Unchained - Why Robinhood CEO Vlad Tenev Is Betting Big on Crypto, Stablecoins, and Prediction Markets - Ep. 754

Starting point is 00:00:00 I think the first benefits of adopting crypto technology for more things, including real-world assets, are going to be lowering the costs for the companies and improving the margins. But the kind of down-the-road impact will be passing that on to users with even more value and lower cost of investing. So the ultimate cost borne by users will decrease over time, which is going to make an impact long-term on their portfolio returns and their retirement savings. And I think Robin Wood can really help accelerate that. Our approach has always been to not use technology to improve our margins, but really use

Starting point is 00:00:39 technology to operate sustainably at lower margins than our peers and pass back that value to customers. Hi, everyone, welcome to Unchained, your no-hype resource for all things crypto. I'm your host, Laura Shin. We are now featuring quotes from listeners on the show. Today we have one from DefyNPC Man on today's episode with Athena Labs' Guy Young. Defy NBC Man said, interesting Athena podcast from at Laura Shin, but very disappointed in Guy's answer on SUSDE on L2s. His answer was basically, quote, people only use it for farming a token and there probably isn't any demand for it.

Starting point is 00:01:19 Unquote. Defy NPC Man then commented, how about the billions of USDC and Arbitrum, which has a token. Stay tuned for the mid-roll to hear what Guy had to say in response. To have your comment featured, write a review of the podcast overall or leave a comment on our video on YouTube or X. This is the December 20th, 24 episode of Unchained. Earn a 20-plus percent APR on ETH with high gain by Kelp, leveraging blue-chip DeFi strategies and professional risk management. Deposit now at www. kelpdow.xy-Z. Pocodod is the original and leading layer zero blockchain with over 2,000 plus developers,

Starting point is 00:01:59 and the Pocodot 2.0 upgrade will be a massive accelerator for the ecosystem. Join the community at Pocodot.network slash ecosystem slash community. Today's guest is Vlad Tenev, CEO of Robin Hood. Welcome, Vlad. Good to see you, Laura. Thanks for having me. Before we begin, I want to disclose that Robin Hood is an active sponsor of the Tuesday episodes of Unchained. However, this episode with Flad is not sponsored content and all of my questions were independently crafted. 2024 was quite the year for crypto in so many ways. And Robin Hood was a major beneficiary of the positive turn that the crypto industry has seen.

Starting point is 00:02:37 And I was wondering, what are some of the major accomplishments Robin Hood saw from its crypto business in 2024? Yeah, I think the crypto business has been firing on all cylinders, really. We have a great team, a great GM, Johan, who's been running. it and we've had some constraints over the past few years. I wasn't shy about talking about how the current administration and the SEC has really tried to strangle crypto in the U.S. And we didn't let that. I think that was disappointing and we were unhappy with it, but we didn't let it keep our business stagnant. So we used that opportunity to launch in the EU where we went live with crypto just about a year ago. We've been growing that business. We've been

Starting point is 00:03:28 trying out things over there that perhaps have been a little bit more difficult here, like more tokens, more services like staking for our customers. And yeah, more recently, we've been able to get a little bit more aggressive with the offerings. So we've listed more coins. Customers have asked for more selection from our crypto products. They want to be able to trade all the things that they can trade on other platforms, on Robin Hood as well. And I think that's all coalesced together to lead to a really strong November. We announced some November metrics for the crypto business. volumes were up over 500% from October. And October was actually a a very strong month as well.

Starting point is 00:04:23 So I think on the retail side, Robin Hood has basically been gaining market share using the value props of really strong pricing and the fact that all of your investments and financial needs can be met in one place. And we've been seeing really, really good market share gains because of that. And now we're kind of looking ahead to 2025.

Starting point is 00:04:46 We made an arrangement to acquire Bit Stamp, which is one of the, I think, the longest continually running crypto exchange. So I think for us getting deeper into the space, vertically integrating, providing more options for customers is the main priority going into next year. And, you know, as you mentioned, trading in crypto skyrocketed on Robin Hood month over month from October to November. And I'm sure, you know, most people listening to the show would know that the external factor that drove a lot of that was the victory by Donald Trump, the first pro-crypto candidate,

Starting point is 00:05:20 the first pro-crypto nominee in a presidential election. And I was curious, like, internally what you were seeing in terms of, you know, what it was that Robin Hood crypto users were most interested in, you know, how that translated to trading volumes, et cetera. Yeah, it was interesting. I think juxtaposing this election night, which was a very busy night for Robin Hood. I mean, we had multiple teams that were monitoring heavy usage across multiple products. We had crypto, which obviously reacted to the news of Trump being more likely to win the election quite early. The equities markets, which we now offered 24-hour trading in over 1,000 U.S. equities, they were responding as well. Then we also had a product called presidential election market, which allows,

Starting point is 00:06:12 customers to trade event contracts on the election. And that was just having very, very high volume as well. Really an insane volume. We did over half a billion contracts in that, even though we launched a week before the election. So juxtaposing that, maybe around the first time you and I met, the 2016 election where Robin Hood users

Starting point is 00:06:41 and Robinhood itself felt very much like a spectator in the election. I mean, markets closed at, you know, 1 p.m. Pacific in the afternoon. Then the election happened and, you know, customers could queue their orders for the next morning, but they really couldn't trade through the night as some of the institutions could. So, yeah, it was heavy volume and a lot of trading across multiple product lines. And, you know, in general, I also wondered about the, you know, earlier wave that we saw this year, kind of the beginning of this whole sort of crypto bull market, which was the launch of the Bitcoin ETFs. And you guys offered that right away. And I wondered, you know, between that and also the spot, ether ETFs, you know, how popular the crypto ETFs have been on your platform. And whether or not any of the trading of those has affected your spot trading business. Yeah, we didn't see any noticeable cannibalization. And I think part of that is because Spot was available on Robin Hood, it didn't lead to much of a behavior change for us as a retail-focused platform.

Starting point is 00:07:56 So people have just been used to being able to access these products in the Spot Forum for many, many years now. And it wasn't much of a new thing. Of course, it opened up the possibility to hold it in retirement accounts, and that's strictly accretive to the business. But, yeah, in terms of massive movements away from trading spot to ETFs, we didn't see anything like that. And now a couple weeks ago, we had the launch of options on the Bitcoin ETFs, which is also interesting. So that one we're kind of keenly watching because that allows some customers to take different types of. of positions. You can you can take long positions as well as short positions and it opens up a new type of active trading behavior that was difficult before. And actually for the people who were

Starting point is 00:08:51 trading the crypto ETFs, but actually also the options, were you finding that it tended to be people who were already into trading spot crypto who also gravitated to those or was it more kind of your trad-fi customers who kind of dip their toes in a crypto with the ETFs. Yeah, so one of the things that Bitcoin ETFs opened up on Robin Hood is investing in Bitcoin in retirement accounts. And I think for some customers, they view Bitcoin and Ether as a long-term investment. They want a part of their retirement portfolio. It is still the most commonly used recurring investment on the platform. So folks are dollar cost averaging into Bitcoin as they do with other instruments. And I think that was really the big unlock since Robin Hood allows you to

Starting point is 00:09:47 not just have a trading account, but you can have a retirement account as well. It opened up this new asset class to a whole group of buy and hold long-term investors that are that are using our products to save for retirement. And retirement's done. quite well. Also, it crossed 10 billion in assets. It's close to a 10x increase in total assets under custody from a year ago. So that that product has just resonated very strongly with our customers. And I think it's still, you know, having access to crypto in your retirement account is a new thing that, you know, not every service offers. All right. So in a moment, we're going to talk a little bit more about user behavior on the platform. But first, a quick

Starting point is 00:10:31 where from the sponsors we can make the show possible. High Growth Vault by Kelp helps you get some of the highest, immediately realizable ETH rewards by leveraging Blue Chip strategies with RS-ETH across AVE, Pendle, Usual, and Elixir, managed by strategy experts, ultra-yield, and upshift. All it takes is one click to unlock, 20 plus percent APR on ETH. Deposit ETH, STEth, ETH, or RS-Eth.

Starting point is 00:10:58 receive H-G-Eath, a reward-bearing liquid token, and participate in D-Fi across Pendle, balancer, and more. Watch your D-Fi rewards grow while stacking even more yields. No more bad trips, only the highest rewards. Deposit now at www.keltow.xy. At the beginning of the show, I mentioned a criticism that listener Defy and PC Man made about Guy Young's comments about why S-U-S-U-S-D-E had not expanded to some layer twos. Guy's response to Defi NBC Man was,

Starting point is 00:11:31 Apologies if I wasn't clear. The view I shared was Athena had failed to find real traction on our cross-chain expansion, and that was a shortfall on our behalf by not finding longer-lasting demand beyond token incentives. Arbitrim have killed it so far and continued to do so. Again, if you want to hear your comment featured on the show, please write a review or leave a comment on an episode on YouTube or X. Back to my conversation with Vlad. So as we were just talking about, you know,

Starting point is 00:11:57 Robin Hood has this advantage of having, you know, these two types of users and of seeing users who trade equities and crypto. And I just wondered if you could just tell us some insights about those traders who kind of gravitate, who learned about crypto on the platform and started trading crypto there versus the ones that you can tell maybe we're more crypto-native and how, you know, they started either trading equities or, and then in general, obviously now you have branched out to things like meme coins and stuff. And I just was wondering from both ends, like how you're seeing those types of users converge or how they're different. Yeah, I think broadly there's three different types of customers involved here. One is active traders. And one of our

Starting point is 00:12:45 priorities as a company is to become the best active trader platform. So build a platform that you you can measure by market share and becomes clearly for customers the best place to trade any asset that we offer, whether it's crypto, equities, or options. So that's kind of one category of work that we're doing. And in fact, we had a conference in Miami in October just a couple weeks ago, where we announced a slew of active trading products, including Robin Hood Legend. Robin Hood Legend is the first platform that we built purposely for the... active trader in mind. And one of the things that we've been hearing is our customers want crypto functionality with Robin Hood Legend. So the team was hard at work at that. Originally,

Starting point is 00:13:37 that was slated for 2025, but it's actually rolling out imminently. Like over the next couple of days, it'll start rolling out to users. And that comes with it a new feature that we're going to be offering for the first time on the crypto side, which is direct exchange. routing on Robin Hood. So rather than going through market makers and liquidity providers, you'll be able to access the order books directly and go directly into exchange, which I think for active traders is very, very important because they want that type of precise control over their orders and their pricing. They want to see the order into the order book, and it's something we've been hearing a lot about. So that's the active trader side. For new investors in the crypto,

Starting point is 00:14:24 Robin Hood has been very, very successful because we've been so, we established such a large customer base with traditional stocks. So when customers became curious about crypto, maybe they hear about it in the news or a friend tells them, and they already have a Robin Hood account where they have their other investments, we just became a great point to introduce new people to this asset class. I think you mentioned memes. It's funny to see how Doge has like entered the public consciousness, right? It started out as very much a meme, the original one to some degree. And now it's the namesake of like government efficiency, right? It's like now there's a quasi-government agency that's named after this thing.

Starting point is 00:15:18 And I think a big part of why it, entered the public popular consciousness was that it was available on Robin Hood early. A lot of people got in at very, very low prices. And so when 2021 came and you saw a huge appreciation in that coin, a lot of Robin Hood users ultimately benefited from that exposure. And we had millions and millions of customers that discovered crypto through memes and through other things on the platform. And then there's probably a third category, which I would call more institutional. But folks that are looking to diversify, they're looking to build a long-term portfolio, and they see crypto as an uncorrelated hedge against other types of risks that maybe their

Starting point is 00:16:09 equities portfolio does not adequately hedge. So they might be holding some in dollars, some in commodities like gold. they'll have an equities portfolio and then Bitcoin as an asset class along with other cryptos sort of like rounds that out. And we serve all three. I think Robin Hood is actually the goal for the company is for a retail customer, we should be able to meet all of your financial needs and serve the entirety of your wallet. Your entire wallet should be at Robin Hood and you should get the best experience and the best pricing from all of all, the services that you need. Earlier this year, you acquired BitStamp and EU-based OG Crypto Exchange,

Starting point is 00:16:53 and I saw that in Europe you've now turned on both Saul and ETH staking for Robin Hood customers. I was wondering if you could talk a little bit about how the EU laws, I'm assuming it was MECA, enabled that, and also what you've seen in terms of customer uptake on the staking offering. Yeah, it's an odd situation to be in where there's more regulatory clarity and more flexibility in the EU than in the U.S. for something, isn't it? Hopefully that'll change. But yeah, the EU's gotten aggressive and has made attempts to actually embrace the industry. There is more clarity with Mika and the upcoming regulations. And so we've been able to offer greater selection of assets, the ability to stake ETH and Seoul. And these things are very popular with

Starting point is 00:17:43 with our customers because it's an easy way to generate yield while you're securing the different crypto networks for customers. And we share a large portion of the economics directly with them. So it's easy and you get a great deal, which I think is the reason why it's been so popular. Yeah. And I think you started with Saul before Eath. Was there a reason for that? I think it's more of an engineering thing. It's a little bit easier. to get started with sole staking as a service because you don't have to worry about like the, you know, the minimums to run a validator like you do on the each side. But yeah, it's more implementation complexity rather than any sort of regulatory difference. Okay. Yeah. And I did see that

Starting point is 00:18:34 I think it's more than 60% or something of the saw on your platform is now staked, which Yeah, that sounds about right. It's, I mean, for, customers, it resonates. If it's easy to enable and you get a yield, then there's a strong incentive to stake your assets. And it's good because for folks that are crypto-native, they like to participate in securing the network. They really feel like it's not just an asset they're holding, but they're helping build a community around these assets. Yeah. So I heard your Robin Hood CryptoGem, Johan Kerbrot, say that the wallet had seen over 100,000 downloads. And I was wondering, based on like the user requests or

Starting point is 00:19:20 behaviors, what percentage of downloads do you think were from crypto native people who became Robin Hood users and already knew what a wallet was versus traditional investors and traders who learned how to handle a crypto wallet from trying out the Robin Hood wallet? Yeah, I think a lot of our customers tend to be first timers. I assume that that's the case for the wallet as well. We do very little cross-marketing between the main Robin Hood app and the wallet app. And instead, the goal with every product is to have it be independently successful. So we want to make sure that people come to the wallet because it's a great wallet, not just because it's associated with Robin Hood. And that led us to a bunch of innovations in the wallet space,

Starting point is 00:20:10 like gasless swaps where, yeah, you don't have to actually be holding the gas token and the transaction itself is a little bit simpler. We have great cross-chain swapping functionality available as well. And we're really trying to kind of abstract the complexity of being on-chain from customers as much as possible while giving them the benefit. So we want to give you the same clean user experience. that you're accustomed to with the Robin Hood app, but with all the power of being able to operate on chain

Starting point is 00:20:46 and access DAPs and swap your cryptos. So the wallet's an area where we see a lot of opportunity. And I think that as we keep working on the wallet and we keep making progress on the back end and hopefully pushing ahead tokenization of real world assets, the wallet becomes an even more important. part of the strategy. And when you talked about the swaps, is that from your partnership with Arbitrum that you're offering

Starting point is 00:21:16 that? We have a couple of different partners. Our Arbitrum, of course, one of them on the chain side. But yeah, we partner with various aggregators and other counterparties that help us facilitate the swapping as well. So stable coins were a huge sleeper storing in crypto this year. And I think as the year got started, people's eyeballs were popping out of their heads looking at Tethers' profitability. And Robin Hood recently backed the global dollar, aka USDG, which is a new stable coin out of Singapore.

Starting point is 00:21:50 It also has investment from Anchorage Digital, bullish, Galaxy Digital, Cracken, etc. What about USDG appeal to Robin Hood? Yeah, I think the idea that I got very excited about is stable coins have gotten a ton of adoption overseas as a way to get exposure to U.S. dollars, particularly in countries where the local currency might be devaluing quite a bit. And so if you look at volumes, there was a stat that was released a couple months ago about Tether-on-Tron network and how Tether-on-Tron actually surpassed Visa's daily transaction volume. And I think that speaks to the power of this technology to facilitate holding of real world assets.

Starting point is 00:22:42 And one analogy that I think works is stable coins are basically like an improved version of a traveler's check, right? It's like you used to have travelers checks for when you wanted to spend money overseas. American Express was big in that space. And a lot of times people actually use those as a way to store value. let's say your local currency was devaluing. If you could get your hands on American Express Travelers checks, you could actually safeguard that over a longer period of time

Starting point is 00:23:14 and move your assets away from rapidly inflating currency. And then, you know, this was something I unfortunately experienced firsthand growing up because in the early 90s, Bulgaria entered just a brutal pang of hyperinflation. I mean, the inflation rate in 1991 was something like 150%. And then by 1996 and 97, it was in the thousands of percent. So it had the unwelcome distinction of the highest inflation rate in the world for a year or two there. So it beat out South African countries, which is not a great distinction. But people were really thinking about this, and it was kind of front and center.

Starting point is 00:24:02 How do I get my hands on dollars? My grandparents didn't have access to them. And so they would collect, they had this closet in their apartment where they would put copper cookware, you know, pots and pans as a way to store wealth. So by introducing stable coins, we can solve that problem for people in a digital way. And not only that, if you look at some of the problems, you mentioned tether and how much money they're making. The reason they're making so much is because they don't share the yield.

Starting point is 00:24:32 with the end users. And so in some ways, if you can access dollars in a traditional bank account and earn yield on that, you're better off doing that because your dollars are actually generating an interest rate in a high rate environment that can be significant. So if we can kind of marry both and deliver yield to stable coin holders directly, I think that would be a very, very strong value proposition. And that's what we hope to enable with the dollar global net. network. Oh, so basically that would be the differentiator between probably

Starting point is 00:25:07 USDG and then the two other top reserve back coins, which are tethering in USTC, is that what you're saying, that that would be how it would plan to compete? I think there's a number of things, but in terms of what's valuable to an end customer, getting a very competitive yield to your crypto wallet for holding dollars, I, I think is going to be the next step in stable coin adoption. All right. So as we alluded to earlier, there's been the promise of a huge 180 coming on the crypto regulatory front.

Starting point is 00:25:47 And your company has been on the receiving end of the SEC's regulation by enforcement strategy. You received a Wells notice from the agency last spring. And I wondered if you could give a wish list to lawmakers and to the new CryptoZar David Sacks and to the incoming heads of agencies like the SUC and CFDC, what would you put on it? I think there's a lot of things. I mean, I think the MECA regulations and the EU provide a good starting point. I think that clarifying sort of like the engagement between companies and the SEC and the CFTC around what's a commodity and what's a crypto security is probably a great first step. You want to know

Starting point is 00:26:37 what you're dealing with and what regime it's in. Once we do that, actually figuring out a way to list crypto securities, I think is a big thing. It could address a lot of the systemic problems we have in the U.S. equity markets. In particular, it being difficult to trade 24-7, which every other modern digital service runs around the clock. It's not pinned the U.S. East Coast working hours, but the U.S. equity capital markets, which are the most robust and highly liquid in the world, still have this strange limitation. And just to be clear, when you use that term crypto securities, it's not crypto asset securities, it's blockchain-based. It's securities in a blockchain-based wrapper. Is that what you're... Correct. Yeah. Yeah. So I think tokenized stocks, private companies,

Starting point is 00:27:30 right, tokenized private companies, which I think there's a big problem right now in that if you're a retail shareholder, retail investor, you can't really access private companies easily. There's the accreditation rules, which are one element, but also the fact that it's so difficult for a company to go public that by the time they do it, they're already pretty big. It's, you know, Robin Hood went public and a north of a 30 billion valuation. Most companies, in our cohort aren't going public at 100 million valuations anymore. It's not like the 80s where you'd have Microsoft and you could get exposure to that in the hundreds of millions of range and kind of grow with that over time. So I think crypto has the promise to unlock a lot of that and really just accelerate a ton of innovation and position not just the U.S. dollar, but the U.S. equity market and the financial system even more as kind of the largest and best capital markets in the world. And so if we can adopt sensible regulation to accelerate that, it's not just good for our company

Starting point is 00:28:46 and our customers, but I think it's going to be very good for the country as well. And is there anything else on the wish list? Well, I have lots of things on the list. Yeah, but maybe there might be a few more. I think the reality of it is, I mean, comprehensive stablecoin regulation where we can clarify things like how can we deliver yield to holders. You know, stable coin reserve treasury management. All of that was kind of in play. And, you know, Fit 21 past the House but was not seen in the Senate.

Starting point is 00:29:22 So we expect that to come through. but I think the biggest thing is frankly just a willingness to embrace this industry and recognize that the U.S. should be a leader and should not like try to push this offshore. One, because it's a big opportunity and the U.S. has always been a leader in new technologies. So it's very strange to me that we would kind of like push this one away. And the other because it doesn't work. What happens if you push it overseas is Americans are just using less. regulated offshore services, which leads to huge problems because then they don't have the

Starting point is 00:30:01 protections and the U.S. doesn't get the benefit from that innovation. Yeah. Yeah. Case in point, FtX. So Robin Hood has historically offered, you know, far fewer crypto assets on its platform than its competitors. And I wondered what, you know, process you've been using or what criteria you've been using to decide which assets to add and how you expected that that criteria would change under the incoming Trump administration? Yeah. I mean, basically right now we have a crypto asset listing committee within the crypto business that meets and makes determinations about what assets to list and sometimes what assets to delist. And they look at a number of things, including an analysis of

Starting point is 00:30:49 whether the token that we're considering is a security or not. And if we're, regulation comes in and the rules for listings are clear, then, of course, that would change. And not to say that we wouldn't need a committee anymore, maybe that would still be necessary, but at least there would be kind of objective criteria behind listings and we'd be able to move much faster and at lower cost to list new things. And I did notice that after the election, Robin Hood pretty quickly relisted. Saul, Ada, and XRP. And I would assume that's because Donald Trump won the election.

Starting point is 00:31:31 And obviously this kind of foretold that there would be a change at the SEC. But I also noticed at that time that Romanhood actually didn't relist Matic, which had been delisted alongside those other two. I think XRP was in a different group, but alongside Saul and Ada. And I wondered just, you know, what went into that thinking? Yeah, you know, I don't see the full readout of all. the deliberations by the asset listing committee. I think that we do our best to keep that sort of like cabin within the committee itself. But, you know, I trust that they went through a comprehensive process looking at many things. But yeah, the details behind that I don't really

Starting point is 00:32:17 have. And as you mentioned, you had these prediction markets that you just launched shortly before the election. And I wondered if you could elaborate on what your vision was for that part of the business? Yeah, that was really exciting to me because I think that, you know, you probably had this experience where you were maybe watching the news during the election as I was. And, you know, you have events happening. You know, a state will get called or new poll results from, you know,

Starting point is 00:32:48 a particular county come out. And you're getting the play by play when you're looking at the news, but you don't really get a distillation of how it affects the ultimate result of the election. And I think the incentive of a lot of these news networks has evolved over time to just keep you engaged, rather than just giving you the information as quickly as possible. And so, you know, at 8 p.m. Eastern, 9 p.m. Eastern, if you were watching the news networks, they were kind of telling you the election was up in the air. anything could happen. But you look at the prediction markets, they were telling a different story. I think by

Starting point is 00:33:28 then Trump had a 90 to 95% chance of ultimately taking down the election. And so I think that prediction markets are interesting as a trading product. And obviously we serve that market and we're very excited to keep growing it. But I think they're also an evolution of the news. It's like if if you think about how to get information as quickly as possible, distill lots of inputs that are out there, you know, markets are a really effective way to, uh,

Starting point is 00:34:02 to do that in the form of the answer to a yes or no or multi-part question. And so I'm, I'm just as excited, if not more so about that. Like, how can we reimagine the news? Uh, if we can actually ask ourselves,

Starting point is 00:34:17 what's the best interface for, uh, distilling all this market information and delivering it to customers as quickly as possible. If you just wanted to get an answer to a question really simply and quickly, I think this allows for something like that to be built. And so this is not a Robin Hood-related question, but it sort of sits at the intersection of what your business is built on. And I'm sure you see there's a lot of chatter about micro strategy, which will be included

Starting point is 00:34:46 in the NASDAQ 100 index on Monday. there are some critics. I see Martin Schwelly is saying that he doesn't believe this will end well. And it was just curious for your thoughts on, you know, what you thought about that. Yeah, you know, I haven't done kind of the deep analysis of the whole, like, the whole thing there. I know that, you know, and I probably, I wouldn't want to give my take, because frankly, like, the platform gives customers the ability to trade and, and kind of make investments in whatever customers want.

Starting point is 00:35:29 It's a self-directed platform, and people should be making their own decisions. And so generally, I'm more of the camp of sure folks on the internet can give their impressions of things, but the most important thing is that you, the investor, are in control. You're the boss. You're making your own decisions. We give you tools to do that rather than kind of like endorsing or or or or sort of like coming out against certain products or certain companies. So my one universal thing is make sure you do your homework before before investing in anything and don't just do it because someone on the internet thinks it's good or bad to invest in it. That's great advice. So last question. And, you know, obviously, the world knows that during the GameStop saga, Robin Hood got caught between this rock and a hard place, which is basically how slowly the Tradfai world moves and how

Starting point is 00:36:28 quickly people on the internet want to trade. And we've talked a little bit about, you know, how you think blockchain technology and companies like yours can benefit from this new development. But I wondered if you could talk even just more like futuristic or visionary, once these technologies become more embedded in everyday life, how do you think, what do you think our lives will look like? Yeah, I mean, very directly, I would say that blockchain technology replaces with software a lot of the work that is now being done by large, centralized, brick-and-mortar-based institutions. So, for example, if you look at a blockchain network and you look at the process of, like, swapping a stable coin for a crypto or any other asset, there's no transfer agent.

Starting point is 00:37:29 The transfer agent is done by software. There's no clearing house. So central clearing is done by software as well. That's really what the blockchain does. Payment processors are not a thing. That's all done by software. And even market makers, I mean, there's early attempts at recreating the functionality of the market maker through software through these AMM pools. And so I think there's two benefits to that.

Starting point is 00:38:03 One is the efficiency and simplicity in just streamlining this. So if central clearing is not a thing, then clearinghouse deposit requirements are not a thing. and value is just transferred directly, which I think simplifies and removes a lot of like the central clearinghouse deposit requirement issues that you see during times of market stress. So there is, blockchain technology does solve that. The other is if you just remove and replace with software, a lot of the brick and mortar functionality that the market relies on, that lowers the cost.

Starting point is 00:38:43 and you look at the cost that Robin Hood operates, the cost of us operating our crypto business more than an order of magnitude lower than our traditional brokerage business. And the ultimate functionality is similar. You're kind of swapping one asset for the other, swapping a dollar for a stock or a crypto, but the cost of that much more efficient

Starting point is 00:39:05 using crypto technology. And I think the first benefits of adopting crypto technology for more things, including real world assets are going to be lowering the costs for the companies and improving the margins. But the kind of down the road impact will be passing that on to users with even more value and lower cost of investing. So the ultimate cost borne by users will decrease over time, which is going to make an impact long term on their portfolio returns and their retirement savings. And I think Robin Hood can really help accelerate that. Our approach has always been,

Starting point is 00:39:42 to not use technology to improve our margins, but really use technology to operate sustainably at lower margins than our peers and pass back that value to customers. All right. Well, this has been a great conversation. Where can people learn more about you and Robin Hood? You know, on Robinhood.com, if you're an investor, you can look at investors. com. We actually did a great investor day in New York where we kind of outlined the tenure

Starting point is 00:40:12 arc and what we believe Robin who can be in 10 years. And I think that's a fun watch. And I try to be somewhat active on social media on X and other places. So you can see my latest thoughts on FinTech and other things there too. Perfect. Well, thank you so much for coming on Unchained. Thank you. Thanks for having me. Good to see you again. Don't forget. Next up is the weekly news recap today presented by Wintercraft AI. Stick around for this week in crypto after this short break. Pocodot is the original and largest layer zero blockchain with over 2000 plus developers. The anticipated Pocodot 2.0 upgrade will be a massive accelerator for the ecosystem. Upgrading the infrastructure with 8 times higher transaction throughput and twice as fast block times,

Starting point is 00:40:59 tailored court time for the needs of every protocol, trustless bridges to multiple chains, and revise tokenomics with a token burn to reduce inflation. Perfect for GameFi and DeFi to build, grow, and scale. Get your Web3 ideas to mark. market fast. Think big, build bigger with Pocodot. Join the community at Pocodot.network slash ecosystem slash community. Welcome to this week's crypto roundup. In today's recap, we dive into the brewing clash between Av and Polygon over a controversial yield proposal, explore editorial tensions at CoinDesk regarding an article involving Justin Sun, and cover a major court decision allowing Coinbase

Starting point is 00:41:39 to delist wrapped Bitcoin despite a $1 billion lawsuit. We'll also discuss the Senate's decision to cancel Caroline Crenshaw's SEC reconfirmation vote, FTX's timeline for distributing recovered funds to creditors, and Athena Lab's new stablecoin launch, as well as its partnership with Trump's World Liberty Financial. Plus, we'll unpack the dramatic effects of the Pengu token air drop on Puggy Penguins' NFTs, highlight micro-strategies milestone NASDAQ 100 inclusion, and touch on major blockchain launches from Sonic Labs, Cracken, and Deutsche Bank.

Starting point is 00:42:13 Thanks for tuning in to the weekly news recap. Let's begin. Ave and Polygon clash as yield proposal sparks tensions. A brewing rivalry between OG protocols AVE and Polygon took center stage this week after Polygon introduced a governance proposal to allocate $1.3 billion in bridged stable coins into Morpho, a competing lending protocol. The plan aimed to generate $70 million in annual yield, but faced sharp criticism over potential risks and competitive implications. Mark Zeller of the Avey-Chann Initiative responded with a proposal urging Avey to disengage from Polygon. Suggested measures included freezing asset reserves and restricting borrowing on Avey's polygon deployment,

Starting point is 00:42:58 citing bridge vulnerabilities that have historically led to significant user losses. Zeller emphasized that such risks made continued collaboration, untenable, pointing to past exploits such as the Harmony and multi-chain bridge hacks. Polygon's community ultimately rejected the Morpho proposal, citing concerns over added risks and the lack of user-opt-in mechanisms for bridged asset investments. Despite this move, tensions escalated when Polygon co-founder Sandeep Nailwall accused Avey of monopolistic behavior, calling the withdrawal proposal anti-competitive and undermining innovation in Web3.

Starting point is 00:43:34 Ave's founder Stani Kulechov defended the government. governance decision, arguing that prioritizing user security was central to the Dow's responsibilities. However, the clash has left both sides at odds, with Avey's potential exits still under discussion. Editorial tensions rise at CoinDesk following ownership dispute over Justin Sun article. According to a report by Fortune, Crypto News Outlet CoinDesk is grappling with internal tensions after its new owner, crypto exchange bullish, reportedly pressured the publication to remove a controversial article about Tron founder Justin Sun. The article published in late November detailed Sun's purchase of a $6.2 million banana artwork and his subsequent stunt of eating it, alongside his ongoing

Starting point is 00:44:19 legal battles and allegations concerning Tron's use in illicit financing. Following complaints from Sun's team about the piece's tone, bullish, which acquired CoinDesk for $75 million last year, allegedly directed the outlet to take the article offline. The move led to protests from CoinSysk from CoinDesk journalists, who raised concerns about editorial independence during a meeting with bullish CEO, Tom Farley, and CoinDesk CEO, Sarah Stradabirda. While the article was removed from CoinDesk's site, it remains available through Yahoo News syndication. The fallout has already prompted changes, including the resignation of Matt Murray, chair of

Starting point is 00:44:56 CoinDesk's editorial committee, and former editor-in-chief of the Wall Street Journal. Murray stepped down on Monday, as reported by Fortune. His exit comes amidst bullish's announcement of a planned initial public offering, further complicating CoinDesk's operational dynamics under its new ownership. Judge rules against BAT Global in $1 billion lawsuit over Coinbase's WBT delisting. A U.S. District Court has denied BIT Global's request for a temporary restraining order to prevent Coinbase from delisting-wrapped Bitcoin, clearing the way for the exchange to remove the token as planned. The ruling is a setback for BIT Global, which filed a $1 billion lawsuit accusing Coinbase of anti-competitive behavior after it announced plans to delist WBTC following its transition to a new custodian.

Starting point is 00:45:44 BIT Global, which took over WBT custody in partnership with BitGo, argued that Coinbase's actions, including the promotion of its competing wrapped Bitcoin product CBBT, would cause imminent and irreparable harm. However, Judge Araseli Martinez-Ogine rejected the request. Coinbase defended its decision, citing its right as a private company to control its listings. A representative told the block, the idea that we're like a water or electrical company, a utility that you have a right to plug into, is just bogus. They also noted that Coinbase accounts for less than 1% of WBT trading activity and dismiss the claims as a foolish. Crenshaw's SEC reconfirmation bid ends as Senate cancels vote. The Senate Banking Committee has cancelled the vote to reconfirm Caroline Crenshaw as an SEC commissioner, effectively ending her tenure. Initially delayed last week after Republican lawmakers opposed her nomination, the vote was rescheduled,

Starting point is 00:46:45 but ultimately cancelled due to a lack of sufficient support. According to a report from decrypt citing sources familiar with the process, Crenshaw, a prominent figure in the SEC's regulatory approach to digital assets, faced vocal opposition from crypto industry advocates. Groups such as the Blockchain Association and Defy Education Fund led campaigns to block her reappointment, citing her tough stance on crypto regulation. Coinbase CEO Brian Armstrong also publicly called for her removal. With Crenshaw's term expiring and SEC Chair Gary Gensler and Commissioner Jimele Lizaaga

Starting point is 00:47:19 stepping down in January, President-elect Donald Trump will oversee the appointment of three new commissioners. FTX to begin. Creditor distributions in early January. FTX's bankruptcy estate announced that its court-approved Chapter 11 reorganization plan will take effect on January 3, 2025, paving the way for creditor distributions to begin. The plan, which was first approved in October, allocates between $14.7 billion and $16.5 billion, for repayments. According to CEO John J. Ray III, we are well positioned to begin executing the distribution of recoveries back to all customers and creditors and encourage customers to

Starting point is 00:48:00 complete the necessary steps to begin receiving distributions in a timely manner. FTX has partnered with Cracken and BitGo to manage the distribution process. Creditors can receive their payouts in stable coins by converting Fiat funds into digital assets via the FTX claims portal. The initial distribution phase is expected to occur within 60 days of the plan's effective date. Athena launches, USD-T-B, and partners with Trump's World Liberty Financial. Athena Labs has announced the launch of its new stable coin, USD-TB, a project backed by Black Rock's Beetle Fund, which manages over half a billion dollars in U.S. Treasury bills. USDTB marks a shift from Athena's flagship USDA token, offering a more traditional asset-backed model.

Starting point is 00:48:47 Unlike USDAE, which uses market-driven derivative strategies, USDTB maintains its dollar peg through reserves equal to each USDB token issued, over 90% of which are held in BlackRock's tokenized fund. In addition to its launch, Athena disclosed a partnership with Trump-backed World Liberty Financial, WLF. The collaboration integrates Athena's staked USDA token, S-USDE, into WLF's AVE instance, enabling users to deposit S-U-S-D and earn rewards in both Ethena's tokens and WLF's native token. Athena has proposed S-U-S-D as a new collateral asset for WLF, with co-incentivized rewards expected to boost stablecoin liquidity and utilization across the platform.

Starting point is 00:49:33 We had Ethena Labs founder Guy Young on the show this week. Be sure to check it out if you haven't yet. Pengu AirDrop shakes up Pudgy Penguins' NFT market. This week saw another airdrop make waves as the Pengu token launched alongside a dramatic shift in the market for Pudgy Penguins NFTs. The token, tied to the popular collection, debuted on Solana, with a fully diluted valuation of $2.6 billion, quickly gaining over 200,000 holders. However, the launch caused the floor price of Pudgy Penguins' NFTs to plummet nearly 50% from 30-Eth to around 15.9th, as holders rushed to claim their tokens.

Starting point is 00:50:12 The drawdown is likely because NFT holders no longer felt the need to retain their tokens after claiming the airdrop. Each Puggy Penguin's NFT entitled its owner to 1.7 million Pengu tokens, valued at approximately $50,000. This broad distribution extended beyond NFT holders, with allocations for Ethereum and Solana users and a portion reserved for the Pughey community. Despite some transactional hiccups on Solana, during the claim process, the launch was hailed as a significant milestone for the brand's expansion,

Starting point is 00:50:45 following its growth across retail and social media. Micro Strategy joins NASDAQ 100, following massive 2024 Bitcoin rally. This week saw another milestone for Micro Strategy, as the company was announced as a new member of the NASDAQ 100 Index, effective December 23rd. Known for its aggressive Bitcoin holdings, Micro Strategy has increasingly become a proxy for the cryptocurrency, with its shares rising more than 500% this year, far outpacing Bitcoin's 140% gain. The inclusion in the NASDAQ 100 means ETFs such as the Invesco-QQQ trust, which manages $325 billion in assets, will now automatically buy micro-strategy shares.

Starting point is 00:51:29 Economist Alex Kruger, speaking on this week's Bits and Bips podcast, describe the ripple effect of this edition. Anytime anybody buys the NASDAQ either via ETFs or mutual funds or futures, you're literally buying micro-strategy. What it does is it enables Sailor to sell more shares and to buy more Bitcoin. It's simple math. Kruger added that this dynamic could reverse under extreme market conditions, potentially creating a self-fulfilling cycle. New blockchain projects signal strategic moves across the industry. Three blockchain initiatives made headlines this week with notable launches and developments that

Starting point is 00:52:05 showcase different approaches to advancing decentralized technology. Sonic Labs, a rebrand of the Phantom Foundation, officially launched its layer one blockchain, Sonic. The new network is compatible with the Ethereum virtual machine and introduces features like faster transaction finality and a fee monetization model that allocates up to 90% of application-generated fees to developers. Sonic also announced a tokenirdrop of 190 million S tokens, valued at a proclamation. approximately 232 million, available on a 1.1 basis to holders of the Phantom blockchain's native token, Ftm. The initiative aims to attract developers and users by providing financial incentives and a familiar development environment. In addition, Crypto Exchange Crackin launched its

Starting point is 00:52:53 layer two blockchain Inc, built using Optimism's superchain technology. Ink supports interoperability with other OP stack-based networks and has partnered with decentralized platforms such as curve and fracks. Cracken also announced plans to implement permissionless fault proofs in early 2025 to enhance transaction accountability within the network. Meanwhile, Tradfai Giant Deutsche Bank revealed its plans for a layer 2 blockchain project utilizing ZK Sync technology as part of its involvement in the monetary authority of Singapore's project guardian. The platform is designed to support compliance-driven applications, integrating tools for transaction oversight and risk mitigation. A minimum viable product is expected to launch in 2025, pending regulatory approval.

Starting point is 00:53:42 And that's all. Thanks so much for joining us today. If you enjoyed this recap, go to unchained crypto.substack.com, that is unchained crypto. com and sign up for our free newsletter so that you can stay up to date with the latest in crypto. Unchained is produced by Laura Shin with help from Matt Pilchard, Juan Oranovich, Megan Gavis, Pam Majimdar, and Margaret Korea. The weekly recap was written by Juan Oranovich and edited by Nelson Wang. Thanks for listening.

Unchained - Why Robinhood CEO Vlad Tenev Is Betting Big on Crypto, Stablecoins, and Prediction Markets - Ep. 754

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