Robinhood is taking the plunge in the nascent world of web3, announcing a new wallet application that allows customers to access non-fungible token markets, decentralized exchanges and swap tokens.
The new wallet will be a standalone application from Robinhood's existing stock and crypto platform and function similarly to other non-custodial wallets like MetaMask, the US brokerage announced at crypto conference Permissionless on Tuesday. Still, Robinhood is hoping that the sleek and intuitive design of its new app will make engaging with web3 destinations less cumbersome for newbies. The firm plans to fully roll-out the product to its entire user base by the end of the year.
“At Robinhood, we believe that crypto is more than just an asset class. DeFi has the potential to be the operating system that powers the future of financial services, and we want to help people experience the full range of possibilities that these revolutionary technologies have to offer,” commented Vlad Tenev, co-founder and CEO of Robinhood. “With our web3 wallet, we’re building a product that will satisfy the most advanced DeFi believers while creating a secure on-ramp for those who are just starting out in crypto to go deeper into the ecosystem.”
Another bonus: the firm plans to cover gas fees, which during certain periods of activity can make swapping coins prohibitively expense.
To eat the gas fees, the firm will take a page out of its equity playbook, relying on third party liquidity providers to receive the best price on a given swap. Robinhood does not plan to take a cut of the profits as it is focusing on product market fit for the product in the short-term.
"We're making it not scary, easy to use," said Robinhood's crypto CTO Johann Kerbrat in an interview with The Block.
The move illustrates a broader trend of firms in the centralized crypto market launching products in DeFi. Coinbase announced early this week its own service that would allow clients to tap decentralized apps via its app.
Robinhood — which has come under fire for opening unsophisticated traders to complex financial instruments like options — said it will focus on educational materials to equip users as they dabble in DeFi.
"We will give you access to everything, but we will show you warnings on things that are risky. But at the end of the day we are not making decisions for you."
This piece has been updated to add clarity about the timeline for the product's rollout.