Robinhood is diving deeper into the crypto world, announcing Tuesday that the company is building a standalone, non-custodial wallet that will give customers full control over their crypto holdings.
The company is currently rolling out wallets to millions of users, but those wallets — so-called custodial wallets — are managed in the background by Robinhood. In contrast, the new products will be similar to web3-centric products such as MetaMask and Coinbase Wallet, which give users full control but also require them to manage their own private keys.
According to the company, the upcoming wallet will let users “trade and exchange cryptocurrencies without network fees,” access DeFi services and store NFTs.
Robinhood’s cryptocurrency CTO, Johann Kerbrat, told Decrypt in an interview that the new wallet will seek to replicate the company’s well-known free model.
“We’ve talked to a lot of people who say, ‘You start with a certain amount of money, and once you get the NFT or asset you want, you get 50% less money because of transaction fees,’” Kerbrat said. Explain that Robinhood wants to reinvent the wallet experience.
It's unclear how Robinhood will accomplish this, especially in the case of the ethereum blockchain, where users often have to pay substantial fees -- sometimes more than $100 during times of high congestion -- to ensure their transactions are processed.
According to Kerbrat, part of Robinhood's solution will involve "working with liquidity partners to get the best rates," without elaborating further.
In response to a question about whether Robinhood's free plan relies on Ethereum's imminent move to a proof-of-stake network (where fees will be much lower), a spokesperson replied: "There are multiple solutions to achieve this vision, and we're excited about it. Excited to show everyone how we're going to do it."
As for the wallet itself, Kerbrat's design and slick interface -- Robinhood's traditional strengths -- will be the company's main focus in developing the new wallet. He added that Robinhood is working to ensure “guardrails” for new users who are more likely to lose their funds due to unfamiliarity with storing private keys and other elements used by Web3.
Such design features may help Robinhood stand out from products like MetaMask, which is widely used but whose interface is considered clunky by many.
Robinhood said it plans to launch a beta version of the wallet in the summer, with the goal of being widely available by the end of the year.
However, the company whose core product is a stock is late to the cryptocurrency game and may struggle to compete long-term with established players such as Coinbase. That's especially true given Robinhood's poor financial performance over the last year and the recent layoff of 9% of its workforce -- a situation that coincides with a decline in the meme stock trading frenzy led by GameStop that has provided Robinhood with a lot of money. Big power through most of the pandemic.
At the same time, the company has also been losing key employees, including multiple members of its communications team and its former cryptocurrency chief Christine Brown.
However, there is one wild card that could determine Robinhood's future. That said, billionaire and crypto personality Sam Bankman-Fried (SBF) recently held an 8% stake in the company. If SBF decides to pursue a full buyout, or leverage its existing stake to leverage, Robinhood's outlook could change significantly.
At the same time, Kerbrat said the company is moving full steam ahead with its vision of a cryptocurrency-based future. "A lot of people aren't using Web3 because of the cost," he said. (But) Web3 is here to stay, and we're here for the long term. It's a bet on the future. "
Original: https://decrypt.co/100615/robinhood-non-custodial-wallet-ethereum-defi-nfts-gas