just be folded under one umbrella. But obviously now circles, you know, public and they're very, you know, their stocks, stocks are like crazy. And so, yeah, it's just a question of like how you would actually sort of execute a deal like that.

I'm not really sure I'm not pretty due to those conversations. But just conceptually, if you think about it, it's something that should probably read me or in house. And my view is also just regulatory speaking. If point-based is the JP Morgan, let's say, a crypto and USC does become almost this like enthrined regulated product, almost like in a banking product sense. that's something you need to 0 100%. And my view is USC when it's all done, let's say in like 10, 15, 20 years, it probably still will continue to be like a top three stable coin. And basically buying the rights to that now is very cheap versus like 10 to 20 years later.

And so, you know, knowing that Robin Hood is also trying to get in the stable coin game. So the other players that have backed this USDG, the global dollar, is, they're cracking and MasterCard or some of the others. And it's going to start, or it, well, I think as last week, it started trading in the European Union. But, you know, I don't know if you have thoughts on, you know, how Robin Hood or USG should try to compete. I guess really what it would be would be like stable coin revenues for themselves,

but basically it would have to be that they also have to, you know, push USG to wider usage. and more competitiveness with USC. I know if either of you have thoughts on that. Yeah. So just based on everything I've said about point based in circle, the TLDR is consortions are very hard. They're extremely, extremely hard. And it's like a relationship that's like there's always one person doing more of the work

and the only person doing less of the work. And how do you sort of program a way in which you're sharing value and cost structure in a way that is actually sort of forward-looking and also, you know, backwards looking as well at the same time. It's very, very hard. And so I look at the partners in that thing and I'm like, yeah, sure, like these are probably all the right partners to have. But, you know, when push comes to shove, let's say in like a year or two years time, it'll be very clear, like, who did more of the work and who did less of the work. And the people that did more of the work feel like, wait, we should have more of this. And the people that did less of the work

probably feel like, wait, like, you know, why aren't we doing as good of a job? Like, and then obviously things depend and negotiations happen. So my view of, my view of, of this is that I think it's probably a foot in the door for these players to start to actually understand like how to understand stable coins as a product within their own growth roadmaps because they're probably not extremely clear on that yet. But there will be a point in time when it does become very clear to them at least from a product or business perspective. And then at that point I would expect maybe some of these players to just break off and like issue their own stable coins and things like that. And so yeah, I'd be very curious at least

the thing that I'm waiting for is how Stripe is actually going to approach this, you know, as effectively a B2B player where, you know, they're in a position to effectively issue stable points for all their clients. And I think that'll actually be a very important data point for how we can understand, like, how players can play nice with each other or how issuers actually just become single issuers over time. And I'm sure a lot of them are also just waiting and seeing how things are going to pan out. Yeah, it's really a thing for Coinbase. So I know you no longer work at Coinbase, but if he did still work at Coinbase, what would you be concerned about when it comes to Stripe?

I do think that there is this question of how valuable is a B2B product to be on chain. And I think my view of most crypto startups is I don't think there's a lot of juice to squeeze on that side, just offering sort of B2B services for like crypto companies. because there's, in my opinion, there's too few of them that actually make a ton of money. And as a result, there's not enough like B2B or SaaS fees that they can actually turn on to make it meaningfully relevant, right? At least like at a very huge, huge outcome. I think what's been interesting with Stripe is that they don't have to service crypto companies. They're just servicing the companies that they've already been servicing.

This just becomes more of an efficiency play for them. and also a revenue of mock opportunity for them. And so it becomes very interesting because for the first time, you can actually throw crypto as a growth lever on an existing distribution base versus I think maybe the converse is trying to sell a product to, you know, a segment of the market that is still kind of proving itself out. And so I'd be very curious to see how a lot of this activation happens

over the next, let's say, six to 12 months. And I also want to just see like, much on-chain activity that this actually ends up translating to us. And there's a very real chance. Let's say that, you know, let's say Sprite turns it on for 20% of their clients. And it turns out that that amount is like GMV and volume and stable coins is like nothing that we've ever even seen before in crypto yet. Right. And so I'm very excited actually to see what Sprite does. And I think it'll be, it'll be a huge domino effect actually for the rest of fintech, as well as, you know, effects on Coinbase and Robin Hood and all the other companies.

Yeah, I don't know if you guys saw that company Air Wallachs, where the guy, the CEO Jack Zhang, I think his name was, was dismissing stable coins. And then a bunch of crypto people responded to him explaining what the use is for them. And then yesterday I saw on Twitter somebody posted that they have a job opening out for a stable coin engineer. Anyway, so I last question that I just wanted to ask. So, you know, you reference or one of you referenced this very briefly, where now the Dex tokens on base will be automatically available for trading on Coinbase. And I'm sure you're very well aware. Like even at this moment in time, Robin Hood has a much more limited list of crypto tokens

that you can access on the platform. And I just wondered, you know, kind of on that score, like, how do you think they should try to compete with Coinbase? Do you think it doesn't matter? You know, do you think, like, for instance, just the fact that they have more of a trading culture and they'll make up for it in volume? Or what are your thoughts on that? I think that the Robin Hood guys are pretty impressive and that they're very, very obsessive over product. And, like, basically trying to control everything that they can to make. sure that the user experience is really good.

At one point, there was talk that Robin Hood was going to launch a chain and that anyone was going to be able to trade via Robin Hood on this chain. It wasn't clear if that was like in a wallet kind of sense or directly via the app, but that was kind of always in tone. I think that they probably saw that at the end of the day, users don't necessarily care for semantics. or even the truth, right? It doesn't matter that like bald on base isn't actually run by Brian Armstrong.

If token go down or token get rugged, user, you know, Monkey Sad. And they'll, the only person to really yell at is not like in a non-dev, but it's, you know, Brian Armstrong. It's a coin base or it's Robin Hood in this case. I have a feeling that the Robin Hood guys, since their chain is like set up in such a an aggressive way. It is literally a Fed chain. Everything's tied to like a real person, real address, everything's permissioned.

They're kind of trying to avoid these types of just very aggressive pump and dumps and just scans, probably for regulatory reasons, but as well, but more so for the user experience. Because also we even saw it with, I think, Zora on base where the price started to dump and all of crypto Twitter was basically yelling at, Jesse and everyone else on base kind of blaming them for the price action when obviously Coinbase didn't really

have anything to do with the price action. So I think that that's kind of like Coinbase is very much more in the ethos of crypto of like hey like probably they'll let like let a lot of this kind of stuff happen probably in like a separate or

differentiated product whereas Robin Hood I think will much more try and control that and it'll be interesting to see if you know potentially that actually can get users that might be more willing to do riskier things away from Robinhood and towards Coinbase. Or I might have the opposite effect where people just get upset that, you know, they lost money on Coinbase even though, and something that they felt was supported in quotes by Coinbase, even though it wasn't actually meant to be like that as a product.

Yeah, I've thought about this a lot. The way I think about it is there's base, there's large cap tokens and there are small cap tokens. And large cap tokens drive most of the volume and revenue. So if you actually go to Coinbase exchange, I think, 24-hour volume or 70-day volume, the top five pairs contribute it like 70% of the volume to the exchange. So if you're at Robin Hood and you also list those five tokens, you're basically covered. Like you're making money on most of what's happening in crypto anyway. And that is a fact for sure.

The question I always have is how valuable is it to be able to monetize them with small cap tokens. And my feeling is if you have a ton of these things, there's a ton of money to be made. And what changed my mind about that was actually Pump.com.com. Fun is in the business of making money on small cap tokens. And they've nine figure run rate. And so as Coinbase, I think now you can get best of both worlds, right? you obviously have large cap tokens that you're training on your exchange. But if there are any small cap tokens that come onto base, now users can actually buy those things and Coinbase benefits,

either from like a sequence of revenue perspective or even like a broker fee perspective or something like that. And so I think it puts Coinbase in a very great position. But what that assumes is that base has a healthy ecosystem of small cap tokens and this continuous effect. And as DO is saying, it sounds like that's still early days. And they still need to prove that out. And so if I'm Robin Hood, you're probably okay just dealing with large cap tokens for a while.

But eventually, you know, I think they'll probably have to ask themselves like, okay, is it worth a bet for us to also create kind of like our own small cap token economy and how do we play in that area? And so, yeah, it's definitely an assumption on like where you want to play and how much money do you think can come from each of those things. But for now, I think both of them are very well covered on a large cap. It's just a question of, you know, how big can small cap become and when do you actually want to invest to like own that pipeline or own that sort of process. And I think going to base is definitely ahead of them in that aspect. All right. Is there anything else I didn't ask about, you know, it doesn't even have to be just about Coinbase and Robin Hood. But, you know, Ryan, you mentioned X. And CEO Linda Yakarino did say that they want to try to make it, you know, everything happened

and there will be financial components and all that. So I don't know if you have just any other thoughts generally about like this. What looks like to be sort of the next phase of, you know, kind of crypto adoption, basically the competition in that space. I'm really excited. I think this is like one of the most interesting and exciting times for crypto. And the reason why I say that is we've gotten to this point from 2017 up until now. mostly like buy us for us, right?

Like all the use cases that crypto came up with, we were also the users of at the same time. And we were able to survive as an industry and build this industry to the point of three trillion dollars in crypto market cap, BlackRock's doing Bitcoin ETFs. Like, you know, we've gotten to this point. But we've now gotten to the place

where we've created all this infrastructure for on-chain and demand for block space. But I don't think crypto, by ourselves can fill all that demand right now. And so I think it's coming at a perfect time for these large incumbents like the coinbase or Robin Hood or a stride or even telegram in time where they're actually starting to show basically like how much demand can you actually handle on chain. And effectively the fundamentals and the business case that you can actually have building

an on-shame product is going to become a lot more clear now. And I always like to say like we since 2017, we've, grown like hundreds of things at the wall and maybe five to ten of those things have stuck. And now we actually have the privilege of having those five to ten things being turbocharged with distribution by these players that understand the actual benefits that come with that. And so I'm really, really excited. I know there are debates of like centralization and decentralization and all those things that the community is probably working through right now.

But my sense is the next phase of growth will be coming from these incumbents. And I wouldn't be shocked if really this next like full cycle really starts to get propagated through all the on-chain activity that is coming from these dupils. So I'm very, very excited, actually, for the chapter of Kirkgo. I think the stripe thing is pretty interesting in general. I know on X specifically, I think that it'll take a while. I know at one point there was the ability you could send Sats to people in the pre-Eon times. I think that there's a couple issues with that. One, I think X is a little bit less reliable than some people would like.

I remember editing an article in the actual article form, and I have the article fully done, and then publishing it, and it basically giving like an older version from like two days, but previously. And no matter what I could do, I couldn't change it. And also, you know, there's all the sim swapping, all the, kind of admin abuse and these kinds of things. I think that makes on Ex's side it pretty hard for people to trust it with your money. But I do think that like, for example, with Stripe, there's a lot of very interesting things.

Actually, literally the other day, we were talking with someone who runs a merchant cash advance business, so basically a lending business in Europe. and they use control over these companies, stripe accounts basically, like functionally their revenue to collect these debts. And that's actually a very high interest, very interesting way to potentially make a return on capital. That's also competitive enough for crypto markets,

to the point where you could get pools made, etc. So I think there are going to be interesting situations like that where it's a little bit of a regulatory ARB to an extent, because like merchant cash advance is basically a thing in Europe because of the regulations. And there's going to be a lot of companies that basically, like for Stripe, functionally stable coins,

let them do a lot of their core business cheaper. Like they're not doing this as like a new kind of business. In reality, it's just a way for them to make their existing infrastructure a lot more efficient. And I think you're going to see a lot more companies. doing that. Like Starbucks is also basically a bank to an extent because of all the reward cards that go unused. You could probably see that in the back end turned into a stable coin or something like that. I think that would make a lot of sense for a lot of

companies. Yeah. Yeah. And clearly they're very crypto forward because they've done already like a bunch of different things like with NFTs and stuff. All right. Well, it's been such a pleasure having you both on Unchained. Where can people learn more? about each of you and your work? Yeah, I mean, I'm on Twitter at Diogenes Casares. I basically post everything there. So if you want to follow anything, I write very long articles. So if you want to follow sleep, I've got plenty of those.

Yeah, same. I'm on Twitter at E. Ryan, Y, I, R-I-R-A-N. And, yeah, I've been kind of quiet, but I'll be a highly publishing I've been reading Eiff's journal articles. So you can read Dio and my work and fall asleep to it. So it would be a good slum of party. All right. Well, thank you both so much for coming on Unchained. Thanks for having us. Thank you.

Thanks so much for joining us today. To learn more about Dio, Ryan, and the competition between Coinbase and Robert Hood, check at the show us for this episode. Unchained is produced by me, Laura Shin, built from Matt Pilchard, Ryan Omanovich, Pamajumdar, and Margaret Curia. listening.