Robinhood Unveils AI-Driven Ethereum Layer-2 Network and Tokenized Stocks

Summary

• Robinhood has launched the public mainnet for its Ethereum-based layer-2 network, Robinhood Chain, which is AI-driven.
• The platform aims to combine traditional finance with cryptocurrency services, starting with Stock Tokens.
• Shares of Robinhood surged over 8% following the announcement, although they remain below their 52-week high.

Robinhood, the publicly traded brokerage, has officially launched the public mainnet of its Ethereum layer-2 network, dubbed Robinhood Chain, which is touted as "AI-native." This new network, powered by Arbitrum, is designed to connect the realms of cryptocurrency and traditional finance.

In an effort to enhance trading capabilities, Robinhood has formed partnerships with industry players including BitGo, Chainlink, Uniswap, and Pleiades to support automated market making for liquidity and proprietary trading. Johann Kerbrat, Robinhood's Senior Vice President and General Manager for Crypto and International, emphasized that decentralized finance (DeFi) presents unique opportunities that traditional finance cannot match, although it has historically required technical expertise to navigate.

Robinhood aims to simplify this by integrating the benefits of traditional finance with DeFi, thereby expanding financial access globally. The network will also support the company’s Stock Tokens, which are tokenized representations of shares from major companies like Nvidia and Apple. Users in eligible regions, excluding the U.S., will be able to leverage these tokens in lending pools and as collateral in DeFi applications.

Additionally, Robinhood plans to enhance its wallet features, enabling perpetual trading via the decentralized exchange Lighter, and allowing eligible U.S. users to participate in Robinhood Earn, which offers a 7% APY on the dollar-backed stablecoin USDG.

Geographically, Robinhood is set to expand its user base by welcoming clients from Canada and soon Singapore, which will help bolster its existing customer count of nearly 28 million. The company also expects to introduce crypto services to users in the U.K. shortly.

Following the announcement, Robinhood's shares (HOOD) closed up over 8% on Wednesday and have risen nearly 20% in the last month, now trading at $108.65. However, this price remains more than 29% lower than its 52-week peak of $153.86. Last month, the company laid off about 10% of its workforce due to a 34% decline in revenue from cryptocurrency services, which dropped to $134 million from $221 million quarter-over-quarter.