Written by: CryptoLeo, Odaily Planet Daily
At midnight today Beijing time, Robinhood dropped 'multiple heavy bombs,' announcing the launch of stock tokenization, RWA L2, perpetual contract functions, and staking services.
The weak interaction between traditional funds and cryptocurrencies, and the lack of liquidity, has always been a 'heart knot' for cryptocurrency practitioners. At the beginning of 2024, the situation began to improve, with the approval of the BTC spot ETF promoting traditional funds to engage with cryptocurrency. Subsequently, other relatively mainstream cryptocurrency assets are also closely following in ETF approvals; by this year, the (GENIUS Act) ignited a 'compliance bull' from the perspective of stablecoins, and traditional finance has once again stepped into the arena. However, in my view, this is still not enough; the most important link in the connection—stock tokenization—has yet to fully unleash its potential.
Currently, among the institutions laying out stock tokenization, three have high compliance levels and are relatively familiar: one is Kraken, which has already launched its stock tokenization platform xStocks, now supporting all-day trading of 60 US stocks; the second is Coinbase, which is currently seeking SEC approval to issue blockchain-based stocks in the US. If approved, it will also allow Coinbase to provide traditional stock trading on-chain; and the third is today's protagonist Robinhood, which, while announcing its L2 (based on Arbitrum Orbit) and stock tokenization, also launched several new products, including perpetual futures for EU customers and staking for US users. Additionally, Robinhood will also gift OpenAI and SpaceX stock tokens to EU users.
As a result of this news, Robinhood's stock HOOD rose more than 12 points to $93.15 (at the time of writing).
Three major actions—Robinhood's forecast finalized
As early as May this year, Robinhood submitted a proposal to the US SEC aimed at achieving tokenization in the US securities market. Its proposal indicated that the tokenization scope may include traditional assets such as bonds and stocks.
In the early hours of yesterday, Robinhood co-founder Vlad Tenev posted on X, stating that Robinhood will announce an important announcement regarding its cryptocurrency business one day later. This release will unveil 'exciting' news from Robinhood Crypto. In the hours leading up to the official release of stock tokenization, rumors circulated in the market that 'Robinhood EU may launch tokenized stock trading services.'
Below, Odaily Planet Daily will specifically introduce the three major announcements made by Robinhood today:
Stock tokenization and its L2
According to its official website, Robinhood users can currently purchase over 200 types of US stock tokens on its app, including tokenized stocks like NVIDIA, Microsoft, and Apple. Specifically:
Stock tokens are displayed and traded in US dollars. When users place an order, Robinhood automatically converts it to euros based on the current exchange rate, charging a small foreign exchange fee of 0.1%. Moreover, there are no hidden fees;
The trading volume threshold is extremely low: transactions can start with as little as €1;
Trading hours nearly realize all-day availability: from Monday to Friday, users can buy and sell tokenized stocks 24 hours a day.
Robinhood has also launched related activities. As of July 7, eligible EU users can obtain SpaceX and OpenAI stock tokens worth €5 for free through Robinhood EU. Robinhood rewards a total of $500,000 in SpaceX tokens and $1 million in OpenAI stock tokens for this activity.
It should be noted that after stock tokenization, the stock code will not be the same as the token name (for example, Facebook's stock code changed from FB to META). The stock tokens will also change in accordance with the company's actions, such as a stock split (1 share split into 2 shares), and the tokens on Robinhood will also change (1 token becomes 2 tokens), and vice versa.
CEO Vladimir Tenev explained the three phases of stock tokenization during a speech in Cannes (recently held ETHCC):
Phase one: Tokenizing stocks into receipt tokens, with trading still settled in the existing traditional financial markets;
Phase two: Integrating Bitstamp to enhance liquidity and achieve all-day trading;
Phase three: Integrating blockchain to gain composability advantages.
Stock tokenization will initially be issued on Arbitrum. In the future, it will be traded on a Robinhood L2 chain based on Arbitrum Orbit. The Robinhood Chain is currently under development and will be optimized for stock tokenization, supporting all-day trading, seamless bridging, and self-custody.
Perpetual futures for European users
In addition to tokenized stocks, Robinhood also announced today the launch of perpetual futures for European users, set to launch later this summer. Users can open contracts with leverage up to 3x long/short, with more options to be expanded for advanced customers in the future. Additionally, to help users reduce the complexity of trading perpetual contracts, Robinhood has built an intuitive interface that makes it easy for users to set position sizes and manage margin. Orders will be routed through the Bitstamp perpetual contract exchange.
Cryptocurrency staking and a series of promotional packages
Launching cryptocurrency staking services for eligible US users, with ETH and SOL being the first available. Additionally, Robinhood has set no limit on the amount for user staking and has launched a deposit promotion, where users in the US and Europe can deposit cryptocurrency into Robinhood and receive a 1% deposit reward during a limited time (after July 7). If total deposits reach the target of $500 million, there is a chance to double the reward to 2%. Users who deposit before July 7 will receive a direct 2% reward;
Cryptocurrency credit card rewards: The Robinhood Gold Card offers US customers cashback on all categories of spending. Until this fall, customers can automatically purchase cryptocurrency with these rewards;
Cortex for Crypto (AI investment platform): Set to launch later this year, Robinhood Gold members can directly view insights, trends, and event-based market analysis on each token's detail page. This product aims to help customers quickly understand price and market changes in real-time.
Smart exchange routing: Evaluating multiple partner exchanges and routing user orders for the best prices. The larger the trading volume in the past 30 days, the lower the fee rate, with API support set to launch soon;
Tax lot: US customers can now view and sell specific tax lots from cryptocurrency trading, allowing users to strategically choose which lots to sell;
Advanced charts: Advanced charts from the Robinhood Legend app will be launched on mobile and will expand to cryptocurrency in August.
In a week where public companies announce new actions regarding cryptocurrency reserves, a series of services and packages launched by Robinhood are in a better position than ever. CEO Vladimir Tenev stated in a speech, 'We have the opportunity to prove to the world what we have always believed: cryptocurrency is much more than a speculative asset. It has the potential to become a cornerstone of the global financial community.'
In recent years, Robinhood has transformed from a retail brokerage into a cryptocurrency star, experiencing many industry ups and downs. Looking back now, all of the above has traceable reasons.
In these 7 years, Robinhood has made efforts in cryptocurrency
On the timeline, recounting Robinhood's cryptocurrency moves began in 2018, when in February of that year, Robinhood took its 'first step' into cryptocurrency by announcing that users could trade BTC and ETH on its platform. Initially launched in certain US states, it gradually expanded to trade more cryptocurrencies in more regions. Subsequently, Robinhood temporarily paused cryptocurrency trading multiple times due to the high volatility of cryptocurrency prices and other issues, and it has also experienced SEC scrutiny and fines. Fortunately, Robinhood has never stopped exploring its cryptocurrency business:
Timeline of cryptocurrency-related companies acquired by Robinhood
Since 2021, Robinhood has begun acquiring cryptocurrency and cryptocurrency-related companies, including:
In 2021, Robinhood acquired the cross-exchange trading platform Cove Markets, marking Robinhood's first cryptocurrency acquisition aimed at strengthening its core cryptocurrency trading products. Cove Markets allows customers to manage accounts across multiple exchange platforms and aggregate a large amount of data, and this acquisition aims to facilitate Robinhood customers' easier management of their cryptocurrency accounts.
In 2022, Robinhood announced the acquisition of British crypto platform Ziglu, which allows retail investors to purchase cryptocurrencies and has obtained Electronic Money Institution (EMI) permission from the UK's Financial Conduct Authority (FCA). 'Ziglu's European compliance and numerous European users' represent an effort by Robinhood to expand its business (but due to a significant downturn in the cryptocurrency market at the end of the year, Robinhood lowered its acquisition offer for Ziglu, and the acquisition ultimately did not go through);
In May this year, Robinhood announced the acquisition of the Canadian crypto platform WonderFi, which includes two regulated trading platforms, Bitbuy and Coinsquare. Analysts have stated that this acquisition is 'a key first step for Robinhood to enter the Canadian market,' and it is expected that the transaction could bring Robinhood 'approximately $250 million in annual revenue' or 'nearly 10% growth potential';
In June this year, Robinhood agreed to acquire Bitstamp for $200 million, with the transaction expected to complete in the first half of 2025. This acquisition will not only provide Robinhood with 4 to 5 million new cryptocurrency customers but also allows it to take over Bitstamp's more than 50 licenses held in Europe and globally, laying the foundation for its announcement today about launching cryptocurrency perpetual contracts in Europe;
Today, Robinhood acquired the AI investment recommendation platform Pluto, known for its AI-driven personalized investment advice and real-time analysis, which can provide its users with tailored investment strategies and analytics. The acquisition of Pluto also precedes its announcement to launch the AI assistant Robinhood Cortex, which will not only formulate strategies for stocks and ETFs but also cover news related to the cryptocurrency market and token price updates. Cortex will provide all relevant events that have occurred recently on the details page of the token, allowing for a better understanding of the reasons behind token fluctuations.
Development history of Robinhood's cryptocurrency products
While acquiring, Robinhood is also working hard to improve its product offerings:
As mentioned earlier, when initially promoting cryptocurrency business, Robinhood stopped instant deposits for cryptocurrency trading parts due to significant fluctuations in BTC and DOGE prices, which was the first hurdle it faced as a brokerage transitioning to accept cryptocurrency trading. Subsequently, Robinhood has undergone multiple investigations and fines from regulatory authorities.
Robinhood CEO Vladimir Tenev stated during a roadshow in 2021 that the company would fully invest in cryptocurrency and focus on expanding its cryptocurrency products, with users expected to anticipate new cryptocurrency features 'at some point.' This also marked the beginning of Robinhood's push for its cryptocurrency products.
Tenev indeed did not break his promise; as DOGE became popular, Robinhood seized the opportunity to test and launch the DOGE transfer feature, allowing DOGE to be transferred to external wallets. It also simultaneously launched cryptocurrency gift cards.
Subsequently, after the rise of DeFi, NFTs, etc., Robinhood announced the launch of a new Web3 wallet application, Robinhood Wallet (currently supporting dApps on Ethereum, Polygon, Arbitrum, Optimism, and Base networks), allowing users to access NFT markets, DeFi, DEX, and swap token functions, similar to other non-custodial wallets like MetaMask, but independent of existing stock and cryptocurrency platforms. After its launch, Robinhood Wallet is also expanding the chains, tokens, and iOS versions it supports. (Last year, for a period, tokens transferred out from Robinhood could serve as reference targets for short-term token price increases.)
By the end of 2024, Robinhood released its cryptocurrency data. As of November 2024, the value of managed cryptocurrency assets reached $38 billion, and Robinhood's nominal cryptocurrency trading volume reached $119 billion (in the past year). In 2024, its product updates include:
Achieved comprehensive coverage of all 50 states and territories in the US, and supported new currencies including SOL, PEPE, ADA, XRP, and WIF, bringing the total number of cryptocurrencies available to US users to 20.
Launched the Robinhood cryptocurrency trading API, providing tools to view cryptocurrency market data, manage portfolios, and place orders programmatically. The iOS and Android systems also offer advanced order types including stop-loss and limit orders.
By the end of the year, it announced the launch of ETH and SOL staking for European customers. Since its launch in the second quarter, more than two-thirds of SOL holders in the region have already staked their tokens.
Its wallet, Robinhood Wallet, in addition to existing support for Ethereum and Polygon, has also added swap functionality for Solana, Base, Arbitrum, and Optimism. It has also launched cross-chain and zero Gas exchanges on Ethereum and some of its L2s (as mentioned earlier).
Thus, Robinhood's complete set of cryptocurrency facilities is gradually improving, covering spot, contracts, staking, AI, and its own stock tokenization public chain. At that time, Robinhood probably did not expect that the 'first step' of opening cryptocurrency trading would have such a significant impact, and its products are now close to being able to become a 'unicorn' in the cryptocurrency industry.
'Seven years ago in spring, Robinhood picked up a real gun and pulled the trigger, but it had no impact at the time. Until today, Robinhood looks back and finds that the bullet hit the stock tokenization market.'
Forces at play: The spring of the stock market, the end of altcoins?
Currently, Robinhood has certain advantages over many other platforms in some aspects of cryptocurrency, such as unlimited ETH staking. Adhering to its consistently retail-friendly approach, it may also impose looser trading restrictions on some tokens compared to other platforms. However, the variety of tokens it currently supports is still limited, and altcoins that haven't landed may need to consider how to get onto Robinhood; for the stock market, the SpaceX and OpenAI stock tokens launched by Robinhood in Europe mark a democratization of private equity, allowing retail investors to access stocks that were previously unavailable for trading.
Although stock-like tokens are not a new idea, with several cryptocurrency trading platforms offering such products and many crypto platforms focusing on this direction, Robinhood's entry has a different significance.
The significance of cryptocurrency platforms creating stock-like token products lies in providing native cryptocurrency users with convenient opportunities to trade other stock assets. For compliant brokerage platforms, 'chain' and 'coin' represent a set of solutions to achieve more efficient settlement, better liquidity, lower trading abrasion, and link cross-regional and cross-timezone trading scenarios and users. In simple terms, it allows all ordinary investors to smoothly enter the market. In the future, for the same stock, will you look at Nasdaq or Robinhood in the pre-market?
Practitioners in the narrow sense of the 'crypto circle' have little to celebrate, as the liquidity of altcoins will be further squeezed, and 'incremental flow' has increasingly no necessity to enter the crypto market. In the future, besides 'coins that have passed ETF approval' and 'coins that can link with traditional finance and provide underlying infrastructure,' other altcoins may find it hard to escape the fate of extinction.
Although Robinhood is a relatively young 'alternative' brokerage, there is a gap in scale compared to large traditional brokerages, and it has been criticized for multiple operational issues, its recent 'move' will certainly provoke further reflection and planning from traditional giants who are already eager to compete.
Many product forms are not new; who is behind them is the key to life and death.
