Why Robinhood Chain Saw Memecoins Take Off Before Real World Assets

Transcript

And I wouldn't be surprised in if in a few year everything is tokenized and you can access any exchange 247 because the benefits u kind of outgrew the the old regulations that are in place. >> Hi everyone, welcome to Unchained, your no free source for all things crypto. I'm your host Laura Shin. Thanks for joining this live stream and we will first take a quick word from the sponsors who make the show possible. This episode is brought to you by Cape, America's privacy first mobile carrier. Same premium service you'd expect from any other carrier, but designed so your number, your location, and your data actually stay yours. Get 33% off 6 months at cape.co/chained.

Today's guest is Johan Kerrot, SVP and GM of crypto and international at Robin Hood. Welcome Johan. >> Hey, how are you doing? >> Good. You must be doing good. Congratulations. Thank you. We are excited. >> Yeah. Yeah. I mean, the last couple weeks just must have been pretty wild for you guys. You know, you launched Robin Hood chain. Um, it's already got about $200 million in TBL and DeFi. Um, but what was interesting is on July 2nd on CNBC, Robin Hood CEO Vlad Tennvive said that he felt that RWAs were the future of crypto and memecoins were not very beneficial. But then of course

we've seen trading of memecoins just really take off on Robin Hood chain. Uh Cash Cat which is affiliated affiliated with Robin Hood's early days has been taking up a lot of the air in the room. And of course after that happened he tweeted that Robin Hood chain also works great for memecoins. Um, but you know, looking at the numbers, I saw RD RWAS are still just about $17 million of the market cap of Robin Hood chain and you know, these numbers are changing a lot, but um, according to like some rough calculations I did a few hours ago. Um, it looks like maybe about 85% or more of the daily DEX trading activity on Ramadan chain is actually memecoins and only about 1% RWAS. So why do you think

the numbers have ended up in this way? Well, you know, I think for us what's exciting to begin with is the uh traction and the early activity that we're seeing on the chain. Um I think it's great to see developer building that you see user engaging and you see the chain performing very well like what we were designing. So not only it's super fast but also the gas uh are also pretty low and so so far we are seeing a ton of uh excitement from the customer uh about just that and the fact that the chain is really working like we we attended. Um we just launched super recently so it's only two weeks ago that we announced uh some of these changes and we're seeing the TVL actually

increasing quite a bit. It's it's past 370 million. Um, a lot of that is stable coin because we are connecting directly the Robin Hood app uh to the chain for our earn product where you can get approximately 7% on your stable coin. Um, and I think that was kind of the the main EO moment that we are trying to push on when we announced all these new products in in London. Um that being said, I think you know we we build this chain in a permissionless way and the reason for that is that we wanted to create an open and accessible infrastructure so that anyone can build on top of it and obviously Mincoin is a bit easier to to build than some of the

larger product like RWAS and everything. Uh but I still see benefit from for the chain you know it's going to bring um user to the chain. It's going to bring liquidity. You have market maker engaging more and more with the chain because they're trying to make market on some of these coins and at some point we will be able to cross this customer and this market makers and everyone building on it to also start using more and more of our world asset uh products. So I think you know there there is an ecosystem basically that we are building and we are just at the beginning just a couple weeks in the launch and so far we're pretty excited to see where where things went.

Yeah, I mean it makes a lot of sense because obviously for the RWAS there's just so many more, you know, hurdles. Um, but out of curiosity, was that was it a surprise to you how things played out the first couple weeks? >> I I wouldn't say it was a surprise. I will say that, you know, we launched probably at one of the uh lowest moment in term of crypto market in the past couple of years or so. in so of course it was a bit hard to predict exactly how people re will react to to the launch.

Uh but actually we're really excited to see how people reacted to it from the London event where Vlad multiple of of my team and myself presented 12 and plus more products. We saw a lot of engagement during the event. We saw a lot of engagement on socials and obviously with the chain we are seeing a lot of traction. So, you know, I I think it just shows that crypto and blockchain technology is is something that is sometimes cyclical and that the the strategy that we've been using, which is to use a the more calm time to build and focus on just building uh is actually beneficial because when we launch new product, uh people are actually excited to to start using them and to start

engaging with them. >> Yeah. And something else that happened during the frenzy was that Pump Fund made Robin Hood token, Robin Hood chain tokens available to trade on Pump Fund. And that mashup between Pump Fund and Robin Hood chain just makes a lot of sense to me because I imagine both have user bases that maybe take like a more gamified approach to trading. But I was curious like was that also something out of the blue for you or did you know that they were going to do that? Um I I think for a lot of the partners that launch the after the the initial launch um it wasn't organized orchestrated with us but I think it was

part of our strategy. We we like I said earlier like we wanted to make the the chain permissionless. We invested a lot in documentation. We one of the reason we also wanted to have an L2 and one of the reason we picked arbitum as a platform for it was because people know it and there's a lot of values to to use arbitrum in term of language you can launch on and and everything. Um we did a lot of partnership with providers for example um alchemy chain link and others so that people could actually integrate very quickly with the chain. All of that was kind of the plan to make sure that anyone who wants to build on the chain can and that's really what we are trying to encourage. Obviously there are some that we are more excited to see when

they are launching than than other but you know uh in general our goal is to make sure that everyone can access this chain and everyone can interact with the RWA system that we created or some of the AI features that we enabled for the launch and also in the future all the interaction that we'll have with the Robin Hood kind of main application that we have u in the US. So, as we mentioned earlier, Robin Hood chain has to do a pretty careful roll out of certain features and products jurisdiction by jurisdiction. Those are the ones you know we talked about earlier, RWAS, but you know, per stock token products, all those kinds of things fit in that category. And so I wondered like now that we're seeing so

much memecoin activity on Robin Hood chain and again obviously it's so early but I just wondered like is that at all changing the types of questions you're getting from regulators? uh I don't think it changed the question so far at least I haven't heard about that uh when when I was in some of these meetings but I I think people overall are excited about the the launch you know for for a lot for a very long time you know people were talking about um tokenized assets and tokenized stocks and RWA as a way to talk about the future I think if you think about the past three or four years I heard the word token tokenization a billion time. Um, and it's really only last year when we

started to launch our stock token product that we saw people as starting to actually launch product using them. And um, I think everyone is starting to understand the benefits from RWA. So the aspect of being able to trade stock tokens 247, the fact that you can land on chain and actually get better return that if you're using traditional systems, all of that makes a lot of sense and get people excited. And I think on top of that, the the reason that Robin is successful is that we are not trying to just launch products that already exist somewhere else. If you think about our onchain lending, not only we we launch with an APY that was uh pretty high, approximately 7%, but we also launch with an insurance program

and we also launch with a way that the the rates stay stable um until different milestones are are hit. So I think the the the strength of Robin has been to understand what our customers really want and take the time to work with regulators and work with um our teams to really build a product that customer will be excited to to use. And because the chain has both the permissioned and the permissionless elements, I actually wondered um just how you think about like where Robin Hood's responsibility ends and then where the permissionless network begins.

>> Well, I think for us it's really on the um application side that we uh spend a lot of time on. Um you know, the network itself, the blockchain, like I said, is permissionless. Um but where we want to spend time on is how do we introduce the customers into the chain. Um so if you're using the the Robin wallet for example which is kind of the official wallet for the Robin chain. Um if we we are connected to multiple providers that are scanning the different tokens that are accessible to make sure that you know there's no security issues on the token or you know it's not a rock ball basically. Um, and if at some point we see this provider telling us like, hey,

this token is a is a problem, we will actually display a ban on the on the on the application and warn the user that this is probably something that they should not do. Um, so that's where we really spend time on. And obviously the wallet for example has a jurisdiction um system in it. So for example, if you're a US customer using our wallet, you cannot uh trade the the stock tokens. But if you're in one of of the jurisdiction that is allowed, you can actually use it. So, you know, that's where we we really spend a lot of time on. >> All right. So, in a moment, we're going to talk a little bit more about RWAS, per stable coins. But first, we're going to take a quick word from the sponsors who make the show possible. If you hold crypto on your phone, your biggest

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cape.co/chained and use code unchained for 33% off your first 6 months. Back to my conversation with Johan. So, Robin Hood has long been synonymous with stock trading. So, I'm sure you're not planning on giving up, you know, on the RWA activity on Robin Hood chain. Um, but I wondered like, you know, now that you're seeing how the chain is being used, has that changed your strategy for pushing more RWA activity? And if so, how?

>> Um, I I wouldn't say general strategy. I think for us, we are still really excited about the the opportunity in front of us. Uh I think the the stock tokens are overall a product that allows to do things that are not possible in the traditional system from 247 to instance element in the future lending um and being able to access any type of exchange across the world. So you know I I think the opportunity is still here and I think that's where we want to focus on for for the next uh few months in term of our road map for real world assets. Uh but I think it's also exciting to see that the tokenization engine that we build can work for any type of asset. Um right now it's US stocks and ETF but in the future you

could use it for any exchange across the globe for private equity for real estate and more. So um I think the world where you can trade anything through dexes 247 is is pretty close and so we are we are still focusing on that. And I was curious because the stock tokens have to be rolled out jurisdiction jurisdiction but the chain is permissionless. How do you actually enforce those rules on those types of products? >> Well, so there are different rules that are either embedded within the the contracts or there are some that are embedded on the wallet like I was explaining before. So I think it depends case by case on on which uh roles and my hope is also that at some point we can

reduce the amount of jurisdiction limitation. Um you know I think in the US for example we're waiting on this uh clarity act that we've been discussing. The SEC has also been vocal that they do believe that tokenization of securities will be helpful for the markets. I think in a lot of u region in the across the world they could actually benefit from tokenization because right now it's very hard to interact with some of these exchanges and so liquidity is therefore limited. Uh but in a world where you can access all these exchanges and all these assets across um all the countries you can actually uh largely increase liquidity and therefore largely increase the economic uh economical benefits for

for the local region. So I you know I think right now we are kind of at the beginning of the tokenization world. Um and I wouldn't be surprised in if in the future uh everything is tokenized and you can access any exchange 247 uh because the benefits um kind of outgrew the the old regulation that are in place. And just a quick question because you know we're seeing that yes tokenized stocks and ETFs are now available in 120 countries but not in the US or UK. When do you think it might uh come to those jurisdictions?

>> I think the US you know is is actively working on it between the clarity act between uh some of the sandbox initiative and and the crypto task force initiative uh that there is at the SEC. So uh I wouldn't be surprised if we start seeing some of these changes and uh we spend a lot of time with all these regulators. We are always happy to discuss happy to comment on some uh uh jurisdiction um initiatives and I think uh at at some point we will see that opening more and more. uh the the EU for example had a DTG program uh very early on like multiple years ago that they started obviously not permissionless and everything that the crypto community

would like but they they see the value and the benefit of the uh 247 aspect and instance element aspect so um I think it's a question of time uh that we will see more and more jurisdiction open to tokenized assets >> so one other part of the announcement was that Robin Hood ood now has per via a defy mullet partnership with lighter. Um however that was built with a separate instance um of lighter for Robin Hood chain. So it doesn't share liquidity with the main instance of lighter. And I wondered first of all why you chose to build a separate instance instead of tapping into the liquidity on the main app. But then um well actually let's start we'll start with that

question. I think for us the the value that we see is that a lot of these uh system that we're partnering with and a lot of these projects that we're really trying to uh connect to, we want to create a very unique experience for our customers. So um if you use our wallet uh the Robin wallet and you try to interact with the purpose products that we build uh through lighter, you will see that the experience is is very unique. You don't have a table where you have to enter numbers manually like you have on most of the other platform or competitors. Uh you have a very sleek easy to use UI where you can change your margin very easily. Um you can follow the contracts

and change and replace them uh as well very easily. So I think that type of unique interaction that we are focusing on requires some of the changes that we we ask uh some of our partners. So for example uh in that situation with layer but for us we think it's the most important part like we we've always believed that crypto was a better technology than most of the traditional systems um but that we were missing um a very good getaway to get into this world where you know right now you have to focus on uh creating wallet with private keys you have to bridge you have to transact it takes a lot of tabs and clicks and we're losing most of the customers because it's too complic

licated. So our goal is to make sure that we can make it easy to use, that it's a very simple and sleek interface and that we can give you all the education that you need to understand what's going on in the in the network. Um, and then I think it's only then that we will see massive adoption of blockchain and crypto in the world. And so that's really what we we want to focus on. And so sometimes we'll ask some of our partners to make some of the the changes that we're asking them to do. And one other thing because I would imagine that building something like that would also really fall in Robin Hood's wheelhouse. So I was curious why you went with an external partner as opposed to trying to uh you know build it on your own.

>> Uh I think that kind of depends on you know what aspect uh we're looking at. So for example if you think about our our crypto product that we have in the US that has millions of customers that are using it. We've been really focusing on the interface and how um showing how people can use it, bring more people into the that world basically. Uh but at the end of the day, we routes orders to multiple market makers and and exchanges. Um and so here it's it's a bit the same concept for the Robin wallet. What we feel like the Robin H platform was really good at was to create this interface that was simple and easy to use and we were less uh feeling the necessity to also own the

back end of the exchange where people were transacting. Um and so you know that's really where we focus on we we love to build product. We love to build systems but we want to make sure that when we do that we have something unique to bring uh on the table. And I think that's where we think we can really change how people are interacting with burps in general. And I think Burps is something that is really exciting in general. Like it's a it's a primitive that was kind of created by the the crypto world, right? It didn't exist really before. And now we're starting to see it more and more integrated into traditional exchanges and centralized exchanges. So it is something that I think is is unique and requires a lot of education to our customers so that they understand the difference between a per

and an options for example. Um and so that's what we want to focus on. Something else I've noticed is you made USDG the backbone of the chain for margin lending liquidity and that's instead of USDC or tether which obviously have much deeper liquidity and I wondered why you chose to build the plumbing of Robin Hood chain on this newer smaller stable coin and I also wondered you know when you when you made that choice like does that potentially create a single point of failure?

Well, so we do plan to support multiple asset uh including USDC and other on the on the chain. Uh I I think for the the question of point of failure is something that we always care about. So most of our system are built with redundancies. Um and sometimes when the redundancy doesn't exist on day one, it will be uh a bit after. But it's something that we we care about for for USDG in particular. We do think it's an interesting stable. We worked on it uh since last year and we made the announcement that we are joining the group the consortium that uh the global network created. I think for us what we like about USDG is this idea that they

are sharing the economics with the the participants and therefore it allows us to bring more value to the customer. Um, I think some of the issues we're are seeing with the other two that you mentioned is the way that they're sharing the economics doesn't necessarily align with with the network and benefit just the issuer. And so I think that's where we we really want to focus on. So anyone that is kind of building on the chain uh using USDG can benefit from it instead of uh just having the the main issuer benefiting from it.

>> Okay. Um, but I guess so that leads me to then wonder because since Robin Hood is a founding member of the global dollar network and I think the the founders of that do share the yield reserve the reserve yield. Um, so how much of the push for USDG comes from Robin Hood being able to capture that float? like I I don't know you know really what what percentage you you even can because of the number of partners with that but yeah I was curious how much of a factor that was well so it's not just the founders um anyone who's participant um in the network can benefit from getting the the name on the the assets um and I think

the push wasn't necessarily the main like the fact that we're founder was not necessarily the main reason we decided to to join the the network. I do think we want to see a world where the stable coins me and uh yield from the stable coins are shared with all the participants not just the founders to be clear like anyone that is part of the network. Um and I think it's just a better system that we can build on and and create more interesting products from that. >> Okay. So, um I did also want to ask because obviously, you know, when Robin Hood's earnings come out, um and it's like this for any company, I think that's in a similar position. Crypto was usually the most volatile line. Um

crypto, you know, was about $358 million of the transaction revenue at the peak uh in Q4 2024. Um in Q1 of this year was at about 134 million. So, it's a drop of roughly like 63%. And I wondered like now with the introduction of Robin Hood chain, is that an attempt to make this, you know, volatile crypto trading revenue something more stable or could it potentially also just, you know, push the um push more crypto beta to your earnings?

>> Uh I don't think we really build any of our products thinking about uh the the earning especially in ahead. But uh I think the the strength of Robin Hood is that he has more than uh one business line that is actually generating revenue. So in fact we have about 11 different business line that are making nine figures or more in in revenue. And so the beauty of this uh company is that basically if one of the business line um goes down on the revenue side usually you have other business uh lines that are able to kind of balance uh the fact.

So that works very well with the market for example when the the crate rates change. It also works with uh psych cycles like this where we see a bit of a pivot from the volume uh coming out of crypto and going into equities especially all the the cheap equities and everything like that that we've seen in Q1 and Q2. Um and you know let's say that the cycle uh turn around in in crypto again we will probably see another obvious shift happening where uh the crypto business line will do a bit more and some of the other business line will do a bit less. But I think for us the main focus has been to make sure that Robinood is heavily diversified. I think we've done very well with that. Um and you know we keep growing new

business lines. So for example we recently launched our banking uh business line and uh we had the credit card that we launched a few years ago. So you know that's kind of the strategy less about we wanted to launch the chain for uh changing the revenue. I think for us launching the chain was really about how do we create this infrastructure that we can use to offer better product using blockchain technology. Um the first product that we launched was earn which was really this idea of how do we launch a better landing product where people can still get the higher rates that you can get on DeFi but also at the same time get a bit more security and an easier access than if you were using the

the previous D5 protocol. So um we think that chain will be used for all of this new kind of system that we're trying to build. Tokenized stocks uh being another one that we obviously spend a lot of time on. We already talked about that. Uh but we really see that as a foundation layer basically that we can start building on top of it. >> Okay. Um well, last question before we head out is you've just had this fabulous launch and now you have two weeks worth of you know sort of um history to see how things have played out and at the same time we're in this just enormous sort of like adoption race you know more broadly in crypto. So what's your focus now and what's ahead

for Robin Hood chain? >> Uh I think more of the same. So making sure that you know RWAS uh per memes as well to be clear um and all the products that we are building on top of the chain gets the right product launch and the right traction. Um there's a lot more that we want to do. We talked about it at the at the event. Uh you know I think for us this is really just the beginning and it's time to to build on top of it. So um I know people are really excited by the metrics and obviously uh there's a lot of uh discussion that we can have on specific part of of those metrics but we think if this is really just the beginning this is just two weeks in and there's a lot more that we are planning on building on

top of it and also we really hope that the committee will build on top of it and so we we're also trying to engage and spend time with all the developers that want to build on chain um you know you uh you mentioned that at the beginning but Vlad Our CEO also uh did a open invitation that if anyone wants to do on the chain they should reach out and we are spending a lot of time looking at our Twitters and X accounts to make sure that we see what people are excited about and making sure that we can give access to that. >> All right. Well, thank you so much Johan for sharing your thoughts and coming on Unchained.

>> Thank you. See you soon. >> Nothing you hear on Unchained is investment advice. This show is forformational and entertainment purposes only. And my guest and I may hold assets discussed on the show. For more disclosures, visit unchained crypto.com. lip pop

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