Vlad Tenev Wants to Tokenize SpaceX & OpenAI on Robinhood

Transcript

we wrote an op-ed actually in the Washington Post a couple months ago that that I published that makes the case for uh tokenizing private securities so if if you think about it right now it's hard to invest in OpenAI or SpaceX as a private company um and I think crypto can help solve that so uh if you if you tokenize private companies it'll be good for the companies and also for for investors it's crazy to me that you can't invest in companies like SpaceX and Open AI but you know we have clarity on memecoins and people can basically invest in those freely welcome to Banklist where we explore the frontier of internet money

and internet finance today on the show I'm talking to Vlad Tennv the CEO of Robin Hood robin Hood is increasingly becoming a power player in the world of crypto mainly just due to their sheer size of their user base in AUM robin Hood entered crypto markets long ago both with uh making crypto accessible in the Robin Hood app but also the Robin Hood wallet uh a non-custodial crypto wallet robin Hood's furthering of their own frontier in the crypto space has really been put on pause due to the regulation by enforcement stance of the previous SEC but now that is behind us so I'm looking to learn a little bit more about what's next for Robin Hood when it comes to integrating crypto into their product offerings now that they have gotten the green light from the SEC then completely coincidentally the week that I recorded with Vlad Robin Hood

announced some pretty big new product lines uh these are Robin Hood banking strategies and Cortex so I was also able to talk to Vlad about all of those things as well and then also maybe the most interesting part of the interview definitely my favorite part was the dual discussion of the increasingly high hurdles it takes for companies to go public in today's traditional stock market and how that fact is interacting with the tokenization movement some of the biggest most exciting companies of the modern age SpaceX OpenAI Anthropic these are all private companies with no formal market even though equity does change hands in the private market uh Vlad thinks tokenization can play a big role here to give liquidity to these private companies while also giving

financial opportunities to end investors who want access to private equity that is working on the technological frontier i think that is a match made in heaven uh and it would make sense if that marketplace was found on Robin Hood anyways I really enjoyed this conversation with Vlad even though Robin Hood is not entirely a bankless platform I enjoy Robin Hood putting pressure on old archaic traditional finance because that's just good for everyone so let's go ahead and get right into the podcast but first a moment to talk about some of these fantastic sponsors that make the show possible in the wild west of DeFi stability and innovation are everything which is why you should check out Frack Finance the protocol revolutionizing stable coins DeFi and Rolex the core of FRA Finance is FRAUSD which is backed by Black Rockck's institutional bidd fra

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also each time that Vlad has come on Robin Hood has gotten a little bit deeper into the world of crypto as well vlad excited to have you back on welcome to Banklist thanks for having me always a pleasure so you guys just came out of uh some pretty big product announcements uh Robin Hood strategies Robin Hood Banking Robin Hood Cortex pretty uh pretty good timing for this podcast episode but that was actually a coincidence i want to we're going to get there i first want to talk about uh some more cryptonative subjects mainly this new era of regulation in crypto uh crypto inside of the United States so this new administration has unlocked many doors for the crypto industry inside the United States especially for institutions who have always wanted wanted to enter the crypto industry but

have really been too uncertain or risk averse uh due to just regulatory uncertainty so now with this new administration what doors have specifically been unlocked for Robin Hood uh what can you guys do now that you couldn't do before and which doors are you going to go through first yeah I think the the immediate thing was the sessation of regulation by enforcement so like a just a big improvement is to not be under allout assault over all aspects of the crypto business so you know there was the announcement that the SEC closed its investigation into crypto along with uh the crypto businesses of some other

companies in the industry and I think what you felt was immediate relief the feeling that we can just move forward as a company and as an industry without having to deal with this relentless onslaught uh where it was very very clear that the previous administration had a view that crypto shouldn't exist in substantive form and should certainly not be allowed to integrate with the uh traditional financial system so I think that was a a big boon and now there's two big things that are underway legislatively so I I should be clear i mean cessation of of enforcement is a

big thing there was also clarity on memecoins which you probably saw the SEC issued a memo um on memecoins specifically saying that they were not securities and this was basically uh something that was not very controversial i mean the the whole thing with memecoins is uh it was a fairly easy legal analysis to determine that they don't qualify as securities but everyone was kind of independently doing this analysis for every coin the the folks that were doing a good job at this including Robin Hood were you know doing rigorous analysis for every coin including a security analysis and that was expensive and burdensome so so

having this sort of like clarity uh was very useful and similarly there's more clarity about staking whether staking is a security and and that's a great thing as well because if you think about staking um you know it's it's uh people are are contributing their own compute to supporting the blockchain there's staking providers that aim to reduce the complexity of that and generally that results in more yield more crypto in customers pockets um so lack of clarity there was actually just hurting us consumers because they couldn't generate as much yield from from uh platforms

that are more regulated and so having clarity there is good and there's two big legislative initiatives right now stable coin and market structure stable coin is going to come first and I think that'll be that'll be welcome and it's good um but market structure is what we're really excited about and I think that's the mechanism by which we'll have clarity on how we can incorporate crypto technology into real world trady assets like securities uh also like uh yield bearing stable coins as well as prediction markets we'll have to outline what qualifies as a crypto asset security versus a crypto

asset commodity and also what steps we would need to take as a platform to list crypto asset securities and what would it take as a company or as an issuer to actually issue crypto asset securities to the American public i think those are the big questions and getting legislation to help us answer the questions is what's going to unlock the true power of crypto technology so that's what we're very excited about and you had mentioned um you know uh companies that are working on connecting uh stable coin so you you can essentially do banking backed by stable

coin where your stable coin is staked or put into some kind of pool that generates yield um I think crypto market structure legislation would actually unlock those types of products and and you'd have more competition in the banking sector um I don't think stable coin is quite there because it doesn't stipulate yield bearing stable coins so more regulatory clarity is needed to to actually put that on firmer footing but we're optimistic it'll come and you know we're we're engaged in Washington to help in this legislation and I I think it's heading in a positive direction so So we're feeling good mhm i think maybe uh if I'm hearing your answer there are

a bunch of product lines that theoretically exist that are out there that we really need that market structure bill to get through Congress so that we can stop being in this exploratory phase this ideation phase and actually stop being in this building phase um is that is that kind of is that is that correct yeah 100% yeah so so effectively you know a stable coin for example that bears yield that pays interest directly to holders um resembles a money market fund right stable coins themselves uh resemble money market funds because there literally are money market funds that hold uh treasuries and so you know that that's where it stable coins being

treated a little bit differently uh and and has been for a while but I think that's where the the regulatory clarity can come in what about the uh vertical of tokenization because I think that is just a super hot topic with anything that is in the world of trady because I think that's really kind of the uh the conduit between the world of traditional banking traditional finance and the world of crypto is like let's let's tokenize some more assets and start to leverage and lean into the value of public permissionless blockchains uh where is Robin Hood's role in this like tokenization movement i'm assuming you guys are bullish on it um do you guys see yourself as an issuer a platform will Robin Hood create tokenized products or will you guys are you just

interested in being the marketplace for these things like where do you guys stand in this like tech stack of of tokenization yeah so tokenization by by this definition is taking a noncryptonative asset and uh assigning it representation on a blockchain so that it's freely tradable so uh we already have it with uh stable coins stable coins are in effect tokenized treasuries and also you know Paxos has a tokenized gold product for example that's a that's a very interesting product and we actually partnered with Paxos and a few other companies on USDG the dollar global network which aims to build a stable

coin that's available globally that pays an attractive yield to holders and the next step would would obviously be tokenization of securities which we're very excited about so that allows you to have ownership in companies um in the same way that stable coin legislation uh ensures US dollar dominance globally which which I think is why people are excited about it and you're having so much excitement particularly in Washington around it everyone wants US dollars in user US treasuries to be accepted and and purchased and for there to be high demand for those products globally particularly as more countries

are moving away from US treasuries so stable coin is is viewed I think rightly as an area that could increase demand among individuals overseas as governments you know be become become prone to diversifying away from holding treasuries so in the same way that stable coin legislation can kind of push forward US dollar dominance uh I think tokenized securities can can can really push forward US company dominance in the global market so we increase the pool of shareholders for for US companies right now it's very difficult to invest in a US company if you're overseas and and so in the same way that stable coins made

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

that I published that makes the case for uh tokenizing private securities so if if you think about it right now it's hard to invest in OpenAI or SpaceX as a private company um and I think crypto can help solve that so uh if you if you tokenize private companies it'll be good for the companies and also for for investors it's crazy to me that you can't invest in companies like SpaceX and Open AI but you know we have clarity on meme coins and people can basically invest in those freely if I'm putting some of the the pieces together uh there is um like a market for SpaceX equity out there like it's not crazy to have a friend who just managed to find a way to

to access SpaceX uh SpaceX equity and so I think what you're kind of saying is like well we could since there's already a market out there it's in the private market sector we could tokenize that equity and make that into a more formalized more structured market uh use using crypto rails to do that uh and then I would imagine Robin Hood would love to be the marketplace to service uh tokenized equities at least if I'm putting pieces two and two together that's that's seems like a very viable future uh is this is this kind of the road map that that you see and like how kind of how how close are we how close are we into tokenized SpaceX equity on Robin Hood yeah I think Robin Hood sits at the intersection of Tradfi and crypto

so we have all the crypto technology we have all the traditional financial infrastructure you know we we've got multiple broker dealers so I I think that's that's an area where we could contribute to the ecosystem and I I think in the future this will look something like an ETF issuer so ETF issuers you know there's ETFs that hold a basket of securities and then issue shares of the ETF in a way that's a precursor to tokenized securities right and there's a creation redemption process where if you have if you come to the ETF issuer with a basket of those securities they'll redeem it for uh for

a share of the ETF and vice versa you can redeem the ETF for for the underlying basket of securities so that I think that's an analogy of what already happens in Tradfi that tokenization can can kind of evolve using crypto technology there's been um not a substantial decline but the trend of public market IPOing is towards a lower number uh simply just because costs of IPOing are just so high so prohibitive uh for companies like the bar just seems to be getting higher and higher for companies to get over in order to access uh public capital markets um do you think that because of this trend that that will also push tailwinds towards this kind of private

market tokenization uh frontier or is that just like too compliant too difficult in terms of just like nation state compliance and unwieldy in terms of just like what finance norms are what do you think about that i I think the way it's headed is tokenization of securities kind of paves the way towards an IPO alternative m I think that'll happen and uh even if it doesn't happen in the US soon it'll happen internationally right because many countries are setting up their frameworks for issuing crypto asset securities and crypto by its nature is global so if you can issue a token of a company on a blockchain regulated in one

jurisdiction you you sort of immediately tap into this global market that's getting increasingly more liquid and has you know hundreds of millions of of participants around the world so I think that's that makes it an inevitability that it's embraced by by the US as well and I think there's two use cases if you're a private company at the absolute early stages of company formation this is primary capital right it's the equivalent of a traditional IPO where you're raising capital from shareholders i think primary capital is very very useful at at the earliest stages because I remember being an entrepreneur running a seedstage company when you're in fundraising mode it takes up a ton of

your mind share and resources and those resources are really really meaningful when you're a small company so if I had an option to just tap into a global pool for raising capital and get my fund raise done very very quickly that's a compelling value proposition for an early stage founder uh so so I think it could help you you'll just get a lot more companies you'll get a lot more companies a lot more projects and a lot more exposure at earliest stages where the risk is highest but also the upside opportunity is greatest for for investors and for a late stage private company something like an open AAI or SpaceX the value proposition shifts so I think it's less interesting to the

founders of those companies at that point because they've already raised a ton of money maybe they're planning an IPO or or other things but it becomes very interesting to employees you know some of these companies have thousands or tens of thousands of employees they're looking for liquidity they they don't have visibility as as to when there's going to be an IPO or liquidity event and so the employees are interested in diversifying a little bit uh and that becomes a strong value proposition and you have uh secondary platforms you know platforms like Equity Zen or Forge or some others that operate in this space and they actually right now go to employees they reach out to employees of

these companies because that's the receptive audience for diversifying and selling secondary shares um now the problem with those uh with those models is the liquidity is actually split so uh the platform itself has to go out and figure out how to get supply and bring it on uh whereas crypto benefits from interoperability where you just have to get it on the blockchain and is freely tradable and you immediately access that global liquidity which is why I think that it's it's such a great technology solution there seems to be just a handful of different like trends that are just clearly pointing in this direction and there's just a bunch of

cool companies out there SpaceX um OpenAI that are just private and and not seemingly interested in going pro uh public just all of these uh AI labs for just a broad category just don't have public equity or they're like Facebook or Google or just something way too large where it's just like too dilutive of a of a investment vehicle to get exposure to AI if you want exposure to AI as a retail investor your options are incredibly limited i mean you have like Nvidia which is multi- trillion alphabets multi- trillion and Tesla of course but there's a huge gap you you can get exposure to open AI or anthropic or perplexity or any any of these

interesting AI companies yeah yeah and if you just look at the public markets you just see the you know multi-deade long trends of uh the opportunities are getting today in the modern age opportunities are now no longer in the public markets they're in the private markets partly what I said earlier is just the cost of the compliance cost of IPOing is just getting higher and higher and higher and meanwhile crypto is like offering the technology to be an answer to that i just see like multiple different tailwinds pointing towards this inevitable conclusion uh of tokenized tokenizing private market uh equity and that actually becoming more or less the pseudo public markets of sorts okay so uh I also kind of want to get into the world of prediction markets

because this is something that Robin Hood has also entered into i think there's this like tagline of Robin Hood of markets for everything am I hallucinating that or is there some sort of like like actually official brand of just like that's what your guys' goal is uh fill in the gap of my understanding here yeah I mean we haven't used that tagline specifically as Robin Hood okay so I did imagine that the name of the company is Robin Hood Markets right that's our that's our uh that's our parent company and so the mission which you probably which you probably heard is democratize finance for all m and uh what that means is generally speaking if there's a market we believe in markets and and we think that if there's a

market that we should facilitate it and uh allow our traders to access it and uh generally if it's an institutional market and retail is interested in it retail should should be allowed to access it on a level playing field to institutions as well so those are those are a few of the of the uh sort of like north stars north stars about offering markets so that applies to prediction markets as well but I think prediction markets have an additional value for me personally which is there's a societal benefit for that market being robust outside of just trading which is having

a robust prediction market means you have better predictions across a wide variety of events we saw this in the election where the prediction markets gave you that information hours or even days before the traditional media uh and and I think you're going to see it across multiple different categories so I think prediction markets are truth machines and they're an evolution of the news they're an evolution of the newspaper where in some cases you even get the news via prediction markets before it happens which uh which I think is super interesting yeah I uh hosted an election party like many people do and of course we had mainstream media on the news but uh I'm just primarily friends with crypto people and so in addition to having mainstream media we also had Poly

Market on a screen and everyone was slipping back and forth between Poly Market and the mainstream media and Poly Market was actually the more interesting thing to look at because it was actually giving us the data that we felt was much more real time uh so in a um a recent announcement out of the Robin Hood let me just read this and we'll get into the prediction markets uh section more more definitively recently uh Robin Hood announced a prediction markets hub directly within the Robin Hood app giving customers the opportunity to trade the outcomes of some of the world's biggest events at launch the hub will allow customers to trade contracts for what the upperbound of the target Fed's fund rate will be in May as well as the upcoming men's and women's college basketball tournaments two very different markets uh maybe uh so I think

you kind of already answered my first question which was what motivated the integration of a prediction market into Robin Hood um but uh notably this uh prediction market product is also powered by uh Kalashi uh maybe you could go into uh that actual partnership between Kalashi what's Kalashi's role and the uh prediction market that's found in Robin Hood yeah so uh Kalshi is uh designated contract market a DCM and you can think of uh DCM as akin to an exchange a stock exchange so uh in in equities land there's exchanges like the NASDAQ uh and the New York Stock Exchange uh brokers including Robin Hood

connect to exchanges or market makers that trade on these exchanges where uh the buyers and sellers are actually crossed and um the exchange essentially uh creates a market so in in equities land Robin Hood's a broker we have an introducing and clearing broker we route to market makers we also route uh directly to exchange and exchanges are where the individual buy and sell orders cross in futures land CFTC land there's designated contract markets DCMS which are like the exchanges where the buyers and sellers meet and then uh FCMs future commissions merchants which is what Robin Hood is in this case we're an FCM

so we're responsible for the customer relationship the interface and then we route uh to DCMs uh and via market makers for for the orders to be crossed so uh yeah you you can think of Kali as analogous to the NASDAQ or NY and we're playing the the role that we always play as a broker and we we also um for the presidential election we connected to a different DCM called forecastex which is a uh a subsidiary of interactive brokers so we have the the capability of connecting to multiple DCMs and offering different products offered by offered by those exchanges and actually the DCM is

who has the ultimate responsibility for listing the contract so all the contracts that we list have to be uh listed on a DCM in order for us to offer them okay so you cannot offer your own prediction markets it has it has to be on a third party DCM correct yeah and and actually one of the reasons why uh poly market which you mentioned poly market prediction markets are not available in the US is because they're not a DCM right they're they're they're taking this uh crypto technology approach and you know I think this is one of those things that's going to need to be clarified in that market structure legislation that um we were talking

about a little bit earlier so you know obviously the CFTC regulates ates these things as commodities uh they have lensure so uh would polyarket style prediction markets be handled under that regime or is there going to be some other regime because it's crypto so th those are kind of the the big prediction markets questions that we need legislation before uh allowing something like like poly market to operate in the US yeah I think uh everyone listening to this would definitely enjoy being able to access poly market inside of the United States um one last question on the prediction markets side of this thing uh so we are starting with the Fed funds rate and also men's and women's basketball uh but what next what what

are the future prediction market uh bets that people can make on uh on Robin Hood in the near-term future yeah so with this latest uh round of contracts of of markets that we listed we've gone from having the capabilities to list one at a time to listing hundreds and of course uh the operational complexity of clearing and paying out and setting up new contracts that are depending on previous contracts uh that that's really you know the men's and women's college basketball really has put that to the test so we're soon going to have the capability to go from hundreds to thousands which really opens up all types of prediction markets so we're excited about economic uh I'm excited

about artificial intelligence progress you know there's some very cool prediction markets that give clarity on you know different AI developments which I think our customers are very very interested in but really I think it should be the newspaper right there's front page which is what's trending right now in the world that people are curious about there's there's your sports section your business section arts and leisure style um I I think that's a good microcosm for what we need prediction markets on those are basically the categories yeah prediction markets as a truth machine I think is um one of the reasons why crypto people are so pilled on prediction markets uh and there's been examples in the past of

pretty like big and also sensitive geopolitical events uh that have happened um Israel versus Iran when the missiles were going across the border uh there was a prediction market or set of prediction markets on poly market that was actually truly informative about what people thought about the about future events and at the same time highly consequential kind of sensitive subjects yeah uh but also you know high stakes and and very important because I think you know if we are entering a unstable geopolitical future people would appreciate understanding what the market thinks about the likelihood of certain outcomes uh how how do you think about this uh as a like the the idea of you know integrating high stakes global macro geopolitical uh prediction markets

inside of Robin Hood i think that it's important for society right i think that there's a current CFTC uh guideline for prediction markets and event contracts as they're called and basically it stipulates that you know prediction markets that are contrary to public interest um shouldn't be listed and I I think that that's a somewhat vague uh general category of thing but we should make sure that we cabin that as as much as possible because I I really think the vast majority of prediction markets are in the public interest imagine a world where your day-to-day banking runs on a

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across whatever chain that you want with Infinex that was so easy go check out Infinex and try your first switch today uh okay so let's get into some recent product announcements that uh just happened this week y'all had a pretty big event uh uh Robin Hood Summit of sorts uh and three different uh verticals new verticals out of Robin Hood were announced robin Hood strategies Robin Hood banking and then Robin Hood Cortex uh so maybe we can kind of go one by one through these things and maybe you can talk about the the motivations uh for building each one of these verticals um I think uh start with let's start with Robin Hood banking because I think that's the uh product that I think is the most interesting to me um so uh give me give me the details on that and what motivated that creation

of that product line in the first place yeah I mean the the overall inspiration for the gold event is we want to give all of our customers the same access opportunities and strategies that a high- netw worth individual would have their team of financial experts that help them with their financial life so high netw worth individuals have private bankers they have investment adviserss they have research assistants that help them scour the entire world private and public for opportunities and with technology we can actually provide the value of a lot of these services to customers for a very very low fee so that's kind of the north star we want to put a sophisticated high-n netw worth

family officel-l like financial team into everyone's pocket and give it to our gold subscribers for as little as $5 a month and I think uh I think that's sort of like the promise of something like the iPhone applied to financial services how can you give someone a luxury product a product that you know people are proud to use and be associated with because it's high-end but can you offer that at a price point that makes it truly accessible to everyone where everyone just sees the the extreme value and so that's the thread behind the three products we announced at the gold event strategies is your digital investment advisor Cortex is your research assistant and

Robin Hood Banking serves as your private banker and I think in the future this is also the first AI product that we've rolled out uh within Robin Hood so I think in the future you'll see the latest intelligence models and reasoning models actually imbued further and further into the product experience further stitching these two together and and really providing you a great experience where everything is aware of everything else yeah when I uh was reading this announcement I saw the Robin Hood Cortex and I was like what robin Hood's releasing an AI agent uh but then of course reading into it makes makes a little bit more sense maybe you can kind of just like uh give us an example of like how someone might use

Robin Hood Cortex i'm assuming it's going to be in the Robin Hood app the econical Robin Hood app and then you just ask it questions about stuff that's going on in finance is it just kind of like an LLM for uh that's financially themed like pop open the hood a little bit more and color that in for us yeah so right now uh there's basically two applications of it within the Robin Hood app one is to answer the question of what's going on with a stock right now so if you use Robin Hood from time to time we send notifications about market movements if a stocks up or down 5% and then a very typical use case is to go to the stock and figure out what's going on i don't know if you've had that experience certainly yeah but yeah

Cortex answers this on the stock detail page you go to the stock and it'll tell you it'll explain what's driving that movement to the best of its ability so those are stock digests and we also wanted to tackle another use case which is around options trading so options are very confusing you have to really uh process a lot of information and you have to be quite experienced in order to construct an options trade particularly one that has multiple legs like a multi-leg options trade and what Cortex uh does via trade builder is uh it takes a prediction about what a stock's going to do at some point in the future and

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

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

you as an individual in in making your prediction can we talk about what is actually uh in the DNA of this LLM i'm assuming this is not just a chat GPT rapper there's a little bit more precision going on behind the scenes so like how what's unique about like the data that is trained upon or any sort of information about like the post training or anything that really makes this a Robin Hood financed themed LLM uh how is it unique yeah um so most typical LLMs don't have real-time market data or financial data uh you know they they have stale data so they can't really without integrating external tools even tell you what the stock price is of a of

a stock right now and basically when when they provide financial uh information they hallucinate uh because they they don't actually have access to the real time data and so what we've built is a layer of technology on top that ensures that the data that you get is going to be uh interpretable and hallucinationfree so that that solves the two biggest problems that typical LLMs have yeah I would imagine hallucinating inside of a finance context could be catastrophic if we do not get that right yeah 100% but the benefit is we have a source of truth so unlike you know writing a history essay

where you're hallucinating is somewhat ambiguous if it's financial data we have the data so we can build guard rails and we know we can identify the hallucinations precisely right and this is kind maybe the competitive advantage that Robin Hood has in the endeavor of creating a finance AI you know assistant which is you guys also have real-time market data you guys have user data you guys just have you guys have a bunch finance related data and so I'm sure that's just being uh coupled right in into the uh the value of the LLM itself yeah that's one advantage the other is that you can actually transact within our app so if we can make Cortex contextual to where you want to perform an action then it can be more useful um

yeah what we didn't want to do is just put a chat box in the app yeah because people don't know how to use that it can provide output that's superfluous and wordy and you know has hallucination problems so I think that would be the the naive solution that we just wanted to avoid mhm uh getting into uh the strategies side of this going back there for a quick second is there a potential future where this same strategies product is pointed towards crypto assets uh because every anyone in the crypto industry anyone listening to this podcast probably has all of their friends asking them hey what do I buy or how should I invest in in crypto because they don't know um it would be really nice to have some like pretty

sophisticated cryptofocused strategies that you know contain crypto assets uh what's it take to point this strategies product towards the crypto industry yeah there's no uh no technical reason why why we hadn't done it i mean we we have literally a list of probably dozens maybe even hundreds of features that we could bring to strategies and we want to see what customers want most um I think we've got a great foundation we wanted to start with individual stocks because most other digital advice platforms offer ETFs only so we built the capability to put individual assets and individual stocks in the portfolios we

of course support ETFs as well and we built a really nice interface where we have a a ring that clarifies your asset allocation uh we can rebalance on customers behalf so it's as close as possible to just a an invest handsoff button as you can get and you know crypto is is definitely something we considered for the launch uh it's something that we can add along with you know other assets so uh I I think you'll see strategies continue to evolve but uh yeah we're we're excited it's available right now customers can try it we're already starting to get good positive feedback and people are moving their

their their portfolios um well I should say the one huge differentiator for strategies is it inverts and breaks the traditional advice uh pricing model so all other advisors out there uh pretty much all I wouldn't say uh not not absolutely but your typical advisor charges an asset management fee uh so you know it's somewhere between 1% for a traditional adviser 0.25% for a robo advisor on the low end and what that means is as your portfolio grows the amount you're paying scales with that but the amount of value that

your digital advisor is offering doesn't scale linearly i mean having a robo manage a million-doll portfolio isn't 10 times as valuable or 10 times as hard or even significantly different than managing a $100,000 portfolio but you're paying 10 times as much so so this had the nasty side effect of if you're a wealthy customer and you're putting more and more money into one of these services you're sort of like getting less and less happy as that as time goes on which is not what you want as a customer but it's not what you want as a business you want customers to get happier as their wealth with you grows and so Robin Hood Strategies introduced an innovative cap fee model where you're not going to be paying more than $250 in

fees regardless of how big your your portfolio is so if you have a million dollars uh the value proposition of switching uh into Robin Hood strategies is actually quite high how does that change the incentives of this product then because this has not become like an AUM uh incentivized business this becomes more of a quantity of customers incentivized business so how does how does Robin Hood benefit from like big growth of strategies as a product if you guys are capping the fees that you charge uh to just $250 max per customer yeah well I mean uh it it incentivizes the it's a huge incentive for customers that have significant assets outside of

Robin Hood to to move them in and we benefit from that with the asset management fee we benefit from that from uh the Robin Hood Gold subscription and what what we're what we're seeing is once you become Robin Hood Gold subscriber and you have uh a good chunk of your wealth with us um let's say you you put $1,000 in there you're starting to see the value at that point and you will tend to use more and more of our services including the credit card and uh the self-directed traded trading capabilities yeah it's really about getting as much of that financial relationship as possible and making it

easy for you to put all of your dollars into Robin Hood and then you know we do see our revenue scaling with with the number of dollars that that we have in there understood one uh two more things on the uh this new product lineup uh is this one one thing I want to ask is this uh cash delivery service uh which I I'll describe as like uh Uber Eats but for cash I think is is maybe pretty pretty accurate can you talk about like why why did you guys need to build a Uber Eats for cash uh and then how does it all how does it work so like popping up with the hood how does like money get transferred around we're getting into the logistics business uh which is also very exciting for me um yeah so this is a private banking high-end service and two things

one is we don't have branch offices so we asked ourselves how can we bring how can we give you digital banking where you're not actually making sacrifices and without a branch office one of the sacrifices is if you need cash which by the way 16% of all payments in the US are still cash payments so you know it's decreasing but certainly not obsolete so Uh cash is still important for a lot of people um for for various for various needs but if you need cash you have to go to a 7-Eleven or a CVS or something like that if you're a uh digital banking customer at another neo bank and uh nothing says private high-n net worth

banking than going to the 7-Eleven to to pick up cash right so obviously that didn't work we we needed a new solution and so we asked ourselves what would it take to have the bank come to you and nowadays you know these on demand logistics platforms have gotten very very robust you know they can they can bring stuff to you in 10 or 15 minutes uh you can buy an iPhone and get it delivered to your house right and that's a small big ticket high dollar amount valuable item so um this is a solved problem so we're we're going to be announcing who we're partnering with um we're obviously not doing the entire endto-end logistics chain ourselves but we're working with partners and it's

it's a it's a complex endeavor but we think it's going to provide a lot of value you know as a matter of fact I was a First Republic customer before the merger and one of the really valuable things that First Republic had was cash delivery to your house but of course the cash was in much larger amounts and it came in a in a armored vehicle right um and so it is a high net worth feature to get cash delivered to your house and we kind of asked ourselves how can we make it available to the mass market interesting i would imagine that the minimum on this feature is going to be something higher than like $100 well in the demo I demoed $200 but um I think it's still Yeah it's it's still um

it's still kind of open to to discussion so as as it rolls out we'll learn a lot more about how this works and what the hard parts are and also what uh customers want and what the typical ticket size is i anticipate the the average ticket size is going to be in the low hundreds of dollars all right getting uh back into the the crypto uh topics cryptopheros topics um when more crypto assets in Robin Hood because there are not that many crypto assets available in inside of the Robin Hood app uh what are the plans to just list a wider variety of crypto assets in the uh Robin Hood marketplace yeah I think well we've we've been adding a lot of assets since the election and I think we offer most of the high volume ones that

customers are interested in trading you know Trump coin we listed you know uh the day of the inauguration so that that was that was very popular we've been adding a lot of assets and I think now there's a ton of new assets created uh each week you know tens I think I've heard hundreds of thousands and so I think we recognize that we need to sort of like rethink the approach with assets and I think what you should see what what you should expect to see is Robin Hood wallet which actually is a DeFi onchain product um which thus far has been like very disjoint from the main Robin Hood app i think those will uh

will get closer together over time since you know we're we're getting more and more clarity over time and you should see the custodied app the main Robin Hood app uh get some onchain features and also the wallet app will make it easier for you to bring fiat in and and take fiat out so I think these these things at Robin Hood and also industrywide will probably converge a little bit more there will be less of an onus on listing and listing will almost be like a optimization that we do on the back end if if we want to make things more efficient and streamlined if we're seeing a lot of volume but I think the the way it's going is customers will

have more and more choice uh going forward and you know Rob Robin Hood aims to facilitate that while also making sure that if you're in a world where there's hundreds of new tokens every week um customers could get confused it's going to get hard to distinguish high quality from low quality and we also have to have to figure that out and make sure that you know we're we're not just uh facilitating you know unreputable tokens and you know making it too easy for customers to do things that they don't want to do uh so there you have the Robin Hood wallet the core Robin Hood app there's also Robin Hood credit card which is I think also where Robin Hood banking is going to be if I'm

understanding that correctly robin Hood credit cards becoming Robin Hood banking oh understood okay okay so that's three applications is a division between these things is that all just like regulation and compliance and is there a vision to just kind of consolidate everything into one gigantic financial super app yeah we started out with the idea that everything should be in one app uh the problem with everything in one app is the home screen becomes very very important right and maybe the home screen experience that you need if you're an active trader is not the same one as if you know you're a banking customer that you know uses our credit card so I I do think most customers have a mental model where their default

interface for trading differs from the one uh with banking and I think it's possible to actually unify them and combine them but it it hasn't really been done with too much success before so basically what what my philosophy is is I'm open to experimentation like the super app thing I'm I'm intrigued by uh we could probably get it to work but I'm not dogmatic about necessarily having everything in one app i think what's important is having unified KYC and easy money movement between accounts and otherwise you know let the best interface win we we probably will be you

know adding more things to the main Robin Hood app we're also open to our teams creating their own apps and you know we might end up with with more than three um and then like Uber and Uber Eats we might end up like recombining and splitting over time depending on what we learn vlad uh as we wrap up this interview I kind of just want to speak freely for a moment about um uh Robin Hood and its relationship with crypto and its relationship with fintech because as you know this podcast is called bankless and we promote uh going going bankless uh self-custody of one's own finances self- custody of one own's crypto assets uh parts of Robin Hood are very banky in fact incred like

you guys are actually launching a banking product and I think crypto and especially DeFi has had the kind of like free real estate of competing with traditional finance and their 0.25% APY savings accounts that you would get in Wells Fargo uh just like you know terrible products and innovation coming coming from old Tradfi uh and and and yet uh I appreciate Robin Hood coming into the market and actually providing some real competition in the world of traditional finance uh but also at the same time I'm like well they're not completely bankless but nonetheless I also see more and more crypto products and features coming online into the Robin Hood product suite so I guess I'm

kind of just loosely asking like how bankless am I how bankless are you how bankless will Robin Hood be in the future and like kind of where do you guys fall on that where do you think the equilibrium lies in like the bankless or non-bankless side of Robin Hood how could you be so bankless um yeah so we we actually I mean literally we are bankless we don't have a banking charter uh and you know sometimes I get this question of like how uh are we going to get the charter what does that look like um because we also get compared against traditional financial companies that have bank charters and there are reasons to get charters you know plugging into Fed wire

the system plugging into you know zel and all these other things being able to lend um but what we do now we're we're neutral platform we partner with banks whenever uh you know we we we need banking for uh different things we have great partners that that provide that coastal Community Bank on the credit side and banking as well as a bunch of other partners that are part of our cash sweep program a lot of the big crypto and DeFi protocols actually need banking relationships uh on the back side if you want to actually take your fiat dollars and get them on chain a bank is uh is

part of the process uh and and I think over time if we have clarity there will be crypto banks which are basically banks that need that will get some sort of lensure that have restrictions that are hopefully less ownorous than an OC national banking charter but still govern you know treasury management and reserves and and all those sorts of things um because you know if if there's no rules customers also get burned you remember uh anchor protocol probably with Teral Luna and uh you know Celsius and and all these things that you know actually seem bank-like in their presentation but don't have some of the

critical things so um I'm I'm I'm really as we started a fan of of markets level playing field competition and I think these worlds are likely to converge more than more than diverge and there's good things about the traditional banking system that need to make their way into crypto and obviously the reverse there's amazing things about crypto technology that make sense to to incorporate into the banking system and I think we're now at the precipice of of being able to bring these two together and and that's going to be an exciting time for the crypto industry and for the customer uh there'll be more utility so I think if we if we can make some small

contribution as Robin Hood to to driving that convergence I think I think that'll be really good i think it's also uh worthwhile to note that it is useful to have Robin Hood to provide some competition on the crypto exchange side of things as well uh because there aren't that many crypto exchanges out there uh and so entering into the market and being as a competitive force in in our side of the uh the financial line I think is also useful vlad thank you for coming on Bank list today i've really uh just learned a lot in this interview i'm just kind honestly pretty excited about the future of Robin Hood thanks we've got a lot to build but yeah I appreciate the time bankless Nation you guys know the deal crypto is risky you can lose what you put in but nonetheless we are headed west this is a frontier it's not

for everyone but we are glad glad you are with us on a bankless journey thanks a lot [Music] [Music]