Mar 6, 2024

Trading platform Robinhood announced recently at ETHDenver that it will allow users of its Robinhood Wallet to access swaps on Arbitrum, a layer-2 blockchain atop Ethereum.

Video transcript

Robin Hood and Arbitra announced a new partnership during East Denver. The collaboration is going to allow Robin Hood wallet users to interact with ARBITRA, which is the layer two on top of Ethereum. The two entities are working together to support access to cross chain swaps and other campaigns that lower the barriers to use web three on Robin Hood wallet. Joining me now is off chain Labs. Chief strategy Officer AJ Warner of Chain Labs is a core developer of the Arbitra protocol and Robin Hood crypto general manager, Johan Brat, welcome both of you. Thank you for having. Good to see you too. Eve Denver was crazy. How was it for both of you? I think I told you before the show. I'm still recovering. Yeah, I mean it was a, it was a wide week uh between the announcement and the energy was, was really high and so really exciting. I don't know about you edgy. Yeah, I know there was a lot going on in the Denver. Um Obviously the announcement was the highlight. Um got to, you know, meet with a lot of different arbitral community members, delegates protocols that are building on top and, you know, digesting feedback is always really important and it was great to see positive energy throughout the arbitra community and also the broader space I think. Uh, we all, you know, it was nice to see, um, people energized this year. Yeah, the news has been out for just about a week, Denver just wrapped up days ago. Uh What kind of response have you received from the community? Let's talk with folks. Let's talk about first folks who are using the Robin Hood wallet and then we'll switch over to Arbitra. So Johan, what kind of response have you received so far? So far? A very positive response. Uh You know, when we talk to our customer, we, we really understand that the main pain point uh to, to access Wet three as being the the high gas uh situation and uh with the market rallying in the past three months, it's, it's been a situation that keeps getting worse and worse. And so, you know, by launching swabs on Albi from the, the Robin and Wallet is offering a lower cost access to, to web three, we have improved efficiency. We're also reducing the costs um overall and we also have a higher throughput. So people have been very excited and I think, you know, they will be more excited when we, we keep building on top of arbitra. Um The community reception from the Arbitra side has been fantastic arbitra. Um since, you know, the protocol launched about 2.5 years ago has long had a reputation for being, you know, the home of defi, especially outside of Ethereum where obviously the gas fees are super high. But as the leading layer two, with the most liquidity and adoption, it's really sort of cemented itself as that home, the home of, you know, defi trading, et cetera. And the community was really excited about this because this is like the elevation from, I would say, you know, a much more crypto native audience, much more crypto native community that has the ability to on board the masses. And that's why working together with Robin Hood is really critical and really exciting of an opportunity for us because we take that opportunity to bring all of the creativity energy that the builders on arbitra are building with within the D five sector and have the ability to advance all of that, you know, incredible work that they're doing to an audience that Robin Hood can help attract. So it's really an amazing synergistic relationship. I say between the Arbitra community and Robin Hood as a product and also as a community I would say as well. Um And the community's response to that has been extremely receptive. I think we can measure community sentiment by what the token is doing. And I believe that the Token uh rallied a bit on the news. Uh AJ you mentioned, I, I don't, I hate saying this but on boarding the next million or billion users into web three, bringing those non crypto native users into web three. Um It sounds like this partnership is one that you believe will help uh bring folks who are maybe crypto curious or who have not yet dabbled in crypto into web three yet. How is it going to do that? Is there still an education barrier there? I mean, this was announced at East Denver that is very much focused on folks who are already operating in web three. How do you see this bringing uh new users to the space? Yeah, that's a great question. So I think that the the announcement is obviously Denver, it's considered one of the biggest conferences of the year. So that was an important target point for us. Um But in terms of the audience, I think there's two components of this, the the onboarding experience for non Crypton users has to continue to get better. And right, and that's one of the things that I think is so exciting with Robinhood. I remember opening my first Robinhood account, I think it was probably 2015 and 2016. And that experience with stocks and sort of engaging retail stocks has been a, I would say Robin Hood's, you know, a hallmark of their success and working with a team that is very focused on user experience and user on boarding is we think is one of the most exciting parts of this partnership, the idea that sort of, you know, web two companies coming into web three will bring users themselves without a web three product that will enable those users to feel like this is a product that is worth investing their time, I think has been one of the biggest barriers to entry so far. Right. It's if your education process is that Ethereum, Ethereum is gonna cost $80 to use. It's a very high bar and burden sort of as Joan was describing earlier to expect users to necessarily be able to adopt that. But if you ever try arbitra and use the arbitra experience, you know, it's 250 millisecond block times. It's extremely snappy confirmations. It's the ability to tap into deep liquidity, like you might see sort of in the stock market, you don't have a lot of those limitations that you might see, but we're doing it also in a way that's much more crypto native, right? So we have plans for campaigns together for user growth and audience growth and those are going to be a little bit different than, you know, you might see in a typical web two environment from a growth perspective. Um but having these campaigns are important, having these education is education opportunities are important um along the way. So, you know, I don't think we're there today in terms of on boarding the masses. But I think what we've done is take huge order of magnitude improvements over the last 24 months to make it viable. And I think that's where we're at right now. John, I want to get your perspective here. Does that mainstream audience? Does Robin Hood's users actually care about crypto as much as we think they do in the space. And I'll tell you why I'm asking this. We are so focused on Bitcoin hitting an all time. I touched an all time high yesterday after retreating again, but all time highs are being hit kind of across the board. The S and P 500 is closed to all time. Highs gold is close to all time highs and no one is talking about these things. And so do you think that maybe we are in this bubble? But we like to talk about this technology and we think people want it but, but I don't know, you have the, the user research, tell me, do do your users really, really want this as much as we think they do. II I think they do, you know, I think we, we are all very excited about this week and the past few weeks, I think after, you know, kind of this like weird situation end of 2022 where everyone was kind of talking about the, the FTX and and the Binance situation, you know, the, the space got a bit like spooked for, for a year, I think. And you know, I was on your show a couple of times last year. And um, you know, we're more in the, in the winter of the market. But since then, we are really saying that the on trainin activities is really popping up and, you know, that show that it's not just the volatility aspect or it's just not people caring about whole time highs. Like people are actually buying on Robinhood and then transferring out onto their, their wallet or so their wallet and actually engaging the free space. I think that is a clear, you know, data element that, that shows that yes, people do care. And I think A G is totally right. Like we on the crypto community, we, we've been too focused on building the tech and we've been kind of forgetting a lot of the people and forgetting how to on board them into that space. And that's the main reason why we don't rob in wallet in the, in the first place. Uh People were used to uh something like Robin it very easy to use with a simple U I that they could understand with educational module. Um And then, you know, before the wallet they were basically going to another. So because they wallet and they had to suddenly create keys and bridge and all of these kind of things that are somewhat complicated. Um And I think that's why this partnership has been so important and that's why the world has been successful. We've seen that uh we have 100,000 of users in 100 and 40 plus countries. So, you know, for me that, that clearly shows that people want to be on chain, they want to self a coin and they want to be able to access to, to web three um you know, safe and any money that they can also really appreciate in a fun way. Yeah, that was actually one of my big takeaways from East Denver. Also, I moderated a panel with uh John, you were supposed to be on the panel, but Hillary from your team joined us, we talked about the on boarding of the consumer of the crypto consumer and that was the big focus of our panel, you know, focusing less on the infrastructure, less on the technology which is there and that we've been building for a long time and more on the needs of consumers. AJ I'm gonna kick it back to you. Uh What from your perspective, what is the need of that non crypto native consumer? Maybe it's a hybrid answer in the sense that we need to have the user experience be extremely, extremely easy, right? Like Joan said, you know, expecting people to write down past keys um is hard, is complicated, right? I mean, I always say that but then I always also get reminded like opening a bank account is hard and you have to go like, you know, we we're just used to it. So some of this is not so much about it being like complicated, but maybe sort of the stakes being elevated because it might be self custody, but also just like a different on boarding experience. But we need to make sure that I can be sim simplified as much as we can. But at the same time, I would say, stay true to the ethos of the industry. And I think that's a very important hybrid um sort of building out systems which just replicate, you know, under the hood and on top of the hood, you know, a traditional, you know, financial experience or web two experience is probably in my perspective a little bit too far, but we need to figure out that balance. And I think that that's a really important thing to, you know, to, to, to focus on like so and I think that's probably why it's been harder, right? If we just had like traditional log log ins with like forgot your passwords, like this would be super easy and super simple. The thing that makes it complicated is trying to replicate that with a lot of the ethos of the industry um around self custody, sovereignty, et cetera. So I think that's probably why it's taking longer than you'd think in terms of being able to match those user experiences. But I think that that's actually very healthy in the long run because we are trying to set up a totally new paradigm I, I love that you brought that up and I hate to harp on this. I keep asking do people really want this? Uh because again, in Denver, I was listening to a talk, hearing about a survey about privacy and while people say they want privacy, they didn't, they preferred convenience over that. And I think that we see people preferring convenience over some of the things that we talk a lot about in this space like self custody, like self sovereignty, like privacy. And so uh Johan, what needs to happen to make that easier? AJ I think you started explaining it, but Johan, I want to kick it off to you. How do we make that more seamless? So that folks start taking some of the topics we talk about in this space more seriously over the convenience um and start educating themselves a little bit more about um some of these solutions to the problems we have, you just said it, I think education is going to be key on a lot of these points. I I also think, you know, we have a very lucky situation. Um The three of us being in the US where, you know, we have payment rails that works very well. We have uh you know, laws and, and things like this that prevents a lot of bad things to happen. But we have to think so that crypto is a very global product and, and not everyone is in the same spot as, as we are. So, you know, we are trying to build a world in a way that actually works for, for everyone. Um But yeah, I think overall it's going to be education, it's going to be um helping understand to our customer. Like what really means when, um, you know, your, your accounts can be frozen at any time or when, uh you don't own the keys of, of the crypto or when um you know, you're transacting on chain with where like these kind of things. Um We, we are really dedicating our time to build this kind of educational modules. So when people will be able to really understand what, what is happening and what they are doing, then they can make the decision for themselves and then they can decide if they want to be into the space or not and if they want to be in that space, um we will be there. I think the other thing that, you know, a G point at some point is cost of things. Um You know, we are very proud on the robin side to, to try to offer the lowest cost on average for, for all the crypto. Um It's something that, you know, we are spending a lot of time on because the experience of a customer trying to buy an NFT going from fiat to crypto, they have to pay a fee transferring, they have to pay a fee buying the NFT, they have to pay a fee. You know, it's, it's not the best experience and especially if the fee is very high, you start with heroin bugs and at the end you, you end up with like $10 value. That's, that's not going to be a great experience for people. So I think we just education and removing a lot of these barriers to entry will be able to really, uh, get more people into the space. It's just that you bring that up. I'm a Canadian. I think about a few years ago there was the trucker protest in Canada and politics aside, I think a lot of Canadians were surprised that bank accounts could be frozen so easily. And if so if the education doesn't come from platforms, like both of yours, I think just real world events, um make people kind of sit up and pay attention to what's going on. So it will be an interesting path ahead before we wrap it up. Uh, let's say I'm a Robin hood wallet consumer, talk me through what this partnership unlocks for me in the coming weeks and months. Yeah. So really just right now you can, uh, open the wallet and you will be able to have in app natively swipes on the, on the wallets via the, the arbitra network. And it will also enable hundreds of on the arbitra to occur on the wallet. So that's really like the, you know, immediate change. And then we, we are going to keep working together with, with ARBITRA and we'll uh build cross chain swabs that then we are excited about. And I think we'll be able to launch that very soon. AJ any final words? Thank you so much for having us. I'm really excited about this partnership with Robin Hood and working with Joe and his team. It's an opportunity for the artworks ecosystem to continue, like I said earlier to um get access to users, which I think is one of the most important things that we're lacking in the moment in this space. And um I'm sure, you know, it's been one week but looking forward to working closely together for many years to come. Awesome. Thanks so much for joining me today guys. That was off chain lab's chief strategy Officer, AJ Warner and Robin Hood crypto general manager, Johan Kurt.

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