Robinhood’s new wallet will give customers full control over crypto and NFTs.
The new wallet will complete with the likes of Coinbase Wallet and MetaMask.
There is a waitlist for the wallet, which is expected to launch by end of the year.
Robinhood is wading deeper into the world of crypto, announcing on Tuesday that the company is building a standalone, non-custodial wallet that will give customers full control over their crypto assets.
The company is currently in the process of rolling out wallets to millions of users, but those wallets—so-called custodial wallets—are managed on the back-end by Robinhood. The new product, by contrast, will be akin to Web3-focused products like MetaMask and Coinbase Wallet that give users full control but also require them to manage their own private keys (essentially a password that unlocks access to their crypto stash).
According to the company, the forthcoming wallet will let users “trade and swap crypto with no network fees,” access DeFi services and store NFTs.
In an interview with Decrypt, Robinhood’s Crypto CTO Johann Kerbrat said the new wallet will seek to replicate the no-fee model for which the company is known.
“We talked to a lot of people [who said] ‘you start with a certain amount of money and once you get the NFT or asset you want, you have 50% less money because of transaction fees’,” said Kerbrat, explaining that Robinhood is hoping to remake the wallet experience.
It’s not clear for now how exactly Robinhood will achieve that given that, in the case of the Ethereum blockchain especially, users typically must pay significant fees—sometimes over $100 at times of high congestion—to ensure their transaction is processed.
According to Kerbrat, part of Robinhood’s solution will entail “partnering with liquidity partners to get the best price,” but he didn’t elaborate further.
In response to a question about whether Robinhood’s no-fee plan is relying on Ethereum’s upcoming switch to a proof-of-stake network (where fees will be much lower), a spokesperson replied, “There’s multiple solutions to deliver on that vision, and we’re exited to show everyone how we’re going to do it.”
As for the wallet itself, Kerbrat also that design and a smooth interface—traditional strengths of Robinhood—will be a major focus as the company develops the new wallet. He added that Robinhood is working to ensure there are “guard rails” for new users who are more at risk of losing their funds due to a lack of familiarity with storing private keys and other elements of Web3 use.
Such design features may help Robinhood stand out next to the likes of MetaMask, which is widely used but whose interface is perceived by many as clunky.
Robinhood says it plans to trot out beta versions of the wallet over the summer with the goal of making them widely available by the end of the year.
The company, whose core product is stocks, is late to the crypto game, however, and could be hard-pressed to compete longterm with established players like Coinbase. This is especially the case given that Robinhood has struggled financially in the last year and recently laid off 9% of its employees—a situation that coincided with the decline of the GameStop-led meme stock trading craze that powered it through much of the pandemic.
Meanwhile, the company has also been losing key staff, including multiple members of its communications team and its one-time crypto CEO, Christine Brown.
There is, however, a wild card that could shape Robinhood’s future. Namely, billionaire and crypto celebrity Sam Bankman-Fried (SBF) recently took an 8% stake in the company. If SBF decides to pursue a full-blown acquisition, or to use his existing stake to exert leverage, Robinhood’s prospects could change significantly.
Kerbrat, meanwhile, says the company is pushing full-steam ahead with its crypto-based vision of the future. “A lot of people are staying outside of Web3 because of the cost,” he said. [But] Web3 is here to stay and we’re building for the long-term. It’s a bet on the future.”
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