Ep. 735 Robinhood Crypto’s Biggest Move Yet with Head of Product Seong Lee

Robinhood launched a permissionless Layer 2 blockchain called Robinhood Chain, built on the Arbitrum technology stack but not deployed on the Arbitrum One network, featuring 100-millisecond block times and high throughput designed specifically for tokenized real world assets, a focus head of product Seong Lee says no existing chain had made its primary mission. The chain burns Ethereum as its native gas token for technical and developer-friendliness reasons rather than economic ones, and is open to developers, retail users, and institutions for building apps and accessing stock tokens and DeFi applications. Live projects on the chain include Privy, Uniswap, Lighter, and Arcus, operating as decentralized perpetual and spot exchanges.

Stock tokens launched approximately 10 days before the recording and are backed one-to-one to equities held in secure custody, giving holders clear rights to the underlying value while enabling global, 24/7 access through a decentralized protocol with full compatibility for self-custodied wallets, decentralized exchanges, and DeFi lending protocols as collateral. Holders do not receive traditional cash dividends or voting rights; instead, dividends are reinvested through a multiplier mechanism that causes each token to dynamically represent more shares over time, a structure Lee compares to how liquid staking tokens accrue more ETH without changing the number of tokens held. Stock tokens are available through the Robinhood wallet, a fully self-custodied mobile wallet live in more than 120 countries, making this one of Robinhood's largest global releases to date. US users are excluded because the domestic regulatory framework for stock tokens does not yet exist.

Robinhood Earn is the first embedded DeFi product offered inside the Robinhood app in the US, allowing users to convert dollars one-for-one with no fees into USDG, a stablecoin issued in partnership with Paxos and backed one-to-one with US dollars. Those funds are then lent to the Morpho decentralized lending protocol through the user's own self-custodied wallet at an algorithmically set yield currently around 7 percent annualized. Robinhood has arranged insurance for the Earn product underwritten by Lloyds of London and Realm, covering users in the event of a cyber attack or smart contract exploit.

Robinhood launched Crypto Perpetual Futures in the EU through Robinhood Europe in Q3 of last year under MiFID2 and MiCA licenses, and Lee describes it as one of the fastest-growing products in that region. The product has expanded beyond crypto to include oil, QQQ ETF contracts, gold, silver, and Euro-USD FX contracts, and features a visual take-profit stop-loss tool designed for first-time users. Lee describes perpetual futures as a better product than options for gaining leverage in general. He noted that CME is currently suing the CFTC over the regulator's allowance of proliferating perpetual futures products, a legal development with potential implications for Robinhood's EU-based offering.

Robinhood's agentic trading feature creates a separate isolated account that connects to an AI agent of the user's choice through the Model Context Protocol, with safety controls placed on agent actions. Crypto trading within agentic accounts is not yet live but Lee says it will roll out soon.

Robinhood offers two crypto routing options users can toggle in trade settings. Market maker routing allows Robinhood to receive 95 cents from its market maker for every dollar of notional volume. Smart exchange routing sends orders directly to partner exchanges Bitstamp and EDX with tiered maker fees that drop as low as zero percent for high-volume traders and no added spreads. Lee confirmed Robinhood is now available in Canada for crypto trading, and while he declined to confirm definitive plans for crypto options, he said Robinhood is always listening to customers.