Dialogue with Robinhood Co-founder: Why don’t we build our own chain?

Video source:Bankless

Compiled by: kkk, BlockBeats

Editor's note: On June 30, Robinhood co-founder Vlad Tenev posted on X that the company will release a major announcement related to the crypto business at 11:00 p.m. Beijing time tonight. This move coincides with Robinhood's current pace of full expansion in the crypto and fintech fields.

As financial technology gradually evolves towards "platformization" and "intelligence", Robinhood is standing at the intersection of traditional brokerages and the new crypto order, using a series of product line reorganizations to outline the possible form of future personal financial services.

Robinhood is moving away from its positioning as a single trading tool and toward an "operating system" layout centered on the user's entire life cycle. From private equity tokenization, integrating CFTC-compliant prediction markets, launching Cortex and Strategies that cover AI strategy advisors and option strategy construction, to launching the "cash express" style Robinhood Banking and a unified multi-chain wallet architecture, the pace of its financial expansion far exceeds the outside world's traditional imagination of a FinTech company.

In this in-depth interview with Bankless, Tenev systematically expounded for the first time the overall concept of Robinhood's expansion into the fields of encryption, AI, private banking services and private equity. He emphasized that Robinhood is not "the opposite of centralization", but is becoming a bridge connecting TradFi and DeFi: providing a more efficient and fairer financial access method with a model other than a banking license; at the same time, he also responded to the controversy of "Bankless or not", pointing out that Robinhood plays the role of a channel service provider rather than a sovereign issuer in the encryption business.

Today, Robinhood is no longer just an entry ticket for retail investors in the U.S. stock market, but is attempting to become a shared entrance for crypto-native users, AI financial management users, and global asset investors.

This interview was published on March 31. The following is a compilation of the conversation:

Bankless: Welcome to Bankless, a show dedicated to exploring the frontiers of Internet finance. Today, my guest is Vlad Tenev, CEO of Robinhood. With the continued growth of the number of platform users and the scale of assets under management, Robinhood is accelerating to become a leading player in the field of cryptocurrency. In fact, they entered the cryptocurrency track very early: not only did they provide cryptocurrency trading functions in the Robin Hood App in the early days, but they also launched the Robin Hood wallet, a truly non-custodial crypto wallet.

However, due to the tough stance of the former U.S. Securities and Exchange Commission (SEC) on enforcing and regulating the crypto track, Robinhood’s further expansion in the crypto field was once paused. Now that stage has passed, what I want to know is how Robinhood will advance its crypto product layout after finally getting the green light from the SEC. Coincidentally, the same week that I talked to Vlad, Robinhood announced a series of blockbuster product lines: including Robinhood’s banking strategy and Cortex. I also wanted to take this opportunity to have an in-depth conversation with Vlad about these new businesses.

But for me, the most interesting part of the whole interview, and my favorite part, is the discussion about "the increasing barriers for private companies to go public in traditional financial markets" and "how this trend intersects with the tokenization movement." SpaceX, OpenAI, Anthropic and other companies with the most potential at the moment are still private companies. Although their equity is circulated in various ways in the private market, there is no real public market.

Vlad believes that tokenization can play a big role here - it can not only bring liquidity to these private companies, but also provide investment opportunities for investors who want to get in touch with companies at the forefront of technology. This innovation is simply a match made in heaven, and if we want to talk about the most suitable platform to host this tokenized market, Robin Hood is naturally the most promising candidate.

Overall, I really enjoyed my interview with Vlad. Although Robinhood is not a completely "de-banked" platform, they are constantly challenging the traditional financial system and forcing the old order to change - this is a good thing for the entire industry. So, let's officially start today's show. But before that, thank you to the sponsors who keep this show on the air. It is they who make this show, known as the "Wild West" of DeFi, possible. This is why you should check out FRAC's Finance - a cutting-edge protocol that is completely reshaping the stablecoin system.

Welcome to Bankless Nation. Today we have Vlad Tenev, the CEO of Robinhood. This is Vlad's third time on the show. Every time he comes, there's always some big update about Robinhood. And every time Vlad shows up, Robinhood goes further into crypto. This is no exception. Vlad, it's great to have you back, welcome back to Bankless.

Vlad Tenev: Thanks for the invitation, it’s a pleasure to be here as always.

Bankless: You just released a bunch of big product updates recently: Robinhood Strategies, Robinhood Banking, and Robinhood Cortex. It’s a perfect timing for our show, even if it’s a coincidence. We’ll talk about these products in a moment, but I want to start with some more crypto-native topics, especially the new changes in the regulatory environment for crypto in the United States.

Under this new administration, the U.S. crypto industry is seeing a lot of new opportunities, especially for institutional investors that were previously held back by regulatory uncertainty. What specific “doors” have been opened under this new administration? What can Robinhood do now that it couldn’t do before? Which door do you plan to enter first?

The SEC’s changing regulatory stance

Vlad Tenev: I think the most immediate change is that the United States has stopped the practice of "enforcement instead of regulation". Simply put, we no longer need to deal with a full-scale crackdown in all aspects of our business. This shift has brought huge improvements. For example, the SEC (U.S. Securities and Exchange Commission) announced that it would stop investigating Robinhood's crypto business and the crypto businesses of several other companies in the industry. At that moment, we felt an immediate relief - we can finally move forward as a company and as an industry without having to fight against that endless suppression all day long.

The previous government’s attitude towards crypto was very clear: they did not think crypto should exist at all, and did not allow it to be deeply integrated with the traditional financial system. Therefore, this policy shift is a huge positive. In addition, there are two important legislative directions that are also being promoted. Of course, I have to emphasize that stopping “enforcement-style regulation” itself is already a very important turning point.

Another interesting development is the clear regulatory attitude towards Meme coins. You may have seen that the SEC issued a memorandum on Meme coins, clearly stating that such tokens are not securities. This is actually not very controversial. From a legal analysis perspective, it is relatively clear that Meme coins do not meet the definition of securities. But in the past, each project had to do this analysis separately to analyze whether it was a security.

Robinhood has always been one of the more regulated companies. We conduct rigorous reviews and compliance analyses on every currency, including whether it constitutes a security. This is both expensive and cumbersome. So now that the authorities have given clear guidance and exemptions, it is very valuable and has greatly reduced the operational burden on us and the entire industry.

Similarly, there is now a clearer definition of whether staking constitutes a security. This is a very positive thing. If you think about it, the essence of staking is that users contribute their computing resources to supportBlockchainThe existence of pledge service providers is to reduce the complexity of this process.

Overall, this means that users can get higher returns, which means more crypto assets flowing into their wallets. The lack of clear regulation in this area before is actually hurting American consumers because they cannot get the returns they deserve on platforms with better regulation.

So, it's good to have clear guidance now. There are currently two important legislative directions being advanced in the United States: one is stablecoins, and the other is market structure. Stablecoin legislation is expected to pass first, which is of course good news for the entire industry. But what we are really excited about is the "market structure" legislation.

We believe this legislation is key, as it will provide a clear path for how we integrate crypto into real-world traditional financial assets, such as securitized assets, stablecoins that generate income, and even prediction markets. We will be able to clearly define:

• Which assets are Crypto Asset Security?

• What are Crypto Asset Commodities?

• As a platform, what compliance steps do we need to take to list crypto-asset securities?

• As an issuer, what conditions must be met in order to issue such assets to the American public?

I think these are the key questions, and legislation can help us answer them one by one, which is the prerequisite for truly unleashing the potential of encryption technology. We are very excited about this.

You just mentioned that some companies are exploring the use of stablecoins to build banking services, which means that users' stablecoins can be pledged or invested in a certain pool to earn returns. I think that the real implementation of such innovative products requires the cooperation of "crypto market structure legislation", so that the banking industry will usher in more competitors.

The current stablecoin legislation does not fully cover this type of "income-generating stablecoin", so it cannot provide a solid legal basis for this model. We do need more regulatory clarity to make this type of product more compliant and moreSafetyBut we remain optimistic and are actively participating in the relevant legislation in Washington. Judging from the current situation, the direction is positive and we are full of confidence.

Bankless: From what you said, I feel that there are actually many product lines that can be launched in theory, but we are still in the stage of exploration or conception. To truly enter the stage of implementation and construction, Congress needs to pass relevant bills as soon as possible. Am I right?

Vlad Tenev: Exactly. For example, a stablecoin that pays interest directly to holders is essentially a lot like a money market fund. In fact, many stablecoins themselves hold government bonds, so from that perspective, they are not much different from money market funds. The regulatory treatment of stablecoins has always been somewhat different, but we believe that this is exactly where regulatory clarity is needed.

Private Equity Tokenization

Bankless：那我们来聊聊「资产代币化」这个领域吧。我觉得这是个特别火的话题，尤其是在传统金融领域。因为它本质上就是传统金融与加密世界之间的桥梁：我们能否把更多资产上链，从而真正利用公共、无需许可的Blockchain的优势？那 Robinhood 在代币化这个趋势里扮演什么角色？我猜你们对它是看多的。你们会成为发行方吗？还是平台方？Robinhood 会不会自己发行代币化产品？还是更倾向于成为这些产品的交易市场？你们在这个代币化技术堆栈中，处在什么位置？

Vlad Tenev: For us, the definition of "asset tokenization" is to create a mapping of a non-native crypto asset on the chain so that it can be freely traded. We actually already have some examples of this, such as stablecoins. Stablecoins are actually tokenized treasury assets. There is also the tokenized gold product launched by Paxos, which is also an interesting example. We also cooperated with Paxos and some other companies to launch USDG, the Dollar Global Network project, with the goal of creating a global stablecoin that can pay attractive returns to holders.

The next step is naturally tokenized securities, which is a direction we are very excited about. Because it allows global users to own shares in American companies just like using stablecoins. Just as stablecoin legislation is seen as a tool to promote the global dominance of the US dollar, tokenized securities may also become the key for American companies to maintain their dominance in the global market.

Vlad Tenev: Currently, it is very difficult for overseas investors to invest in US companies. Just as stablecoins make it easy to obtain US dollars, tokenized securities can make it easy for global users to invest in US companies. This is good for companies and for investors outside the United States because they can access high-quality assets as a wealth diversification tool for their own depreciating currencies. This is also good for entrepreneurs and capital markets in the United States. If we can raise funds for companies more easily through the global crypto market, we can see more interesting and promising companies emerge. In fact, we published an op-ed in The Washington Post a few months ago calling for the promotion of tokenization of private securities.

Think about how difficult it is to invest in private companies like OpenAI or SpaceX. Crypto is a solution. If we can tokenize shares of private companies, it will be good for both companies and investors. It is ridiculous to me that we have clear regulatory definitions on meme coins, and people can freely invest in these projects with no fundamentals, but cannot invest in high-quality private companies like OpenAI and SpaceX.

Bankless: If I put this information together, there is already a "market" for SpaceX shares, but it is still in the private market. Many people have bought SpaceX shares in various ways. What you mean is that we can actually tokenize these shares and use encryption to make this market more standardized and structured, and turn it into a truly regulated and deep market.

So Robinhood can become a platform that provides a trading market in this process. Are you saying that this is one of your roadmaps? And how far is it from Robinhood launching a tokenized product of company equity like SpaceX?

Vlad Tenev: Yes, Robinhood is at the intersection of traditional finance and crypto finance. We have all the crypto technologies, and we also have a complete traditional financial infrastructure, such as multiple brokerage license entities. This is where we can contribute to the ecosystem.

In the future, I think this may be similar to the issuance mechanism of ETFs. ETFs essentially hold a basket of securities and then issue ETF shares to the outside world. This can actually be regarded as the predecessor of tokenized securities. In the operation of ETFs, investors can exchange a basket of underlying assets for ETFs, and can also redeem ETFs for those assets. This "creation/redemption" mechanism is actually a comparison model of tokenization logic in traditional finance. And encryption technology can make this process more efficient and decentralized.

Bankless: We can see that although the number of IPOs has not fallen off a cliff, the overall trend is indeed downward. The reason is simple. The cost of IPO is too high. For many companies, the threshold is getting higher and higher and it is becoming more and more difficult to cross. Will this also promote the development of the new path of "private equity market tokenization"? Or is this path too complicated and difficult to implement from the perspective of compliance and traditional financial regulations in various countries? What do you think?

Vlad Tenev: I think this trend will lead to "security tokenization" as an alternative path to IPOs. This will happen sooner or later - even if the United States does not promote it in the short term, other countries will start to try it. The nature of encryption is global. If you can issue tokens on the blockchain for the shares of a company in a compliant jurisdiction, you can immediately reach a market with increasingly strong liquidity, global participants, and hundreds of millions of users. Because of this, I think the United States will eventually accept this trend.

This tokenization has two key uses:

• The first is the start-up stage, which is equivalent to the traditional IPO, that is, primary market financing. The "primary capital" at this stage is very important. As a founder who has started a business in the seed round, I know that financing will take up a lot of energy and resources, which is very tight for small companies. If you can quickly reach the global capital pool to complete financing, this is a very attractive option. This will also give birth to more new companies and new projects, and also bring investors early participation opportunities (although higher risk) but with greater return potential.

• The second is late-stage private companies, such as OpenAI or SpaceX, whose founders have already raised a lot of money and may even be planning an IPO. At this time, tokenization is not very attractive to founders, but it is very valuable to employees. Many large companies have thousands or even tens of thousands of employees, but employees do not have clear expectations for IPO or exit liquidity, and have no predictable channels for liquidity. At this time, they will hope to cash out and cash out part of their shares to achieve asset diversification. This brings a very strong practical motivation for tokenization.

There are indeed some "secondary markets for employee equity" now, such as EquityZen, Forge, etc. These platforms will proactively contact employees to help them transfer their shares. But the biggest problem with these platforms is that liquidity is fragmented. The platform has to match buyers and sellers and match supply and demand by itself, which is an inefficient process. The advantage of encryption lies in interoperability. As long as you put assets on the chain and turn them into freely tradable tokens, you can immediately access global liquidity. This is exactly where tokenization is the most powerful as a technical solution.

Bankless: Indeed, there are many trends pushing this direction. Star companies like SpaceX and OpenAI are privately owned and obviously have no interest in going public. Many private AI companies are also like this - they do not have public equity, nor are they as large as Meta or Google, and there is a problem of equity dilution when buying stocks, so it is difficult for investors to really bet on the AI track.

Vlad Tenev: For ordinary investors, the investment options for betting on AI are very limited. You may only be able to buy NVIDIA (but its market value has exceeded one trillion), Alphabet (also trillions), and Tesla. Of course, they are all too big and have already reflected most of the AI premium. But you can't invest in the real core AI startups such as OpenAI, Anthropic, and Perplexity.

Bankless: Yes, just look at the current public market trends - new investment opportunities are increasingly not appearing in the public market, but concentrated in the private market. And part of the reason for this, as I just said, is that the compliance costs of IPOs are getting higher and higher, and the barriers are getting harder to cross. At the same time, encryption is providing a potential solution. I see a lot of favorable winds pushing this trend to the end: the tokenization of private market equity may eventually become some form of "quasi-public market".

OK, I also want to talk about prediction markets, because I remember Robinhood recently got involved in this area. Did you have a slogan that "everything can be marketable"? Or am I misremembering it? Is this your official strategic direction? Or is it just the impression of the outside world? Can you help me clarify it?

Robinhood Enters Prediction Markets

Vlad Tenev: In fact, Robinhood has not officially used the slogan "Everything can be marketed."

Bankless: So this is indeed something I imagined.

Vlad Tenev: However, our parent company is called Robinhood Markets, and you may have heard that our mission statement is: to democratize finance for everyone. This means that we believe in the power of the market, and if a market exists, we believe that it should be facilitated and traders should be able to participate in it. Especially for those markets that were originally only open to institutions, if retail investors are also interested, then we believe that retail investors should also be able to participate in it in a fair environment. This is actually one of our goals on the road to "building markets", and this of course also applies to prediction markets.

I personally believe that the prediction market has an additional social value: it is not just a trading place, it can also bring more accurate predictions of events. We have seen this in the presidential election - when the mainstream media is still waiting, the prediction market has given directional judgments a few hours or even days in advance. I think we will see this trend in more areas in the future. So I think the prediction market is a "truth machine", which is an evolution of traditional news - sometimes you can even "see the news" before the event happens, which is very interesting.

Bankless: Like many people, I held a presidential election party. The TV was broadcasting mainstream media, but most of my friends were in the crypto industry, so in addition to the mainstream media, we also opened a Polymarket page on the screen. As a result, everyone kept switching between mainstream media and Polymarket to see the data - and Polymarket gave us a more "real-time" feeling and closer to the truth.

Recently, Robinhood has also made a new move on the prediction market. Let me read the press release to introduce this topic: Robinhood recently launched a prediction market section in its App, allowing users to participate in transactions on the results of major global events. At launch, users can trade contracts including "the upper limit of the Federal Reserve's federal funds rate in May" and "the men's and women's NCAA college basketball championships." They look like two completely different types of markets. So, I already know the answer to the first question - what was the original intention of launching the prediction market. But what is more noteworthy is that this product is powered by Kalshi. Can you introduce Kalshi's role in this collaboration?

Vlad Tenev: OK, Kalshi is a DCM (Designated Contract Market), which plays a role similar to an exchange in the stock market. For example, in the stock market, we have NASDAQ and the New York Stock Exchange. Robinhood, as a brokerage, will connect with these exchanges or market makers to match buyers and sellers, and the transaction matching is completed on the exchange. In the stock field, Robinhood is a brokerage, we have introduction brokers and clearing brokers, and we will send orders to exchanges or market makers. In the futures market, which is regulated by the CFTC (Commodity Futures Trading Commission), DCM plays the role of an exchange. Robinhood's role in this prediction market is FCM (Futures Commission Merchant). We are responsible for dealing with customers, providing interfaces and order channels, and then routing orders to DCM for matching.

You can think of Kalshi as NASDAQ, and we are a traditional brokerage. For the presidential election-related contracts, we are connected to another DCM, ForecastEx, a subsidiary of Interactive Brokers. We can actually connect to multiple DCMs to provide users with trading portals for different contracts. However, all the prediction market contracts we provide must be officially listed by the DCM before we can go online.

Bankless: In other words, Robinhood itself cannot launch its own prediction market and can only connect through a third-party DCM, right?

Vlad Tenev: That's right. One of the main reasons why Polymarket, which you mentioned earlier, cannot operate in compliance in the United States is that it is not a DCM. They use a completely decentralized, crypto-based approach to run the prediction market. But this is exactly one of the problems that the market structure legislation we mentioned earlier is to solve: Who should be in charge of prediction markets like Polymarket in the US regulatory system? Is it managed according to the CFTC's commodity contracts? Or should there be a new regulatory framework specifically for "encrypted" prediction markets? There are no clear answers to these questions at present. Only after the legislation is promoted can such markets be legally implemented in the United States.

Bankless: I think our listeners will definitely hope that they can use Polymarket legally in the United States. The last question about the prediction market: Robinhood currently has prediction markets for "federal funds rate" and "college basketball games". What new prediction trading products will be launched next? Can you reveal Robinhood's next plan?

Vlad Tenev: With the launch of our latest batch of prediction market contracts, we have upgraded from being able to launch one contract at a time to being able to launch hundreds at the same time. This involves operational complexities such as clearing, settlement, and dependencies between contract structures, especially series contracts like the men's and women's NCAA college basketball games, which greatly exercises our system. Next, we will soon have the ability to launch tens of thousands of contracts at a time, which will completely unlock the diversity and potential of prediction markets.

We are excited about many areas, especially the development of artificial intelligence. There are some interesting prediction markets around the progress of AI technology, which do provide insights, and our users are very interested in this. But more importantly, I think the prediction market should become a "new newspaper". For example, it should include "front page news" (what everyone is most concerned about now), as well as "sports", "business", "entertainment and life" and other sections. The prediction market can be a miniature model of this information - a form of news driven by real trading intentions.

Bankless: Yeah, "prediction markets as truth machines", I think this is why many crypto users are so fascinated by it. A typical example before was the conflict between Israel and Iran. When missiles began to cross the border, the prediction market on Polymarket provided very cutting-edge and real information. These events not only involve sensitive geopolitical issues, but also very high-risk and high-impact events. We are entering an increasingly turbulent global situation, and ordinary people will naturally want to better understand the probability of these possibilities. So what do you think Robinhood will integrate this kind of global macro and geopolitical prediction market in the future?

Vlad Tenev: I think it is valuable to society as a whole. Currently, the CFTC has certain guidelines for "event contracts" (i.e. prediction markets), such as clearly stating that "prediction markets that are not in the public interest should not be listed for trading." But this "contrary to the public interest" is actually a very vague and broad concept. I think we should try to make this restriction clear, because I believe that the vast majority of prediction markets are essentially in the public interest.

Three product lines

Robinhood Banking Product Line

Bankless: Back to Robinhood. You recently had a big launch event, kind of like a Robinhood Summit, where you launched three new product lines: Robinhood Strategies, Robinhood Banking, and Robinhood Cortex. Let's talk about each one, starting with the one I'm most interested in: Robinhood Banking. What was the motivation behind this product? How did you initially think about it?

Vlad Tenev：The core concept of this Gold event is: we hope that all users can have access to the same resources and services as high-net-worth individuals. High-net-worth clients usually have private banking advisors, investment advisors, and research teams who can help clients find opportunities around the world (whether in the public or private markets). Technology now allows us to provide this "family office-level service" to ordinary users at a very low cost. This is exactly what we want to achieve - put a high-net-worth family's financial team into every user's pocket, and Gold members can enjoy this service for only $5 per month. What we want to do is not just to provide financial services, but to use technology to create a "financial product like the iPhone" - a high-end product that everyone can afford and be proud of.

So the three products we released at the Gold event this time actually have a complete main line of logic behind them: Strategies is your digital investment advisor; Cortex is your intelligent research assistant; Robinhood Banking is your private banker. This is also the first time Robinhood has released an AI product. In the future, you will see more and more cutting-edge reasoning models and intelligent models being gradually integrated into the product experience, realizing deep linkage between products, and truly achieving

"Information is interconnected" to bring an intelligent financial service experience.

Robinhood Cortex Product Line

Bankless: When I read the announcement and saw Robinhood Cortex, I thought you guys were launching an AI agent. I read it more carefully and understood it better. Why don’t you give me an example of how users use Cortex? I guess you integrated it into the Robinhood mobile app, so is it like a ChatGPT for the financial sector? Can you elaborate on what kind of product it is?

Vlad Tenev: Currently in the Robinhood App, Cortex has two main functional scenarios: The first is to answer "what is happening to a certain stock now". We often send push notifications to users, such as when a certain stock rises or falls by more than 5%. Many users will click in to see what happened to this stock. Cortex will explain the reasons driving the current price fluctuations on the stock's details page, and give as clear an explanation as possible.

The second is about options trading. Options are very complex for most people, especially when it comes to combination trading involving multi-leg strategies, which requires a lot of professional judgment. Cortex, with the Trade Builder feature, can automatically build the right combination of options strategies for you based on your prediction of the future trend of a certain stock, making the whole experience magical. We demonstrated it at the Gold event: users select a stock, enter their predictions, and the system generates options strategies that can be traded directly, or enter our new feature - parallel option chain view, which is convenient for operating multiple options trades on one screen at the same time, which is very efficient.

BanklessQ: It sounds like this: you express your trading intention in natural language, and AI receives and processes it and gives you several suggested option combinations. Isn’t it “translating” human language into strategy execution suggestions? Is that the logic?

Vlad Tenev: Yes, but we don’t just match based on your language input. We also integrate various external data, such as real-time market conditions, technical indicators, news information, etc., and then help you better form your predictions. In other words, we not only provide strategies based on your existing predictions, but also help you make more accurate predictions.

Bankless: Can you talk about the underlying structure of this LLM (Large Language Model)? I guess you are not just putting a shell of ChatGPT on it, right? Is there anything special about its data and training method that makes it a real financial AI with Robinhood as the core?

Vlad Tenev: That’s right. Most general LLMs do not have real-time financial data, and their data is often lagging. Therefore, they cannot tell you the “current” price of a stock, let alone accurately explain the reasons for fluctuations. What’s more serious is that they are prone to hallucinations in the financial field because they lack accurate data support. The AI layer we developed solves the hallucination problem and the data real-time problem, which are the two major shortcomings of traditional LLMs.

Bankless: Yes, if AI in the financial sector suffers from hallucinations, the consequences could be catastrophic.

Vlad Tenev: That’s true. But the advantage of finance is that we have the “data truth source”. Unlike writing a historical paper, it is difficult to tell whether there is an illusion or not. Financial data has clear standards, and we can set up “guardrails” to accurately identify “illusions” and make corrections.

Bankless：And this may be Robinhood’s core competitive advantage as a financial AI assistant: you not only have real-time market data, but also user behavior data and data in the context of all financial scenarios.

Vlad Tenev: Yes, that’s a big advantage. Another point is that we can complete transactions in the app. If we can make Cortex “context-aware” of the user’s behavior scenario, it will become more valuable. We don’t want to just put a chat box in the app, which is difficult to use, lengthy, and easy to cause hallucinations. That is a very naive approach, and we deliberately avoided going that way.

Robinhood Strategies Product Line

Bankless: Let's talk about Strategies again: Do you consider expanding this product to crypto assets in the future? Because all friends who are engaged in crypto are asked by people around them: "How should I buy coins?", "How to configure" - but everyone actually doesn't know how to answer. If Strategies can give smart configuration suggestions for crypto assets, wouldn't it be particularly valuable? How do you plan to expand to this area?

Vlad Tenev: Technically, there is absolutely no problem. We have a very long list of features on hand, perhaps dozens or hundreds of features are under consideration. Our main focus at the moment is on what users want most. We chose to start with individual stocks because most digital investment advisory platforms only support ETFs, while our core supports both individual stocks and ETFs to be configured into investment portfolios. At the same time, we have designed a very beautiful interface, such as a donut chart that shows your asset allocation ratio, and can help you automatically rebalance, achieving an "almost hands-free investment experience." As for encrypted assets, we actually considered adding them during the launch phase, and they will definitely be gradually integrated in the future. We are now online, and users can experience it directly. The feedback is very positive, and many people have begun to migrate their investment portfolios over.

In addition, our Strategies have a major differentiated advantage: we have completely overturned the charging method of traditional investment advisory platforms. Traditional investment advisors basically charge according to the proportion of assets under management. Traditional investment advisors charge about 1%, and the cheapest Robo-advisor is 0.25%. This brings up a problem: the more you invest, the more linear the fees increase, but the service does not increase accordingly. For example, a Robo-advisor managing one million US dollars is not 10 times more complicated than managing one hundred thousand US dollars. But you have to pay 10 times more fees. This makes high-net-worth users more and more unhappy. The strategy products we designed have a fee cap: a maximum of $250. No matter how large your assets are, the fees will no longer continue to increase. In this way, the more assets people have, the more cost-effective it is to use Robinhood Strategies, and the more satisfied they will be.

Bankless: The fee cap for your Strategies is $250, which is not charged by AUM (assets under management). Does this mean that Robinhood prefers to treat this product as a "user-driven" business? How does Robinhood benefit from the massive growth of Strategies?

Vlad Tenev: Yes, this fee model is actually a big incentive - it will attract users with a lot of external assets to transfer their funds to the Robinhood platform. Robinhood can benefit from the following aspects: asset management fees, Robinhood Gold subscription fees.

And we have observed that once users become Gold members and move a considerable amount of funds into the platform, such as $1000, they will begin to truly feel the value of the platform and will be more likely to use more of our services, such as credit cards, self-trading, etc. This is what we hope to achieve - to "migrate" the user's entire financial relationship to Robinhood, so that you can easily manage all your funds. As the total amount of funds on the platform increases, our revenue will also increase accordingly.

Cash delivery service

Bankless: Got it. I also wanted to ask you about your new product, cash delivery. When I saw this feature, my reaction was: Is this the "Uber Eats" of cash? Why are you doing this? How does it work?

Vlad Tenev: Yes, we are indeed entering the "logistics business" field, which is also very interesting to me personally. First of all, this is a high-end private banking service. Robinhood has no physical branches, so we asked ourselves: How can we provide customers with a non-discounted digital banking experience without branches? Although cash payments are declining, they still account for 16% of all payments in the United States, and many people still need cash. But if you use a purely digital bank, you can only go to 7-11 or CVS to withdraw money. Obviously, "going to a convenience store to withdraw money" is completely contrary to the "private banking experience."

We asked, can we do the opposite - let the bank provide "door-to-door service"? The current logistics platform is very mature, and it can be delivered in 15 minutes. You can buy an iPhone and it can be delivered directly to your door. So, what we need to do is to move this model to cash services.

Of course, we will not build the entire logistics system ourselves, but will work with professional partners, which we will announce soon. Although it is complicated, we believe it will bring huge value. I used to be a First Republic customer, and they provided a "cash to door" service (although they used armored vehicles to transport large amounts of cash). We are thinking about how to make this "exclusive service for the rich" standardized enough so that more people can afford it.

Bankless: I guess the minimum withdrawal limit you set is not something like $100?

Vlad Tenev：During the demonstration, we set the minimum amount of $200. However, we are still in the exploratory stage. The specific minimum amount, user behavior, average withdrawal amount and other data will depend on user feedback after the launch. However, we expect that the average amount may fall within the range of several hundred US dollars.

Robinhood’s next stop: product matrix and ecological layout

Bankless: Back to the topic of cryptocurrencies. There are not many crypto assets on Robinhood at present. Do you have plans to expand to more currencies?

Vlad Tenev: Yes, since the regulatory environment has improved, we have actually launched a lot of assets, such as Trump Coin, which we launched on the day of the inauguration and was very popular. Now there are thousands of new coins being born every week. We also realized that we need to rethink our asset launch strategy. You should see Robinhood Wallet (our on-chain wallet product) - which is currently relatively separated from the main app - becoming more integrated with the main app in the future.

You will see: the main app gets more on-chain functions; Wallet withdrawals and top-ups will be smoother; Custody + DeFi products are gradually integrated. As the industry matures, our strategy will change from "carefully selecting online assets" to "efficiently optimizing the backend according to demand" to allow customers to choose independently. However, we must also establish a screening mechanism to avoid fueling speculative bubbles and prevent users from arbitrarily contacting high-risk junk coins under information asymmetry.

Bankless: So you now have the Robinhood Wallet, the main Robinhood App, and the Robinhood credit card, which is Robinhood Banking, right?

Vlad Tenev: Yes, now the Robinhood credit card has been merged into Robinhood Banking.

BanklessQ: Is the division of labor between these three applications mainly due to compliance/regulatory considerations? Do you have any idea of integrating them into a "super financial app"?

Vlad Tenev: We did want to make an "integrated app" at the beginning, but the problem is that the design of the homepage has become too important. Active traders and users who use credit card/banking functions have completely different expectations for the homepage. And most users do treat the "trading interface" and "banking interface" separately in their minds.

So, whether to integrate or not, I am open to it. We can try to build a super app, but I am not obsessed with "must merge". What is more important is: unified KYC; barrier-free flow of funds between accounts. Other than that, let the best interface win. We may add more features to our main app, and we do not rule out continuing to let different teams make independent apps, or even split and merge like Uber and Uber Eats.

Bankless: Finally, I want to talk more freely. You know our show is called Bankless, which advocates "de-banking" and emphasizes self-custody and self-management of assets. However, many features of Robinhood actually sound very "bank-like", such as you are really going to launch banking products. Crypto has indeed challenged traditional finance. For example, banks like Wells Fargo only have a savings rate of 0.25% and no innovation. But Robinhood does provide a better choice, and you are not "completely bankless". So I want to ask:

Vlad Tenev: "How bankless am I?" Right?

Bankless: Yes, how bankless are you? Where will Robinhood go in the future?

Vlad Tenev: Actually, we are literally bankless now. We don’t have a banking license. Sometimes people ask me: Do you want to apply for a banking license? Because we will be compared with traditional financial companies that have banking licenses. There are some advantages to having a license, such as: direct access to systems such as FedWire and Zelle; the ability to issue loans, conduct clearing and other businesses.

But our current strategy is to work with banks as a neutral platform. For example, in the credit card business, our partner bank is Coastal Community Bank, and there are other partner banks participating in our cash management program. In fact, many DeFi projects essentially also require bank interfaces - because as long as you want to convert fiat currency into on-chain assets, banks are part of the chain.

I think there will be more "crypto banks" in the future - with certain licenses and supervision, but not as heavy as traditional banks. Such banks can manage key links such as capital pools and reserves, avoiding past crashes, such as Terra Luna, Anchor, Celsius and other projects that "look like banks but have no real rules". I have always been a market person, and I believe in free competition and fair supervision. These two worlds - traditional banks and crypto technology - must eventually merge rather than separate.

The article comes from the Internet:Dialogue with Robinhood Co-founder: Why don’t we build our own chain?