No Priors: Artificial Intelligence | Technology | Startups
00:17:52 · Sarah Guo, Vlad Tenev
[00:17:52] S1: It might be celebrated. Yeah. [00:17:54] S0: Think for sure. And I think that's how it's gonna happen. That's the likely scenario one year from now. I think you also have confounding factor of a lot of the people that are going into these AI labs are former researchers, and so they're like excited by doing research, and I think they're confused as to why this is being poorly received. From their perspective, it's like, I'm a researcher, I was brought into a research organization to do research, and now all these academics are mad at me. But yeah, I think that, yeah, and I've said this to folks that work at the companies, I think it would have been much better if they found some mathematicians and kind of collaborated with them to not make it seem like there's this dark data center dystopian future where one company is gonna make all of the scientific discoveries. [00:18:50] S1: Can we talk a little bit about both the, you know, new ways you wanna extend ownership as part of Robinhood and then also how Robinhood is intersecting with what's happening in AI? Maybe we can just start with what you guys are doing with tokenization or your vision for it.
00:18:50 · Sarah Guo, Vlad Tenev
[00:18:50] S1: Can we talk a little bit about both the, you know, new ways you wanna extend ownership as part of Robinhood and then also how Robinhood is intersecting with what's happening in AI? Maybe we can just start with what you guys are doing with tokenization or your vision for it. [00:19:06] S0: Yeah, so tokenization is really, it's a new innovation and the idea is almost similar to stablecoin. So the way a stablecoin works is you take some dollars or treasuries, put them in a wrapper, put them in a box, and then you mint and burn tokens against the box, and the traditional assets stay custodied at a traditional institution like a like a bank, and then the tokens can trade freely on DeFi. So they can move anywhere around the world, they can trade in fractional amounts, they can be swapped in different protocols or lending pools, and that opens up just [00:19:48] S1: They have ton software characteristics.
00:19:50 · Vlad Tenev
[00:19:50] S0: Yeah. So you can kind of extend that concept to any real world asset. So we've done it with stocks, so you can put stocks in a box and minute burn tokens against them and they can trade all over the internet on blockchains like software. You can do it with private companies, you know, instead of a stock, it's like a SPV with private company shares, behaves the same with some slight differences around redeeming and things of that nature. You could do it with art, collectibles, real estate. So what we launched, and we've been playing around with tokenization and experimenting with it for many years. So last year we had an event in the South Of France where we launched stock tokens, which are tokenized versions of US stocks, and we did it in Europe. But it wasn't fully DeFi enabled, so if you're a European customer using Robinhood, you could trade them and they felt very much like real stocks, but you couldn't actually, you know, send them out on Ethereum or on the blockchain and put them in pools or compose them with with other smart contracts. Now this year we took it one step further, we relaunched stock tokens with fully DeFi enabled characteristics and we launched it in conjunction with Robinhood Chain, which is our new blockchain built for real world assets. And Robinhood Chain has become one of the fastest growing, I think the fastest growing across a lot of metrics, blockchains in history. And what we've seen is just an explosion of developer activity. I think we announced recently it's the number one chain in developer activity too, and developers have taken stock tokens, would become kind of like Legos, and have started building all sorts of interesting smart contracts, NFTs, pooled assets where you'll take, for example, a meme coin and link it with a stock token, and this is just sort of month one and month two type activity. Yeah, I think these financial primitives as the foundation of a developer platform will become really really big, and I think what's more exciting to me than this is Robinhood Chain is a way to enable the long tail of countries. So people in countries that don't have highly functioning capital markets or financial systems like places in South America or Africa. Anyone with a smartphone and a non custodial wallet can now get exposure to US markets at incredibly low cost.
00:22:33 · Vlad Tenev, Sarah Guo
So in the same way that I think stablecoin became the default way for people in these countries to get access to dollars, stock tokens and products like that will be the default way to get access to US equities for all of these people. [00:22:50] S1: May they have access to not just copper pots, but wealth creation.
00:22:53 · Vlad Tenev
[00:22:53] S0: Exactly, and private companies. And really the vision for Robinhood Chain and tokenization is, let's just take all the things that work on Robinhood and put them on Chain and make them available to people in all these countries. And I think one thing I've learned is a lot of people, so we're new to operating a blockchain, we're new to operating these on chain smart contract products, and a lot of the criticisms that Robinhood has received, we've been called a corpo chain, The best blockchains are, so they told me, they said the best blockchains are managed by these organizations and consortiums, and everything's decentralized, and you guys are a corporation managing a chain, how is that gonna be as good? Well, maybe you sacrifice a little bit of organizational decentralization purity, but what you get is just focused leadership and someone, you know, or some group of people with very very clear direction pushing things forward. And the other thing is also, I think it is good to have Robinhood backed products on the chain too. A lot of chains take the approach of let a thousand flowers bloom, let the developers just build all this stuff, and we love the developers as well, but I think having primitives like stock tokens that have our backing that people can trust, we've seen that that just creates more interest to build on them, because to some degree people know, okay, Robinhood's backing them, they're legit, that's trusted brand. We know they're not gonna go away, so that gives them much more confidence to build than, you know, if it was just a team of, you know, two or three engineers somewhere that are offering these primitives.
00:24:46 · Sarah Guo, Vlad Tenev
[00:24:46] S1: Is there an example of a composition that you think should exist on stock tokens or has already come from the ecosystem that you're excited about? [00:24:55] S0: I mean, one of the things that I'm thinking about is, yeah, it's like how can we take some of these derivative products, like options? You make like really nice smart contract native options contracts? You know, there's been a tremendous amount of innovation in the traditional markets that's to some degree like stymied by how hard it is to just move off of mainframes onto more modern things and take all of the counterparties that rely on the system being predictable and slow moving. So I think a big part of it is just let's provide the primitives and let the developers put them together in new ways. Don't wanna presuppose what developers come up with, because I wouldn't have been able to tell you that stock token linked NFTs or stock token meme pairs would would become a thing. Like, just had no way to foresee how quickly those things would grow and become become real. [00:26:06] S1: It's not necessarily ownership. What is your perspective on prediction markets?