E203｜In the Stock-Token Era, Unpacking Robinhood’s Business Model and Crypto Ambitions
Summary
Robinhood’s Stock Tokens launched in Europe are neither stocks nor 1:1 redeemable tokens, but securities derivatives issued under a MiFID II license that track US stock prices. 郑迪 summarizes the structure as “a mirror, not a mapping”: US-listed shares hedge the platform’s contract exposure, while European users have no shareholder rights and cannot mint or redeem shares with tokens or withdraw them to self-custody wallets. By contrast, Kraken/xStocks tokens can circulate on Solana, making them closer to genuine stock tokens but exposing them to greater cross-border compliance risk.
Crypto trading is Robinhood’s highest-margin growth engine, while stock tokenization could replicate that fee structure across more assets. The episode cites an SEC study showing that, for the same dollar of trading, market-maker rebates are roughly 0.8BP for stocks, 8BP for options and 35BP for crypto; with smart-routing premiums and slippage, crypto revenue can reach 55BP or even 57BP. 郑迪’s core view: “The stock business is already a relatively poor business,” and Robinhood wants to charge for on-chain stocks the way it charges for coins.
“Zero commission” conceals the difference between explicit and implicit charges; it does not make trading costs disappear. Coinbase explicitly charges retail users about 130BP, while Robinhood’s implicit crypto-trading revenue is roughly half that, so it may still be cheaper for users today. But a user might buy an asset trading at 140 for 140.4 and mistake poor execution for a timing error. 郑迪 calls this “a major difference between charging openly and charging covertly.”
In phase one, Robinhood is using a CFD-like structure to roll out 150 to 200 instruments quickly and compliantly; phase two would be fully mapped stock tokens that can be pledged, lent and freely transferred. 郑迪 suspects Arbitrum is currently more an internal ledger and future infrastructure layer, with price feeds, liquidation and matching still handled in a centralized loop. The episode stresses that phase two remains largely a vision, with insufficiently detailed technical documentation. If front-end fees decline more slowly than on-chain back-end costs, cheaper infrastructure could actually expand Robinhood’s and market makers’ margins.
Kraken/xStocks chose a technically more aggressive but regulatorily more fragile route. Backed shifts KYC responsibility to centralized exchanges such as Kraken and Bybit through a B2B API, while using Regulation S to block the US and several major jurisdictions. But once tokens are withdrawn to Solana, Raydium or ByReal, they can be transferred permissionlessly, meaning blocked users could theoretically still buy them on-chain. 郑迪’s view: “Once this model gains scale, I think regulators will take notice.”
郑迪 sees stablecoins as the first step in the US on-chain financial strategy, and STOs and the tokenization of everything as the second. His two-year view hinges on whether the SEC can introduce a fast track for security-token issuance. If the process is significantly simplified, US stocks, funds and Treasuries could absorb global on-chain hot money while affecting other countries’ tax bases and financing capacity. “Tokenize everything and capture global on-chain hot money” is his most direct summary of the competition.
Real-time settlement could ease the funding burden of the legacy financial system, but it would also expose new liquidity risks at the seam between on-chain and off-chain markets. During the 2021 GME episode, the DTCC at one point required Robinhood to post nearly $3.7B in collateral, while its available capital was about $700M. BUIDL’s supposed real-time redemption likewise depends on Circle’s $100M USDC prefunding pool, which was unavailable for 23 hours on March 5 this year. For private assets such as OpenAI and SpaceX, sufficiently liquid on-chain or OTC markets could begin influencing IPO underwriters’ pricing power, while forcing VCs to learn secondary-market trading and hedging.
Deep dive
1. The Same-Name Stock Tokens Take Two Opposite Routes
泓君 frames the issue around two seemingly identical products: Robinhood offers European users more than 200 names including Apple, Tesla, Microsoft and Nvidia; Kraken and xStocks have turned more than 60 US stocks and ETFs into tokens tradable on Solana.
郑迪 distinguishes the structures: Bybit’s early product was closer to a price-tracking CFD, while it later announced support for xStocks on DEXs. Kraken/xStocks currently emphasize 1:1 backing and on-chain withdrawal, taking the route of crypto exchanges moving into the US equity market.
Robinhood is moving in the opposite direction: starting from a licensed brokerage and the securities market, it wraps a securities derivative as an on-chain, ledger-based Stock Token. The two routes may converge technically, but their current legal structures, user rights and regulatory risks are entirely different.
2. “A Mirror, Not a Mapping” Defines What Users Actually Buy
郑迪 repeatedly emphasizes that Robinhood users are “not buying stocks.” Strictly speaking, they are not buying Tokens corresponding one-for-one to the underlying shares either, but derivative contracts with the platform that settle according to the underlying’s price movement. Robinhood’s official materials also state that users do not receive shareholder rights in the stocks or ETFs.
The shares held in the US are tools Robinhood uses to hedge its CFD exposure. If a user buys a Tesla contract and Tesla surges, Robinhood, as the direct counterparty, needs the gains on the underlying shares to pay the difference. Those shares are not mapped one-for-one to each Token, which is why the structure is only a “mirror.”
Dividends, stock splits and other corporate actions are simulated as well: after Robinhood receives dividends on the underlying shares, it mirrors the corresponding economic benefit to European contract users rather than passing the actual dividends directly to token holders.
The clearest test is minting and redemption. Stablecoins are 1:1 mappings because users can deposit dollars to mint them and later burn the stablecoins to redeem the dollars. Robinhood users can neither deposit shares to mint Tokens nor exchange Tokens back for shares.
3. A Securities License Lets Robinhood Scale With Less Weight
郑迪 warns: “Putting a security on-chain does not make it a cryptocurrency; it is a security.” A MiCA crypto license is insufficient for this business. Robinhood needs a MiFID II securities license, and the episode says it obtained the relevant authorization in Lithuania this May.
Bitstamp, acquired by Robinhood, obtained an MTF license in Slovenia last September under the MiFID II framework. MTF stands for Multilateral Trading Facility. Under the EU passporting regime, a license in one country can cover the broader EU market; without MTF status, even a general securities license does not permit order-book matching.
If Robinhood issued fully backed stock tokens directly, it could also face heavy requirements around prospectuses, registered securities, investor protection, KYC and anti-money-laundering controls. 郑迪’s judgment is that the company is not unable to meet them; it simply does not want those requirements to slow a rollout covering 100 to 200 names.
4. Arbitrum Currently Looks More Like a Ledger Layer Than a Permissionless Market
Robinhood chose Arbitrum but has not adequately disclosed the underlying architecture. 郑迪 leans toward the view that phase one mainly uses the public chain to record transactions and prepare for future full mapping. The alternative is that the chain is mostly part of the story and the product remains in the CFD phase indefinitely.
刘锋 and 郑迪 compare the structure with BUIDL: the public chain can record transfers and trades, but the off-chain ledger remains the priority. Robinhood’s matching, price feeds, liquidation and settlement can all be handled in an internal closed loop, meaning the blockchain has not eliminated centralized control.
xStocks explicitly cites Chainlink for its price feeds, while Robinhood has offered no comparable explanation. 郑迪 sees that omission as a sign of centralized pricing, while stressing that this is an inference. If the platform itself determines the reference price, the pricing-feed layer could become a source of profit.
5. 0.8BP to 57BP Explains Robinhood’s Crypto Ambitions
The episode cites an SEC study from earlier this year on Robinhood’s business model: market-maker rebates on stock orders are roughly 0.8BP, compared with about 8BP for options, or 10 times as much. Robinhood’s stock and options orders mainly flow to market makers such as Citadel and Virtu.
Crypto market maker B2C2 offers a base rebate of about 35BP. Adding smart-routing premiums and roughly 20BP of slippage, the platform’s revenue per unit of trading can reach 55BP or even 57BP. “That is more than 50 times stocks.”
That fee gap directly changes the revenue mix: stocks may contribute only $40M to $50M in trading revenue per quarter, while crypto, even at lower volumes, could contribute $200M to $300M—comparable to interest income from margin lending and idle customer cash.
郑迪 therefore calls crypto trading Robinhood’s “biggest Beta”: the platform wants users to trade options more than stocks, and wants them to trade coins even more, because the same amount of customer activity generates an order-of-magnitude difference in revenue.
6. Falling Coin Volumes Expose the Volatility of Robinhood’s Revenue
Robinhood’s crypto trading volume peaked in the fourth quarter of last year as markets rallied after Trump took office. After the market pulled back in the first quarter, volume declined month by month, from about $11B in March to just over $8B in April.
郑迪 notes that if users “trade crypto stocks instead of crypto,” those transactions are still counted as stock orders and generate rebates closer to 0.8BP. Activity in crypto-related equities cannot offset direct coin-trading revenue dollar for dollar, making quarterly results more vulnerable.
That creates the commercial rationale for stock tokenization: the asset remains legally a security, but if its trading mechanics can replicate crypto-market rebates, slippage and 24/7 liquidity, Robinhood could move low-yield stock flow into a higher-yield fee structure.
7. Zero Commission Simply Hides the Price in Execution Quality
泓君 reduces the mechanism to the user experience: the market price may be 140, while a Robinhood user buys at 140.4 or sells at a lower price. The platform displays no commission but earns through inferior execution, market-maker rebates and routing. 郑迪 confirms that this is essentially correct.
Coinbase explicitly charges retail users about 130BP, while Robinhood’s implicit crypto-trading revenue is roughly 55BP. 郑迪 acknowledges that Robinhood may currently be half as expensive on direct costs; his question is why the market calls the former expensive but describes the latter as “zero commission.”
At Interactive Brokers, roughly 60% to 70% of revenue comes from interest and about 30% to 40% from trading, with the latter relying mainly on explicit low commissions. Its chairman has said that in 2021, selling customer order flow accounted for less than 3% of all orders.
郑迪 attributes the difference to the customer base: Interactive Brokers serves cost-sensitive institutions that will complain and switch, while Robinhood has predominantly millennial consumer users who are prone to chasing trends and getting carried away. He even calls them the company’s highest-quality “retail marks.”
8. Robinhood and Market Makers Form a Virtual Investment Bank
郑迪 uses the analogy of Interactive Brokers’ chairman to explain PFOF: Robinhood is like an investment bank’s sales department, while Citadel, Virtu and similar market makers are the trading desk. If a customer is willing to transact between 190 and 192, the desk can first buy at 190 and then sell to the customer at 191, earning a low-risk spread.
As 郑迪 describes it, Robinhood cannot directly become the customer’s counterparty through trading, so orders are generally routed to market makers. Market makers may internalize most orders in their own dark pools and send only the portion requiring hedging to exchanges. B2C2 plays precisely that counterparty role in crypto.
刘锋 adds the distinction: Coinbase primarily operates as a matching exchange, while Bakkt and eToro, with a structure similar to a DEX, take the other side of customer trades in-house. Interactive Brokers mainly earns interest and public commissions. They cannot be compared solely on headline fee rates.
9. Smart Routing Gives Way from “Best Execution” to the Highest Rebate
Smart routing determines which market maker receives each customer order. 郑迪 acknowledges that he has not fully understood every technical detail, but says that under PFOF, routing is not evenly allocated and often prioritizes whichever name on the whitelist offers the highest rebate.
This is why the EU, UK, Canada, Australia and Singapore prohibit PFOF for stocks and options: rebates can pull brokers away from best execution. The US has not banned it, but requires brokers to disclose order destinations, rebates, execution prices and the gap between those prices and the NBBO through Rule 606 reports.
US brokers must also let retail users query the relevant data for the previous six months, creating additional IT costs. Crypto trading currently has no equivalent disclosure regime and often does not fall directly under securities regulators, creating what 郑迪 calls “a regulatory gray zone with no one at the wheel.”
He expects the US eventually to bring crypto PFOF under Rule 606-style disclosure rather than ban it outright, though the outcome depends on Congress. As of the recording, he believed the model was “unlikely to be challenged” before next November’s midterm elections.
10. Market Orders Make Slippage Look Like the User’s Own Mistake
郑迪 uses Solana as an example: if the market price jumps rapidly from 140 to 160, a user placing a market order at 140 may actually fill at 143 or 144. A limit order can avoid slippage, but retail users are most likely to use market orders when chasing or dumping into a volatile move.
The more hidden problem is how users explain the outcome afterward. A user who sees a fill at 141 followed by a market price of 146.3 may think they chased the top and the price then pulled back, without realizing that the market may never have actually traded at the corresponding price. “That is purely the result of slippage.”
泓君 asks whether a difference of a few cents is worth retail users’ attention. 郑迪’s answer is “not important,” which is exactly what makes the business model smart: the pain per trade is tiny, while the institutional-scale effect is large, and users do not know how much the platform is making.
He compares it with an indirect tax: people think they have not paid personal income tax while overlooking the VAT embedded in the goods they buy. Likewise, users think they are paying zero commission while missing the markup, slippage, rebates and less-than-optimal execution price.
11. The $4.8M-a-Day “Bleeding” From Altcoins Shows Up in Market Structure
The second conclusion of the SEC study shocked 郑迪: excluding external ETF inflows into BTC and ETH, market makers extract roughly $4.8M a day from the altcoin market through rebates and related trading structures.
He sees this as one explanation for why altcoins have yet to enter a broad-based bull market and why the market continues to bleed. The problem is not merely insufficient depth; every turnover transfers part of the value to routers and market makers.
刘锋 offers an important correction: the issue does not occur only on centralized exchanges, since market makers can hedge on-chain as well. But DeFi trading paths are public, so routing quality can often be analyzed; the chain can therefore provide stronger transparency and competitive tools.
12. Cheaper Back Ends Do Not Necessarily Mean the Front-End Owner Earns Less
刘锋 identifies the central fork in the future market: if the back end matters most, blockchain’s ability to lower clearing and trading costs should quickly push all front-end quotes lower. If the front end controls the user, Robinhood and major market makers need only cut prices slowly to retain most of the gains.
郑迪 leans toward the second outcome. Ordinary users see only the price Robinhood gives them and have no idea how cheap the underlying on-chain infrastructure has become. Lower-slippage, more transparent back-end tools could initially reduce intermediary costs instead.
His projection is that if front-end fee rates decline more slowly than back-end costs, Robinhood’s and B2C2’s margins will expand. “The fee rate on revenue is falling nowhere near as fast as costs are falling.”
13. Only Phase Two Turns Stocks Into Composable On-Chain Assets
郑迪 believes Robinhood ultimately wants to issue fully mapped stock tokens because that would both lower back-end costs and create more ways to charge fees. The company is using CFDs in phase one because current regulation does not allow it to issue 150 to 200 compliant security tokens in a lightweight manner all at once.
Robinhood has already described a permissionless phase two: tokens could enter public chains, become collateral in lending protocols and be combined with other DeFi activities. 刘锋 stresses that this vision works only if real minting, redemption and on-chain transfer are open.
Both speakers remain cautious that, for now, “a lot of this is still just vision.” There is not enough technical documentation on how Arbitrum will work with the system, who controls the assets, or how pricing and liquidation will be handled.
14. xStocks Leaves KYC With the Exchange but Cannot Keep the Tokens Contained
郑迪 sees Backed’s cleverness in providing only a B2B API rather than serving retail users directly. Centralized exchanges such as Kraken and Bybit handle KYC and can use Regulation S to block users in the US, EU, UK, Canada, Australia and other regions.
His first concern is the “Rest of the world”: Kraken may not hold securities licenses in many target markets, yet still offers US stock tokens to local users. The episode uses Singapore as an example; 郑迪 does not understand why Kraken, without a local license, can still accept users there.
The second loophole comes from free withdrawal. Eligible users can transfer Tesla and other tokens to Solana and trade them on Raydium or ByReal. Once the tokens leave the centralized exchange, they are no longer subject to equivalent KYC restrictions, meaning blocked US users could theoretically still buy them.
郑迪 therefore believes the structure could even be used for tax evasion, while clearly limiting that to a theoretical risk. The main xStocks names may currently trade only a few million dollars a day and have not yet drawn regulatory attention. “Once it gains scale, it is a different story.”
15. Robinhood’s Advantage Is Putting Tens of Millions of Users on-Chain Without Friction
刘锋 believes the two routes have no fundamental end-state disagreement: whether an internet broker enters crypto or a crypto exchange enters TradFi, the goal is the tokenization of everything, true mapping and real-time settlement. The difference lies in how each route navigates the current regulatory environment.
Direct minting and redemption in the Backed model already exist, but certification, registration and operational complexity have kept them from reaching mass adoption. Robinhood’s most valuable move is to bring its existing tens of millions of users into an on-chain experience “smoothly and without them noticing.”
郑迪 is therefore more bullish on the scalability of Robinhood’s current route: even if CFDs gain scale, they are less likely to trigger the same level of regulatory risk. xStocks is closer to the ideal product, but permissionless transfers and cross-border sales make the risks more pronounced as it scales.
16. The STO Competition Is Really a Fight for Global Hot Money and Tax Bases
郑迪 describes the US strategy as a “combination punch”: stablecoins first, then the tokenization of everything and STOs, with the latter potentially arriving within two years. Issuing only a domestic stablecoin without enough on-chain assets could still direct capital toward US securities.
The on-chain hot money he refers to includes Western capital unwilling to enter exchanges or undergo KYC, as well as funds from China, South Korea, Russia and Turkey. But he explicitly acknowledges that the sources cannot be verified: “We don’t know. We have no evidence. We cannot make things up.”
His core projection is: “Tokenize everything and capture global on-chain hot money.” If the US goes on to control on-chain KYC, whitelists and anti-money-laundering systems without sharing the data with other countries, other jurisdictions could lose both tax revenue and the ability to finance local assets.
Hong Kong and other markets are also pushing RWA, but 郑迪 believes their issuance speed and scale remain far behind the US. Ondo’s structure—nesting BUIDL and passing the yield to offshore retail users—is typical: blocking US users under Regulation S may satisfy US rules without necessarily satisfying the rules of the investors’ home jurisdictions.
17. An SEC Fast Track Is the Real Starting Gun for the Tokenization of Everything
郑迪 cites two speeches by new SEC Chair Atkins: Trump wants the US to become the global crypto center, but security tokens remain constrained by the forms and procedures of the 1933 Securities Act era. The current system, he says, “is not fit for the on-chain era.”
Regulation A allows retail participation, but after years of use, reportedly only 4 projects have issued security tokens through it. 郑迪 therefore locates the bottleneck in regulation rather than technology: Kraken and Bybit are technically capable of supporting 1:1 mapping, but the challenge is avoiding the issuance of unregistered securities.
His two-year forecast comes with a clear condition: the SEC must introduce a substantially simplified process or fast track for security-token issuance. The back end would then migrate on-chain, while Robinhood, Coinbase, the NYSE and Nasdaq would still handle listings, distribution and user access.
18. Real-Time Settlement Could Prevent the Next GME-Style Funding Break
刘锋 revisits the 2021 GME episode: US equities then settled on T+2, requiring Robinhood to post collateral with the DTCC before securities and cash actually settled. During the Meme-stock volatility, the DTCC at one point demanded nearly $3.7B, while Robinhood had about $700M on hand.
The roughly $3B gap forced Robinhood to seek a deferral, emergency financing and trading restrictions; otherwise it could have faced liquidation or insolvency. In hindsight, many people regard this explanation as more consistent with its business model and settlement constraints than the conspiracy theory that it had colluded with Wall Street to pull the plug.
US stocks moved from T+2 to T+1 at the end of May 2024, but that still does not amount to real-time on-chain settlement. Retail users can trade repeatedly within a day and generate enormous notional volume, while the underlying assets are not delivered until settlement, leaving brokers with bridge-financing pressure.
郑迪 adds a Trump Coin example: according to his account, Moonshot was at the time the only app in the entire market that allowed users to buy coins directly with dollars on a Sunday, creating a funding shortfall that may have exceeded $1B. An unnamed Web3 institution provided more than $1B in U at short notice, preventing a similar interruption.
19. “Real-Time Redemption” Still Stands on an Off-Chain Prefunding Pool
Redemption of the money-market fund underlying BUIDL is actually T+1. To create a near-T+0 experience, Circle maintains a $100M USDC pool: it pays the redeemer in USDC first, then recovers the off-chain funds from BlackRock the next day.
郑迪 notes that the BUIDL size cited in the episode was $2.8B, with a minimum ticket of about $5M. A $100M pool can therefore handle only about 20 redemptions of the same size. On March 5 this year, the prefunding pool was unavailable for 23 hours, and Ondo used its own funds to cover 2 redemptions.
Ondo later sought to have PayPal build another reserve pool using PYUSD. 郑迪 therefore reduces the key requirement for on-chain money-market funds to “a very thick prefunding pool” and warns that if products such as Ethena are nested through 7 or 8 layers, they may no longer settle in real time during a liquidity crisis.
20. Once Private Assets Gain Volume, Pricing Power Could Leave the Traditional IPO
郑迪 believes CFDs on private companies such as OpenAI and SpaceX could begin influencing financing valuations if they build sufficient volume. “Where the trading volume is, there the pricing power is.” The impact is currently limited because the products are new and trading volume remains small.
He uses Chainalysis as an example: its last valuation was $8.6B, while the secondary market reportedly traded at more than $2B. In the next financing round, investors will find it difficult to look only at the old valuation and ignore the new price established through continuous trading.
泓君 questions whether the supply of existing shares could constrain liquidity. 郑迪 responds that CFDs do not necessarily require constant delivery of physical shares. If OpenAI traded $100M or even $1B a day, the market could discover the price first and settle the position once at the actual IPO.
泓君 takes the argument to its IPO conclusion: if the open market has already priced the company thoroughly, the underwriter’s offer price represents a separate set of expectations. She uses the example of Circle potentially trading at $20B to $30B before its IPO but opening at a $7B valuation, arguing that traditional pricing could be materially too low.
21. The Secondary Market Gives VCs Liquidity—and Could “Blow Their Minds”
刘锋 notes that blockchain already has Pre-Market and Hyperliquid-style contract markets that let longs and shorts price assets before their tokens officially list. But liquidity remains insufficient and price discovery unstable. Robinhood would change the nature of these markets if it brought in a large user base.
郑迪 believes not every private asset can be listed. It needs sufficient attention and a high probability of eventually going public, giving the contract a clear settlement outlet after trading for a period. Without attention there is no liquidity, and without liquidity there is no product value.
For VC and PE, the secondary market can provide early exits, a way to buy back undervalued assets and a hedge for overvalued holdings, but it also requires investors to understand secondary-market battles. 郑迪 says many institutions are merely “pricing players” and may be forced to move earlier or learn trading; otherwise, “they could end up completely overwhelmed.”
泓君 and 郑迪 both disclosed that they did not hold Robinhood stock at the time of recording. 泓君 added that she had held it previously but had already sold by then.