Robinhood 将全球金融带上链的计划 | Johann Kerbrat

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All right, everyone. Welcome back to Empire. Very excited about this one. We've got the head of crypto at Robinhood, Johann. Johann, how are you doing, man?

Good. How are you?

Very good. Long time no see. You've been busy.

Yeah, it's been fun.

I remember our last chat at DAS. You were like, “There's a lot of stuff coming. I can't fully tell you everything. There's a lot coming.”

I didn't lie. There was a lot of stuff.

No, you did not. I've never known you to lie, man. Tell me about the evolution. I remember Vlad—I don't know if you were at Robinhood then, but I would guess you were—gave a keynote at Permissionless, one of our conferences, in 2022. I think it was in Palm Beach.

Yeah, yeah.

1. Robinhood’s Onchain Vision

He kind of announced that you were launching this crypto wallet. For me, and I mean, it was also our conference, so I'm biased, but I think of that as the moment Robinhood started really pushing. Can you start macro with this and then go micro? Tell me about the evolution. Was there always this grand vision? Was it more like, “Let's do a V1, then a V2, then a V3”? Tell me about the evolution of crypto internally at Robinhood.

2. Robinhood’s Crypto Growth Strategy

Yeah, I think the vision was always there. Initially, we started with the idea that customers should be able to access any type of financial instrument that they are excited about. Crypto was one of them. Back in 2018, that's when we launched Bitcoin trading and Ethereum trading.

But then we felt that blockchain and crypto technology were able to power a lot more than just trading assets. We thought it would be a great way for us to expand internationally, not just in the U.S., through crypto technology, because it's a lot easier to build. You can get access to hundreds of millions of people with just a wallet that people can manage themselves.

That's where the vision started. We launched the wallet a few years ago, like you mentioned. It was purely a wallet, and now we're starting to add what the real vision is: tokenized assets, being able to get yield on your assets, and doing more and more with your crypto. The wallet is now live in more than 120 countries. We've tokenized assets on it with our stock-token product, and I think it's been a great way for us to really expand where Robinhood is.

Yeah. I feel like you've been doing crypto stuff since 2018, when you launched Bitcoin, you know, the spot tokens, but in 2023 you launched the wallet. I feel like the Robinhood Chain is you guys basically telling the industry, “We are here. We are a very real player in this game.”

I think we were always a real player. We are one of the largest U.S. retail platforms. But the chain for us was not just a side project. What a lot of competitors have done is create a chain just for the sake of it. What we wanted to create was this infrastructure and backbone where we can build new products and bring the benefits of blockchain technology to our classic retail customers.

That's what we really wanted to do with this chain. It's integrated within our main app. You can have the Earn product, which I'm sure we'll discuss, directly on it. It's using the chain to give the benefit to the customer, even though they're not necessarily DeFi or crypto people, because I think the 2 worlds are converging more and more.

We need to stop asking this question of DeFi versus TradFi. We just need to bring everything to the customer and make sure they get the benefit of it.

Yeah, 100%. What is the actual benefit of doing all this stuff on-chain?

I think there's a lot of accessibility. Being on-chain gives us the possibility for everyone to build on top of our chain. It's permissionless. We can connect to many more partners, liquidity providers, market makers, and DEXs because it's all available to us. We don't need to create a separate FIX line with every single market maker or every single partner on the chain. I think that's the beauty of it.

The second benefit is what I was saying around the wallet. It's available in more than 120 countries, and all these people can now have access to our UX and UI while still getting good pricing because it's using the chain and is deeply integrated with Robinhood.

On the lending products, you get the best of DeFi with a high yield, but you also get the simplicity of Robinhood—the UX, UI, and everything that we build around it. I think that's just an evolution of the technology that we've been using for TradFi. You don't restart your exchange anymore, and you don't stop working on weekends. Everything is live and on the blockchain.

3. Will Robinhood Move Fully Onchain?

Yeah. Internally, I would guess—so, we just acquired Masari, and now we have 2 systems. We have 2 CRMs, 2 databases. I'm going through and connecting these, integrating these 2 things. I would guess that internally at Robinhood, there are all these benefits to doing things on-chain, but you have 2 different systems, right?

You have an off-chain order book and an on-chain order book. You have a wallet here, and you have self-custodial and non-custodial wallets. How does that work internally? Also, how do you think about that on a 5- or 10-year time horizon? Is there a world where all of Robinhood moves on-chain, or is there just no need for that?

I see the convergence happening more and more. For trading equities, for example, right now we're still using very specific American exchanges, but you could see a world where you can connect to any exchange in the world using tokenized assets.

The way that you can use your portfolio as collateral right now is mostly through margin and things like that. For a lot of countries, you can't easily do this, but when it comes to stocks, it's actually a lot easier. I think the 2 worlds will converge.

I don't know if the entirety of Robinhood will be on-chain. I think that's maybe a bit further than 5 years. But you see the benefit of the chain, and I think the more we can bring this benefit to the customer, the more it will be a no-brainer for them to use the on-chain version of the product versus the off-chain version, where they probably get less benefit.

Interesting. So, you basically want to build some sort of back-end system where you can plug in all the liquidity venues that you want to. It could be a DEX, it could be a CEX, it could be the New York Stock Exchange, it could be Nasdaq, right?

Yeah, and that's usually what we've been trying to do as much as possible: offer the best price to our customers. For example, even on our centralized platform, if you place a Bitcoin order, we'll look at the pricing from different exchanges and different market makers, and we'll only route to the best one.

I think that's what we want to do for everything. If you want to lend your money, we'll look at multiple options and make sure that we'll give you the best one. The one we've built on-chain, we feel, is pretty good. But if tomorrow there's an off-chain option that's even better, we'll absolutely look at it.

When you think about the cost savings you have with a chain, where everything can be automated through smart contracts and verified through actual code, you don't have middle players in between who are all taking a cut of the fees or whatever revenue. I think blockchain will bring so many improvements to a lot of pricing and a lot of projects that we try to do ourselves, basically.

Yeah. I'm biased. I tend to agree. How does crypto work internally at Robinhood? I've seen 2 different models, which are linear versus horizontal. Do you have your own crypto P&L?

Yeah, we have a business line. Robinhood is pretty amazing in the sense that we have 11 different business lines making at least 9 figures in revenue. That really diversifies the overall group.

When crypto is a bit down, like this year, or sentiment is a bit lower, you can see other business lines, like prediction markets, actually going up.

You have 11 business lines doing $100 million or more a year?

Yeah, which is a great feat for a company like Robinhood. We were able to diversify quite a bit. I think that's really advantageous because the market is changing. During COVID, there was a lot of pressure on Robinhood: Would people still trade? Then people were trading, and then rates increased, so people were saying, “People aren't going to trade as much.”

But all of this really diversified the overall business, and I think it makes the company solid. Crypto is just 1 business line.

We have an all-in P&L. Basically, we have employees working in engineering and product, and we also account for the costs that we have to incur to run the business.

What are the revenue sub-items on your P&L? Is it trading fees, blockchain fees?

Yeah, basically these kinds of things. We also acquired Bitstamp last year—an exchange, so an institutional business. We have staking and lending, so there are different types of revenue there as well. Trading fees are definitely still the largest portion of our revenue.

Okay, so Robinhood itself has these 11 business lines doing over $100 million a year. If you fast-forward a couple of years, what is the crypto P&L? Could you have a couple of those doing $100 million? Could you have staking at $50 million a year and lending at $100 million a year? What do you think that looks like?

To be honest, I couldn't tell you right now because we haven't done this type of projection at the sub-item level. Our goal is also to make sure that crypto can be a diversified business and not just based on the volatility of trading.

I think that's what we've been seeing lately with institutions. We have a lot of institutions that are using our platform a bit as a white-label platform to offer crypto to their customers, or using it to on-ramp and off-ramp between stablecoins so they can send them more easily between their entities. I think we'll see more and more of this diversification happening in our business.

So you guys have a crypto-as-a-service business as well. Nice.

It's been available for a while. We have some banks in Europe using it, for example, BBVA. It's been pretty interesting to see because a lot of these institutions want to get into the space, but they also don't want to build everything from scratch. We're able to give them a turnkey solution, and they can build on top of that.

Interesting. How big is the team? How big is the crypto team?

I don't even know if we have an exact number, but it's pretty large now.

I guess if it's that large, did you acquire the Canadian company WonderFi?

Robinhood Canada has been live since July 1 as well.

4. Inside Robinhood Chain’s Explosive Launch

Nice. It's been a nice exchange. Do you want to talk about the chain?

Yeah, absolutely.

Tell me about the chain.

It launched on July 1 as well, so we're 3 weeks in. The market cap is about $750 million, and we have about $500 million in TVL as well. We've passed 105 million transactions.

I think what that shows you is that in 3 weeks, we've seen a lot of excitement and engagement with the chain. The main reason was that we wanted to have an ecosystem ready to use as soon as we launched. Not only were you able to connect to our RPCs easily because we've done a few partnerships, but we also launched at the same time as our lending product to bring some of the stablecoin TVL into the space.

We did some partnerships with Slider as a perp stack and Arcus on the spot side. We're really seeing a lot of excitement around meme coins lately and some of our RWA projects, like Stock Token, where we have about $19 million in TVL.

I'm looking at a chart right now. You guys overtook Base. Is that right for daily active users?

It kind of depends, but we're one of the top chains in terms of daily active users. In terms of developers as well, we're pretty high. I think the data always depends on how you slice it, so we're trying to be careful there.

Yeah, I know. We know the game of on-chain data.

We're definitely seeing good traction right now.

What design decisions did you guys make when you were building the chain? There are so many design decisions that go into building a chain. How much do you embed natively into the chain? How much do you work with external partners? How much do you build internally?

Even the yield that you give on lending and borrowing is a decision. Is it fixed? Is it variable? Those are all these micro-decisions. Can you tell me about some of the big decisions you guys made?

The biggest one, I think, was deciding how we were building it. There was a lot of discussion about whether we should buy a chain, build an L1, or build an L2 or L3. What we felt was that we wanted to build on top of Ethereum. We wanted the decentralization and security of the L1.

Why did you want to build on top of Ethereum?

Liquidity, decentralization, and security. I think that was pretty important for us. We also wanted to be able to make our own design decisions on block time, gas fees, and these kinds of things.

When we decided to build using the Arbitrum stack, we were able to get all of those benefits and, at the same time, make some of our own decisions. For example, when we saw that there was a lot of excitement around the chain, we made sure that we could reduce the gas fees so people could still trade. That's not something we could have done if we weren't owning the chain and the decisions around it.

The second part is that we like the technology from Arbitrum. For example, you have Stylus, where you can build in any type of language around it. You also have a way to create priority orders that are a bit different from the predatory mode, in my opinion, in some situations. All of these things were important.

At the end of the day, it's what I was telling you about earlier: this deep integration within the main app is what I think gets people excited.

Yeah.

5. Building The Chain For Adoption

They realize that the product we launched is just the first one and that we'll have more and more integration. I think that's a big game changer for us.

Did you ever think about buying a chain?

We always look at acquisitions. I think it's always a question of what acceleration you're getting from the acquisition versus just partnering or doing something else.

For us, we felt pretty good about this solution, where we were able to start from scratch and not necessarily have baggage or history from the chain. We could also build what we really cared about. For us, we're really focused on developers, so we wanted to have an ecosystem ready to go.

We also wanted to have fast block times because I think that's the main issue we sometimes see on-chain. All of this was useful to do from the beginning.

Yeah. Going back to the P&L, is the chain a P&L item? Will the chain make money and spit off fees, or do you almost want to drive the fees to zero to enable all this trading, lending and borrowing, and perps?

6. Ads (peaq)

It's a balance. Right now, it's definitely looking like it will generate revenue, but we also want to find a way to make sure that people are excited about using it. The last thing I would like to do is optimize for revenue on the chain, but then have people not want to use it as a trading platform or develop on it.

You have to find a balance. You also don't want to make it completely free because then you get spam all over the place with fake activity, which is not good for either the customer or the chain. Now you have to develop more systems to support the load.

It's a balance, but I think for us, we see it more as a back-end solution to build on top of, not purely as something we want to optimize revenue for.

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7. Building Robinhood’s DeFi Stack

How did you go about selecting the partners? How did you even philosophically think about this? Why didn't you just build lending and borrowing internally? Why work with Morpho? How did you go about this whole thing?

A lot of it was about how we announced the chain. We actually announced it last year, during our first event in the summer.

That was the EthCC one.

Yeah, I'm glad. It was pretty cool. At the time, a lot of people were asking, “Why did you just announce a chain?” The goal for us was really to say, “Robinhood is coming into the space. If you want to build with us, we're here.”

Then, during DAS, we announced the testnet a couple of weeks before that. The goal was also to say, “Here's the technology. Start building with us.” A lot of people reached out, saying, “I'm building XYZ. I want to see if Robinhood is interested.”

We focused a lot on developer tools. We partnered with people like Alchemy and Previ, along with many others, to make sure that we had the right infrastructure in place. We also partnered with DEXes and other platforms to make sure that we had the trading side in place.

For lending, Morpho was one of the options we looked at, but honestly, we're very happy with the team.

The way they were thinking about building the product really matched how we wanted to build products. We wanted to do something different from the competition. You mentioned it: I think when we launch, we are basically giving a return of approximately 7%. That rate is going to be stable for a while until it changes based on activity, but we didn't want to launch something on day 1 and, a few hours later, have it completely change.

The other thing we wanted to do was get insurance to make sure that if there's an issue with the smart contract or something like that, some of the losses will be covered. We partnered with Lloyd's of London, which was also interesting because we created probably one of the largest insurance program for crypto with them. That required deep discussions with all of these partners that we brought into the program. Having strong partnerships really allows you to build a unique user experience, in my opinion. That's what we really like to do.

Because then you can go with Morpho to Lloyd's.

Yes, but Lloyd's is contracted with Robinhood. Having all the details from Morpho was helpful for us to get insurance and everything like that.

Is the dream to pick 1 or 2 partners in each category? With the DEXs, you've got—I'm forgetting the name—I mean, Uniswap, and then there's not dYdX anymore. I forget the name. Arculus? Do you want 1 or 2 in each category? Or is it, "Hey, eventually we want to work with Aave, Spark, Camino, and Sky"? Or is it, "Look, we're just deep with Morpho, they're great, and they're our design partner"?

I think it really depends on what we want to build. There are products where we think having just 1 partner is better. There are products where we think projects will—we don't necessarily know where everyone is going. New ideas are being developed on a constant basis, and I wish I had a crystal ball, but sometimes I don't. That's why we want the chain to be permissionless. Anyone can develop on it.

There are some projects that are really cool. In the morning, sometimes I look at my Twitter account or my X account and see all the things that are being launched, and it's really exciting to see. But for all of us, when we want to do the deep integration that we have, it's most likely with 1 or just a few partners because, honestly, we don't have the bandwidth to build an unlimited number of projects.

You've seen it, for example, on our wallet. We created a perps experience. It's pretty well designed, and I think it's a lot simpler than what's available on the market. We did this partnership with Lido to really create this unique experience where you can use your stock token as collateral, or you can see the perps directly in your wallet. Those types of deep integrations do require a contractual partnership, so usually we don't have as many as we would like.

8. Why DeFi Partners Stay Independent

Yeah, yeah. Could you ever see bringing some of these teams in-house?

I don't think that's necessarily the goal for us. Being part of Robinhood will also mean that they have specific requirements and a specific set of rules to follow. A lot of those startups are able to move very quickly because they're still at the startup stage.

So it's nicer that they're outside of Robinhood?

In a way, right? Otherwise, we'd have to look at them on a custom basis. I think the startup stage is still the most exciting part of creating companies. They can experiment, try things, and iterate until they find product-market fit.

Once you're part of a larger company, it's a bit different, and you have to align with the vision of the product.

Yeah. How did you think about—I'm trying to think of the right way to ask this question—you guys are in a very privileged position and a place of extreme leverage, I would say. Nearly all crypto companies would love to be integrated into Robinhood, and for many that you integrated with, it's probably a make-or-break moment for that company.

I'm sure when they have their board meeting, or when they're fundraising, they're saying, "We got integrated into Robinhood." How did you think about using this leverage? How much did you want to flex this leverage?

I think it really depends on what we're trying to do. There are products where we want to use this leverage to bring something unique to our customers. That can be a higher return, a lower fee, or something like that. But for us, the main vision has always been: How do we expand the number of customers who want to interact with blockchain and crypto, and how do we bring these customers a better product than what they're currently able to get?

That's where we'll have some of these partnership discussions. If I'm being honest, the most useful part of being at Robinhood is that I can reach out to almost anyone, and they usually pick up the phone.

Mhm.

Whereas when I worked at a startup before, if you try to cold-email or cold-call somebody, it takes a bit longer, and usually you have to—

Yeah.

—ask a favor of somebody to get introduced. That's really the biggest advantage that we have. If I post on Twitter or X tomorrow that I want to build XYZ, I'll get a response from someone interested in working with us pretty quickly. I think that's awesome.

You also get Robinhood with 27 million funded accounts. It's a pretty unique distribution lever. Obviously, what we want to bring in front of our customers is something that's safe to use but also gives them benefits.

Yeah. How did you think about structuring this from a financial perspective? I'm sure you can't go into all the details here, but let's use Morpho as an example. Can you just get a bunch of Morpho tokens? Do they pay you? Do you pay them? Is it all just revenue share? How do you structure these financially?

We don't have revenue share with Morpho. The main question for us was really how we build this product in a different way. As I mentioned, the fact that the rate isn't fluctuating constantly and that we're able to connect the pool directly into our main app—those kinds of things.

Sometimes we do have revenue share. Lighter, for example—the CEO of Lighter, Vlad, mentioned our revenue share. It's public. It's in the contract. But for us, we're at this stage of the game where it's less about optimizing for revenue and more about optimizing for adoption, I would tell you.

Yeah. Interesting. Did any teams get close to going live with Robinhood and then have something fall apart at the last minute?

I don't think so. Usually, we spend a lot of time selecting the partner, creating contracts, and doing all these things. Not in my group, at least. There are times when negotiations are difficult because we're a public company, so we have a lot of requirements and things that not everyone necessarily wants to deal with. But I don't remember anything where we were about to go live and killed it at the last minute.

Did you think about doing anything with Hyperliquid or Hyperliquid builder codes?

We've discussed it a few times. For us, we really wanted to build a platform that was very unique to Robinhood. On perps, we're just at the beginning. It's a new primitive, right? It just launched a few years ago, and we're seeing more and more enthusiasm around it.

There are a lot of questions about regulation in the U.S., for example. In the EU, we're offering perps through our centralized platform, using Bitstamp as an exchange for the actual contracts. So, there are a lot of questions around that.

On the DeFi side, having this strong relationship with Lido, which we invested in last year, plus some of the other protocols that we mentioned, like Orcas, created a good structure for us to build what our customers are asking for.

Mhm.

Sometimes, when you partner with a larger group or platform, it gets a bit more difficult to optimize for our customers. I think that was the decision process.

9. Tokenized Equities Go Global

Yeah, yeah. How much of the benefit of moving things on-chain is related to global access, would you say?

For me, that's a big part. Global access is key. We still have a lot of liquidity that could come into our American companies and American exchanges but can't because accessing these assets is difficult or costs a lot in fees and commissions.

If you look at Europe, you still have a lot of platforms that are pretty big and are charging at least €1 in commission. I think we want to solve this accessibility problem, and the global aspect through the wallet is pretty unique. In a lot of places, you can't walk to your broker or your bank, but in most places you can have a phone and an internet connection. That really changes the way that you can own assets.

Yeah. Tokenized equities: underhyped or overhyped?

Yeah. I think so. I think we're at the beginning. Obviously, if you're American and you can have access to a platform like Robinhood, it's probably not the most exciting for you to have tokenized US assets. But I think in a lot of places, it's hard to get to them, and these assets are going to give people exposure to US stocks and ETFs in a much easier and cheaper way.

I think for us in the US, you will start seeing these benefits when it comes to other types of tokenized items, like real estate, art, private equity, and stocks from other exchanges. If I ask you tomorrow to buy a stock on an Indonesian exchange, I'm pretty sure that you can't do it right away with your accounts. You will have to use multiple brokers. I think that's what we are going to fix very quickly.

How much of that is regulatory arbitrage versus the technology allowing it?

I think the reason why tokenized assets are not as widely spread right now is regulation. We're still waiting on regulation in the US. Regulatory clarity is still in progress. In some places there is clarity, but not necessarily everywhere. If tomorrow we had a clear rulebook across the world, you could actually see the adoption of tokenized assets.

So, now on Robinhood, you have tokenized SpaceX and normal SpaceX, right? Do you eventually, from a user perspective—maybe we're fine with that. Maybe there are users who love to do things on-chain and users who love to do things off-chain. The other product pushback may be, “Let's combine this and make it just one asset, and the user doesn't need to know if it's on-chain or off-chain.” What's the product decision there?

Yeah, I think right now it's mostly separated because the tokenized version is going to be in a wallet for the Robinhood Chain, and the non-tokenized version will be on our main platform. But you could see a world, with proper regulation and structure, where most customers won't care if it's on-chain or off-chain. They just want to be able to trade 24/7. They want to be able to send it somewhere else if they want to, use it as collateral on the platform, or take a loan against it.

We should make sure that the UI and UX do that for them, but we want to abstract away all the complexity of private keys, wallets, and all these things for the customer. That's what we've done for the other product. When you use Robinhood Earn on the platform, you won't have to create your own wallet. You won't have to interact with DeFi at all. Everything is done for you, and I think that's what matters. If you want adoption, we need to make it easy to access.

Yeah. Where do you think it makes sense to subsidize things across the platform? For example, Robinhood Earn is one of the best Earn programs on the market today. The real rate of lending today is around 3% or 4%. I think you guys have it fixed at 7%, or it's roughly 7%.

It's roughly 7% now.

Roughly 7%. So, there's some subsidy, right? How do you think about that one specifically? Maybe we can go into Earn specifically because I'd love to hear about it, but also where else do you subsidize, and where does it make sense?

We don't subsidize, so probably not the best topic for me. But on some programs that we launched—for example, in Robinhood Canada, which we just launched—we are not charging any fee for the next 90 days or so. It's not necessarily subsidizing, but we're operating without necessarily making revenue from trading. It's customer acquisition.

Instead of spending money on marketing, Robinhood hasn't bought a stadium and put its name on it yet.

Yet? Yet? [laughter]

Well, you never know, right? But we've never done that, right? So, instead of spending hundreds of millions on something like this, we're now spending it to give back to customers instead of charging them fees, for example, in Canada. Right now, they can trade crypto without any fee. I think that's the mental process there.

But everything that we do, obviously, has math behind it. We make sure that we see a moment where it's going to be positive for both the company and the customer.

Yeah. What's the story to Wall Street around Robinhood's crypto strategy? Is it just a new product line? We had 10 that did $100 million, and now we have 11, and then we'll have 12 and 13. Is it more of a tech play, like efficiency internally? Is it, “Hey, there's this new bucket of users that we can go after that we don't attack today”?

Yeah, it's a combination of the 3. Definitely, global access is important for us. Building Robinhood the way we built it in the US in every single country in the world will take a long time, so we think DeFi and the on-chain version of Robinhood can actually get us there much faster.

But we also see it as a revenue stream, and we see it as a way to attract customers who are excited by DeFi. What we've seen on-chain over the past 24 hours on DEXs—I think there was half a billion in volume—those customers are mostly pure DeFi customers who came from different chains and pushed to the Robinhood Chain. Until now, we were not touching them, so I think it's a good thing for us.

Yeah, I think a lot of the—so, looking at the metrics now: total 24-hour DEX volume over $560 million, DeFi TVL over $300 million, protocol TVL at $540 million, over 100 million total transactions, and almost 2 million total addresses. For people, I mean, those are pretty shockingly large numbers, I'd say.

There can be a lot of mercenary capital in crypto, where money floods to the new thing in hopes of a token or some sort of reward. I think there are 2 elements here for you guys. There's the teams building on top of you, who are the new teams. Maybe people are hopeful they'll give a reward. There's also this idea that maybe Robinhood Chain launches a token one day, so I don't know if you have any commentary on that.

When teams build on it, some of them are going to do tokens, I'm sure. That was the reason we wanted to create a permissionless chain. I don't really want to get to every single project and tell them what to do or what not to do. They should decide for their own strategy.

10. Competition And Financial Convergence

On our side, right now, we don't have any plan for a token. We launched with ETH as the gas token for the chain, so we're contributing to the ecosystem as well. I think we're more interested in this type of deep integration than necessarily just launching a token for the sake of launching one. If tomorrow there's a real reason to have a specific token that will give benefits to customers, that's something we could look into.

Yeah. When you think about your competitors, who are your competitors?

On-chain?

I mean, I'm assuming as a company, for many years it was the brokerages, right? Robinhood's going after E*TRADE and Charles Schwab, and I think in many ways you guys have overtaken them—at least for my generation, you've overtaken them.

When we have other crypto apps on the show, there have been many folks on Empire recently who have said, “Robinhood is our competition,” right? We look at Robinhood as the competition. So, I'm curious who you look at.

It's always a hard question. Obviously, we look at everybody that's in the space. We look at market share. We want to understand if we have product-market fit, right? The best way to determine product-market fit is to talk to your customers and understand if they use you or if they use somebody else. If they use somebody else, it's probably because your product is not good.

We try to look as much as possible to understand if we gain market share or if we keep our market share. I think at this point in the crypto space, we're still way too small to just focus on that. Let's focus on increasing the pie and making sure that we have more and more customers across the world interacting with crypto.

In the future, when everyone has a wallet and everyone is trading on-chain, that's when we can really focus on the competition. But when I look at our different competitors in the pure crypto space, I still think we're just at the beginning. The number of people who own tokenized assets, for example, is still a fraction of the number of people holding actual equity. I think we have a longer journey ahead.

Yeah, yeah, yeah. We were on the Roundup the other week talking about the updates at Coinbase and Base. Kobe stepped in, and there were a bunch of updates. I'm sure you've seen them. I'm curious if you have any thoughts on what Base has gotten right and what Base has gotten wrong.

Well, I think there was a lot of discussion around the social experiment that they've tried, and honestly, I don't know exactly what went wrong or why it didn't work out. But I think it's interesting that companies the size of Coinbase are trying new things like social on-chain.

I think, like I said, we're at the very beginning. There's still a lot to do. And I think, overall, I have a ton of respect for both Jesse, Kobe, and Brian. So, the structure—whatever they want to organize the company around—makes total sense if it makes sense for them. I'm just excited to see that Coinbase is also pushing on-chain products that are similar to ours because, again, a tokenized asset will only work if we have more and more people starting to use it and interact with it.

Yeah. What do you think happens with tokens? Maybe the context here is that you mentioned at the very top of this that there's this big convergence happening. It used to be DeFi over here and TradFi over here, and there's this big convergence. If you look at tokens, especially if we get clarity, the conversation is a return to fundamentals and revenue and real metrics. If you look at equities, they're starting to trade globally, permissionlessly, through 24/7, 365. So, tokens are becoming a little more like equities. You have equities becoming a little more like tokens. Are these just going to be the same vehicle over time, or will they always be separate?

Yeah, probably. I think a great way to raise money for a lot of companies has been to create a token and then use that as a way to create a community, give updates and news to the community, and then build an entire company around it. We've seen it with a platform like Ethereum and others. This was a different way to create a company, but such a powerful way as well. So, I think you'll see tokens being an easier way, and you'll also see companies maybe not going public on traditional exchanges, but actually deciding to use crypto tokens to continue to raise money or go public through a token. I think those 2 worlds are going to converge for sure.

Yeah, 100%. What are the metrics you look at? I mean, obviously, revenue. You have a P&L, and it's revenue and cost, but do you care about daily active users? Is it daily active builders and developers? Is it TVL?

All of the above. Yeah, I think daily active users are very important for us. We don't want to create a chain just for bots or just for a few advanced traders. We want to create a chain for a lot of people. TVL, I think, is also a good signal for you to understand if you're getting people to actually engage with it.

Obviously, we have our own product that is going to bring a decent amount of the TVL, but also all of our products.

Like the Chrome extension, yeah.

Other coins on the platform. And then there are the number of transactions, the number of wallets—all these things. Obviously, a lot of that can be changed by how much AI is coming into play and people creating agents. But we also wanted the chain to be AI-first, and so we have skills that are already deployed from Privy and from Uniswap, so that you can easily create your agent and interact with our whole chain.

I think we'll see where everything goes, but right now, we've been pretty happy with how things have launched. And the question is, how do we keep up this momentum?

Yeah. How into crypto is Vlad?

Oh, he's really into crypto. He's been on a lot of podcasts talking about it, and he really cares about it. And I think that's one of the reasons we have such a great crypto arm at the company. Even when the market was down, let's say in 2018 when we launched, a lot of companies or competitors were saying, "Crypto is dead. I don't care about it." Vlad and Baiju were actually on the other side, saying, "You know what? If that's something that our customers want, we're going to offer it to them." And right now, it's been a good bet for them.

Yeah. Very good bet. What is the biggest place where you and Vlad disagree?

I don't know if we really disagree on anything in particular. I think Vlad and I have been working super well together. The question is more that he will always want us to move faster, and sometimes I'm more the engineer in the background, being like, "Hey, I need a bit more time to build." But other than that, I think we're doing pretty well.

That's a good duo. Good duo. Johann, thank you, man. Is there anything that you're really excited about that we haven't covered, or anything that you're seeing in the industry that you think maybe others are missing that you want to cover?

No, I think that was a great discussion.

Amazing to be here. Congrats, my friend. Yeah, rooting for you. It's been very cool to see. And maybe Vlad says you need to move faster, but it feels like you guys have been moving pretty quickly.

Thank you. Appreciate it.

Congrats, man.

Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only. And the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in the companies, funds, or projects discussed.