SEC commissioner Hester Peirce told Yahoo Finance on Friday that she now hopes to provide "greater clarity" for a crypto industry that long argued Washington, D.C., treated it unfairly and inconsistently.

Robinhood says a SEC crypto investigation is over

Rigetti Computing, Inc. (NASDAQ:RGTI) is a leading full-stack quantum computing company that operates quantum computers over the cloud, offering Quantum Computing as a Service (QCaaS) to global enterprise, government, and research clients.

Rigetti Computing, Inc. (RGTI): Among the Best Robinhood Stocks to Buy Under $20

Only a select number of Robinhood users can buy Super Bowl wagers. According to the company, eligibility is "based on the specific account investor profile that a user completes. It takes into account a number of things like investing experience, financial situation, and risk tolerance.

Robinhood lets users bet on Super Bowl outcome in tie-up with startup Kalshi

The billionaire co-founder of Robinhood Markets Inc. is targeting outer space with a new Silicon Valley startup to build a network of solar power stations in orbit.

Billionaire Backs Space-Laser Solar Startup After Robinhood Exit - Bloomberg

The recent downturn of cryptos and a potential government crackdown on the space make the outlook of Robinhood stock negative.

Crypto Carnage: Why Robinhood Stock Is Headed for a Massive Plunge

Cathie Wood-led Ark Invest divested a major stake in Coinbase and Robinhood amid the crypto market rally this week.

Cathie Wood's Ark Invest Offloads $52 Mln Coinbase & Robinhood Shares In A Week

Dogwifhat (WIF), a popular Solana-based meme coin, will soon be listed on the popular trading platform Robinhood.

Robinhood to list dogwifhat as WIF tags $1, is Coinbase next?

Bitcoin has led the crypto advance this year, but altcoins could start outperforming soon, analysts said.

Dogecoin (DOGE), PEPE, SHIB Rally Could Be Early Signal for Impending Altcoin Season

According to recent data provided by Whale Alert, two enormous chunks of Dogecoin, carrying 699,999,999 DOGE and 500,000,000 DOGE, were shoveled to major cryptocurrency trading platforms Binance and Robinhood. Combined, these DOGE lumps made up 1.2 billion dog-themed tokens.

Samson Mow Hints at Bitcoin's Next All-Time High Coming, SHIB Lead Breaks Silence on New SHIB Mega Deal, 1.2 Billion DOGE Moved to Binance and Robinhood: Crypto News Digest by U.Today — TradingView News

Robinhood

robinhood

There is a new hot employee benefit in town. Some public companies which offer have recently made “one-time” adjustment grants to employees as share prices fall. The phenomenon has been pronounced among , where many workers count restricted stock units as a crucial part of their total compensation package. stock-based compensation technology companies Technology stocks have been affected by increasing concerns about inflation, and the Nasdaq Composite, the tech-favorite stock market index, has dropped more than 9% since the start of 2022. Robinhood has taken steps to reduce possible attrition among its 3,400-strong workforce due to its recent stock performance. According to verified Robinhood professionals on the professional social network Blind, the stock-trading app granted equity to new employees who started at the company after its debut on Nasdaq on July 29, 2021. Employees who started at the company before July 2021 have mostly retained the value of their initial new-hire grants, explained a verified Robinhood employee on Blind. The grant price for these employees might be $15 per share or even lower, depending on their tenure. Despite its popularity among retail investors, shares of Robinhood have struggled since its . The company’s shares traded 8% lower at the end of its first day of trading, and the share price is down 84% from its all-time high of $85 as of Jan. 19, 2022. initial public offering How much stock are Robinhood employees receiving? Robinhood’s “one-time” adjustment grants new hires additional stock over the next 24 months to help employees “break even.” “The new equity is adjusted by how much your equity is below your target today,” a verified Robinhood employee said on Blind, referring to an employee’s initial equity grant as a new hire. The equity grant is not retroactive, which means any differences or potential losses since an employee’s start date and Robinhood’s adjustment may not necessarily be accounted for. A Robinhood employee shared a hypothetical of an employee who received an offer for $300,000 in total compensation and joined in July 2021. If the hypothetical employee now earns $200,000 because of the difference in Robinhood’s share price over the last six months and their offer letter, they will receive an additional grant of $100,000 each year for the next two years. The grant is intended to “reset” an employee’s pay to the promised $300,000 amount in the offer letter going forward. Robinhood’s one-time equity adjustment grant differs for each employee depending on their offer letter’s promised compensation. In the hypothetical, the employee set to earn $300,000 each year would have suffered a pay cut of $50,000 because of the lost value of the stock ($100,000 per year) divided by their half-a-year tenure. The bottom line Professionals should consider factors outside of base salary to determine their total compensation package. If offered, stock-based compensation, such as stock options or restricted stock units, can be an attractive benefit and lead to potentially life-changing windfalls. However, stock-based compensation involves risk. Share prices can be impacted by the company’s past performance and prospects for future growth and external factors if shares are publicly traded on a stock exchange.

How Much Stock do Robinhood Employees Receive?

Fintech has emerged as a rapidly expanding industry and improved accessibility has been one of the significant contributors to its success. Fintech companies have adapted their products according to the preferences of the millennial demographic, using simplicity, user-friendliness, and transparency as their guiding principles. A company that has been successful at exploiting this dynamic is Robinhood. Robinhood is leading the modernization of investments because it offers everyone an equal opportunity to participate in the financial markets. Robinhood's Mission Statement Two Stanford graduates, Baiju Bhatt and Vladimir Tenev, founded the company. Following their experiences in the world of investments, they decided to bring their talents together in Menlo Park, California, to build Robinhood. With its name drawn from a fairytale, Robinhood's mission was to provide access to financial markets to anyone, not just the wealthy. Since Robinhood's launch in 2013, it became evident that consumers who found value in their products most frequently belonged to the millennial generation. Robinhood users during 2015 were over 80% millennials, aging an average of 26 years old. As a result, the founders confirmed their belief that young people are not opposed to participating in financial markets; rather, their wealth prevents them from accessing investment channels. The Revolutionary Business Model Robinhood began as a platform for trading stocks and ETFs. The Robinhood platform offered this feature without charging users a commission fee. In response to growing subscriber numbers, the company was able to raise significant amounts of venture capital. As opposed to charging an investment service fee, Robinhood derived revenue from payments for order flow. Through the rebates it receives from market makers and trading venues, Robinhood can collect a revenue stream. Compared to the old system of collecting brokerage fees, this business model was truly revolutionary. To expand the company's consumer base and generate new revenue streams, the company began to refine its existing offering and expand the platform's capabilities. Robinhood Gold: A $10 Subscription Plan Robinhood Gold was launched in 2016 as a subscription model. The company initially charged a $10 monthly fee for this subscription, which would allow its users to upgrade to the complete Robinhood platform at an affordable cost. Gold subscribers have access to professional research reports, can trade on margin, and deposit instantly from their trading accounts. Now, Robinhood Gold is available at a much lower monthly price of $5 per month. In addition, Robinhood's cash management service allows users to have uninvested funds from their brokerage account managed by the company, offering a higher yield than most banks. FDIC insurance is also available for accounts with managed funds up to $1.25 million. Engaging With The Cryptocurrency Market The latest product offering from Robinhood is the incorporation of cryptocurrency into the trading platform. Recent years have seen a boom in the cryptocurrency market. In other words, this provided an opportunity to gain access to a new financial market that most traditional brokerage houses have largely ignored. As a result, Robinhood was presented with a valuable new opportunity by this key demographic. The new Robinhood platform includes a few features that are designed to ease existing uncertainties regarding . For users to be protected from drastic price changes, Robinhood restricts purchases to 1% and sales to 5%. This prevents orders from being executed if the cryptocurrency price radically changes over or below 5%. cryptocurrency exchange Taking this step is likely to make the firm one of the most attractive investments for young investors. The company has demonstrated its ability to think like a consumer and act in a way that meets its users' evolving needs. The March 2020 Blackout Despite this, Robinhood witnessed a service outage on March 2, 2020, one of the most intense trading days in the history of U.S. financial markets. The outage, unfortunately, lasted the entire trading day, causing massive damage to its users. Several prominent media outlets pointed to the outage as the downfall of a previous fintech giant. However, this outrage faded quickly, and the covid pandemic did not result in the long-term damage predicted. By 2020, the firm has proved to maintain a market share above 50% for new brokerage accounts, which is more than all incumbent legacy brokerage firms combined. More than 3 million Robinhood accounts were opened in the first half of 2020 alone. Ethical Responsibility In any new industry, success comes with a great deal of responsibility. Accordingly, Robinhood bears the weight of ethical duties applicable not only to a new fintech but to any firm. For example, the company is obligated to its users to maintain a solid and consistent information system for storing this data, and the growth of cryptocurrencies makes this responsibility even more important. A Benefit Or A Threat To Society? In 2020, Robinhood had to deal with an ethical issue involving the who had opened an account with the firm during the Covid pandemic. In a tragic turn of events, the young man committed suicide after believing he had lost over $700,000 by trading in the platform. untimely suicide of a 20-year-old man However, investigations revealed that the user had not suffered losses of that size; but instead, the Robinhood account app had not yet included the stock's option positions. As a result, the young man ended his life due to a misunderstanding caused by the delay in seeing the correct account balance on the application. There is controversy concerning whether Robinhood is at fault in this situation. One side has argued that there should be significant safeguards in place to protect the users against rash market behavior. As an alternative, one can say that the user assumes the risk associated with these choices. Because of this, Robinhood should not hold itself responsible for the behavior of its younger customers. Still Beloved By The People Robinhood may become copied by legacy brokerage firms, but like other fintech companies, it is likely to remain a favorite among young financial consumers. Unless additional incentives are provided, Robinhood's existing user base is unlikely to switch to a legacy brokerage firm. 3 Growth Lessons From Robinhood Take To Market, Playbook : Before they even had a viable product, Robinhood allowed users to sign up for an invitation-only, . 1. FOMO private beta They pushed a massive PR campaign around the private Beta, which was picked up by , cementing hundreds of thousands of customers, before they even had a working product. major news outlets If you need help getting your word out, you can try something or Newswire Prezly Robinhood created a referral-based onboarding process that offered rewards and prizes for joining a private beta. 2. Gamification: After users signed up for the private beta, they were put on a waiting list. Once on the waiting list, they got viral sharing options that allowed them to increase their place in line by sharing a unique link, or by sharing the early beta access on social media in order to move up their place in line. This led to exponential growth, numbering in the millions before the product even went live. If you want to do this for your own product, you can use something like (if you rather not waste time coding it yourself). prefinery.com The number one problem companies have is that they overcomplicate the sign-up process. 3. Simplicity: Robinhood removed anything superfluous and made the CTA as straightforward as possible. The copy read “Robinhood $0 commission stock trading. Stop paying up to $10 per trade.” The single option. Opt-in. (Get early access) Robinhood has always been focused on making things as simple as possible for their users, so it only makes sense they made the onboarding fall in line with that prerogative. So take notes fam. Virality + Gamification + Fomo + Simplicity = Billion Dollar IPO

Robinhood: Virality + Gamification + FOMO + Simplicity = Billion Dollar IPO

Exactly four years ago, I was a young and vulnerable college senior with an inkling to invest her savings from internships and campus jobs into stocks and cryptocurrency. In 2017, I started my investing journey with two apps, Robinhood and Coinbase, which defined my financial story in ways that my “traditional” retail bank doesn’t come close to. Four years later, both apps are now IPO-ing in 2021. I remember watching the Coinbase IPO livestream with watery eyes and a racing heart in April. Back then, I wasn’t expecting that a few months later, I would be participating in the Robinhood IPO through its IPO Access feature. What follows is a collection of highlights from the Robinhood S-1, and some personal reflections on my past four years with the product. S-1 Highlights Extracted from the original Robinhood S-1 filing Mission To democratize finance for all. Differentiators Intuitive, elegant experiences that efficiently address customers' needs. Informative: Integrates info through Robinhood Learn and the news feed, which offers free news from trusted sources. Creative Product Design: Robinhood is the go-to mobile investing experience. It makes up half of all new app downloads among mobile investing and trading platforms. Mobile-first: Symbol of retail investing and finance in America. Fresh, people-centric approach. Delightful, engaging customer experience. Built a relationship with their customer that leaves them wanting to talk about Robinhood with their friends and family. Category-defining Brand: People-centric approach drives customer enthusiasm and engagement, resulting in the rapid adoption of products. Accessible information. Push notifications, widgets, customized updates to customers Financial Services at Internet Scale: App-based platform supported by proprietary cloud-based technology. Broker-dealer, tech stack, control over product development end-to-end, faster development cycles, better customer experience and stronger unit economics, greater flexibility, and robust/dynamic risk management. Enables rapid introduction of new products such as cryptocurrency trading, dividend reinvestment, fractional shares, recurring investments, and IPO access. Vertically integrated platform: No commission fees or account minimums → rapid growth and strong unit economics. Strong brand and platform accessibility created a network that enabled onboarding millions of customers with minimal marketing. The revenue payback period was ~13 months, average revenue payback period improved to less than 5 months in 2020 Innovative and Compelling Business Model: Founded in 2013 by Vlad Tenev and Baiju Bhatt. Exec team is full of seasoned industry veterans with a notable track record. Founder-led company, passionate and experienced team: Comments Many of us who have used Robinhood naturally tend to harp to our friends and family about its compelling user experience, or trades and new stocks/funds we discovered on the platform. Somehow, talking about stocks and investing became as fun (if not more) as discussing TV shows at dinners and parties. Robinhood is not the sexiest investment app I’ve ever seen -- it’s the sexiest app, period. I would argue that this creative, user-obsessed design is also what helped Robinhood “get away” with a lot of its controversies and hiccups in the past few years. One of my biggest was that to change the world, you must captivate people with magical experiences. Robinhood demonstrates this. takeaways from working at Apple Growth Strategies Add new customers to the platform Grow with customers Continue product and technology innovation Expand internationally Values Safety First Participation Is Power Radical Customer Focus First Principles Thinking Commitments to customers No commission fees Quality execution High-security standards Extra protection Dedicated support Transparency Quick Stats 18M Net Cumulative Funded Accounts: 17.7M Monthly Active Users (MAU): 81B Assets Under Custody (AUC): 115M (3 months ending on 3/31/2021) Adjusted EBITDA: In 2020: Revenue by 12/31/2020: , up 245% from $278M in 2019 $959M Net income by 12/31/2020: , compared to a net loss of $107M in 2019 $7M Adjusted EBITDA: , up from negative $74M in 2019 $155M Throughout the 3 months ending 3/21/2021: Revenue: , up 309% from $128M in the first 3 months of 2020 $522M Net loss: of , compared to a net loss of $53M $1.4B Adjusted EBITDA: , compared to negative $47M $115M Risk Factors It turns out that S-1s have pretty exhaustive lists of risk factors, so I will spare the reader and just mention those I found worthy of note: The majority of Robinhood’s revenue is transaction-based (including payment for order flow). So a reduction in spreads in securities pricing, the reduced levels of trading activity generally changes in business relationships with market makers, bans on PFOF, or similar practices can reduce profitability and increase compliance costs as well as negative publicity. Robinhood needs to maintain capital to satisfy liquidity needs (see GME) and support business growth and objectives. Litigation matters are expensive and time-consuming. And there are plenty of lawsuits. Organizational Structure Robinhood Markets (RHM) is the umbrella that owns Robinhood Financial (RHF), Robinhood Securities (RHS), and Robinhood Crypto (RHC) Cryptocurrencies On December 31, 2020, and March 31, 2021, and of Robinhood's Assets Under Custody were attributed to cryptocurrencies, respectively. Commission-free buying and selling of cryptocurrency are enabled by Robinhood's subsidiary, RHC. From February 21, 2018, the day before they introduced cryptocurrency trading on the platform, to March 31, 2021, the total cryptocurrency market capitalization has grown from approximately to approximately . $3.5 billion $11.6 billion $450 billion $1.9 trillion How Robinhood Makes Money from Crypto Robinhood makes revenue from routing transactions. More specifically, it gets compensated for routing users' equity, option, and cryptocurrency trade orders to market makers for execution. For equities and options trading, these fees are known as PFOF (Payment For Order Flow). They tend to be based on the size of the publicly quoted bid-ask spread for the security being traded. Robinhood receives a fixed percentage of the difference between the quoted bid and ask at the time the trade is executed.
When it comes to crypto trading, there are "transaction rebates" similar to the concept of trading fees. The rebate is a fixed percentage of the order value. Transaction-based revenue is calculated identically among all participating market makers.
Robinhood routes equity and option orders to market makers, in a priority order based on which one is most likely to give customers the best execution. In both retail and crypto trading, Robinhood claims to optimize for the best execution rather than transaction fees they can earn. This means that competitive pricing for customers is prioritized over transaction rebates. DOGE Robinhood makes it clear in the S-1 that a “substantial portion of the recent growth in our net revenues earned from cryptocurrency transactions is attributable to transactions in Dogecoin.”
As a result, if the demand for transactions in Dogecoin declines and is not replaced by new demand for other cryptocurrencies available for trading on the platform, Robinhood could be adversely affected.
In the first three months of 2021, 17% of Robinhood's total revenue came from transaction-based revenues earned from cryptocurrency transactions (vs. 4% in the first 3 months of 2020).
Today, Robinhood supports 7 cryptocurrencies for trading, but 34% of transaction-based revenue was attributable to Dogecoin (during the first 3 months of 2021). This remarkable fact raises questions about whether most users are using Robinhood crypto for meme tokens.
Other cryptocurrencies supported are ETH, Bitcoin SV, Bitcoin Cash, BTC, LTC, and ETH Classic. Robinhood discusses plans about supporting deposits and withdrawals of cryptocurrencies in the future. They acknowledge that the custody of customers’ crypto could result in loss, disputes, and other liabilities that can harm Robinhood’s business. Confessions of a Robinhood User Now that I’m done paraphrasing the highlights from Robinhood’s S-1, it’s time to share a bit about my journey with it. On June 23, 2021, I received an email from Robinhood about their new product, IPO Access: A way to buy shares of companies at their IPO price, before trading on public exchanges. I'm traditionally not a fan of buying IPOs, but I thought that doing this with Robinhood — as part of their IPO — would be very meta, and a "once in a blue moon" opportunity I likely won’t forget about. This IPO access moment represents the role that Robinhood plays in my investment life, and that of many others: A foray into something that seemed intangible; inaccessible. All of a sudden, what was meant for insiders and sophisticated investors is at my fingertips. Investing in the stock market was something my father always talked about while I was growing up. He would spend hours looking at charts with candlesticks and occasionally boasting about how much he made in a trade. He would tell me, "with investing you can make money birth more money." It always fascinated me, but it wasn't until I started depositing paychecks from my jobs during college that the possibility of investing my own money came to mind. Ironically, I was part of Brown University’s Investment Group, helping pitch stocks and invest a portion of the school’s endowment before I started investing in stocks. I was reading The Little Book that Beats the Market, taking investments classes, going to "super days" at big 4 investment banks, and almost became a trader on wall street before investing my own money. It’s crazy to think how little investing I did, despite being fascinated by the thought of it and satiating my curiosity through “approximate” activities. This is probably because, during the years of 2013 - 2015 (half of my college career), there wasn't a go-to product that made it easy for me and my friends to invest. It wasn't until the summer of 2016, when I went to Square Code Camp, a hackathon and fellowship for women engineers, that a new friend showed me her Robinhood app. I was immediately captivated by the UI: A beautiful white interface with streaks of neon green — it was clean, simple, and beautiful. Since then, the thought of signing up for a Robinhood account never left my mind. Going into my last year of college, I knew that it would make sense to put my savings to work rather than letting them sleep on negligible interest rates from my retail bank’s savings account. I didn't know if it was possible with my F-1 student visa status though. I decided to give the sign-up flow a try, and surprisingly, it worked! With my Robinhood account activated, and Ben Graham's Intelligent Investor in hand, I wrapped up my college career and began my personal investing journey. Robinhood says it wants to grow with its customers. It sure has grown with me over the last 4 years. When I was graduating from college, I was a starry-eyed 22-year old with some early savings from internships, determined to start a career in the tech industry and build her wealth. Over the years, Robinhood became home to the majority of my investments (and I do invest most of my savings). I came to trust this platform for deploying most of my money. And it’s also what I used to get some Dogecoin. Every month, I do a financial review of my expenses and investments. As part of this ritual, I check my Robinhood dashboard and get a mini adrenaline rush when I see the returns compounded over the last few years, from monthly dollar-cost averaging. I was able to grow my salary earnings thanks to the investments I made in index funds, stocks, and ETFs on Robinhood. What could be better As with any responsible user or critic, I will also share what I don't find as compelling about Robinhood. The attempts at making financial news and content accessible and digestible can sometimes be excessive, or so “punny” that I don’t understand the joke. I like that the weekly newsletter is bite-sized, but I wouldn't rely on that as my primary source of financial news. When I turn 30, I might feel a bit old for material that’s too “hip.” Robinhood Snacks: I haven't found compelling use cases for this. I wanted the card because it was cool and looked sleek but only used it once since getting it last year. Rewards on my normal credit card are better, and it's not even that good compared to some other cards. I think the Cash account and Crypto are examples of Robinhood going beyond their main entree, which is fine but I am mostly here for what they (currently) do best: retail investing. Robinhood cash and the debit card: I’ve been paying for Robinhood every month, and the main feature I benefit from is the instant ability to trade after initiating a transfer from my bank to Robinhood. It feels great, but I wish I had reasons to spend more time on Robinhood and get more bang for my buck. As a Robinhood gold member, I have access to L2 market data and more in-depth research. Perhaps more time on Robinhood could help me assess my portfolio more critically and reallocate/rebalance funds across ETFs, stocks, commodities, etc. More value for Gold members: Dogecoin is the only token I own on Robinhood, aside from some tiny transactions to test the ETH purchasing flow. I don't see a strong reason to hold much crypto outside of more crypto-specific platforms like Coinbase, Binance, or Metamask. Also, to truly support crypto, you can't just let people buy crypto but not transfer in or out. Maybe it's this lack of functionality that makes me only want to use Robinhood for DOGE. It’s easy to buy on Robinhood, and I do it for fun -- and just in case DOGE moons again (which it hasn’t). If Robinhood wants to grow its crypto arm, it will have to start supporting more crypto functionality and coins. But that comes with added liability and responsibility and competes neck to neck with other platforms that already do this for a living. I don't see a huge need for my stocks app to also support crypto — I'm ok doing that elsewhere, especially if I want to interact with decentralized finance. Crypto: Closing Thoughts I’d like to reiterate the power of magical UX: Say what you want about Robinhood's controversies—whether it's the GME saga or the recent outages and account takeovers—most of us can't help but love the product. It’s a similar story with Uber: It had a lot of controversies but it remains a superior ride-hailing product. No matter how many people tried to boycott it, most users still can't help but use it because it just works. I think a lot of Robinhood’s success comes down to an unrelenting pursuit of customer love. But perhaps what it will need to continue working on is long-term customer trust. International expansion is interesting. I want my friends in Brazil to be able to invest in Alibaba. I want a self-taught software engineer in Cambodia to be able to invest in Tesla. Last and certainly not least, I would like to see more of my female friends using Robinhood. I haven’t seen stats about the gender and demographic breakdown among Robinhood users, but my guess is that we are not at 50-50 yet. I love the practice and thought of investing because markets are the heartbeat of human economic activity. Thank you, Robinhood, for opening the door to markets for me. I hope you will continue to do so for the next billion users. Lead image source: https://www.sec.gov/Archives/edgar/data/0001783879/000162828021013318/robinhoods-1.htm

Confessions of a Robinhood User

In * *I explained some of the key highlights of meme investing during the pandemic. And among the most successful platforms, that enabled anyone to trade these meme stocks Robinhood played a key role. Understanding The Meme Economy However, I also explained the double soul of Robinhood. On the one hand, the mission of “democratizing finance” and on the other hand making big bucks from payments for order flow or “PFOF.” Now finally the Robinhood is out we can finally look under the hood of the company to understand how its revenues are broken up. prospectus Wall Street As Main Customer As the company highlighted in its financial prospectus: We primarily earn transaction-based revenues from routing user orders for options, equities and cryptocurrencies to market makers when the performance obligation is satisfied, which is at the point in time when a routed order is executed by the market maker. The transaction price for options is on a per contract basis, while for equities it is primarily based on the bid-ask spread of the underlying trading activity. For cryptocurrencies, the transaction price is a fixed percentage of the notional order value. For each trade type, all market makers pay the same transaction price. Payments are collected monthly in arrears from each market maker. And it continued: Because a majority of our revenue is transaction-based (including payment for order flow, or “PFOF”), reduced spreads in securities pricing, reduced levels of trading activity generally, changes in our business relationships with market makers and any new regulation of, or any bans on, PFOF and similar practices may result in reduced profitability, increased compliance costs and expanded potential for negative publicity. How do these transactions are computed? Robinhood explains: A majority of our revenue is transaction-based, in that we receive consideration in exchange for routing our users’ equity, option and cryptocurrency trade orders to market makers for execution. With respect to equities and options trading, such fees are known as PFOF. With respect to cryptocurrency trading, we receive “Transaction Rebates.” In the case of equities, the fees we receive are typically based on the size of the publicly quoted bid-ask spread for the security being traded; that is, we receive a fixed percentage of the difference between the publicly quoted bid and ask at the time the trade is executed. For options, our fee is on a per contract basis based on the underlying security. In the case of cryptocurrencies, our rebate is a fixed percentage of the notional order value. Within each asset class, whether equities, options or cryptocurrencies, the transaction-based revenue we earn is calculated in an identical manner among all participating market makers. We route equity and option orders in priority to participating market makers that we believe are most likely to give our customers the best execution, based on historical performance, and we do not consider transaction fees when routing orders. For cryptocurrency orders, we route to various market makers that we believe offer competitive pricing, and we do not consider Transaction Rebates when routing cryptocurrency orders. Doge Represented Most Of Robinhood Growth For Crypto Assets As highlighted in its financial prospects: A substantial portion of the recent growth in our net revenues earned from cryptocurrency transactions is attributable to transactions in Dogecoin. If demand for transactions in Dogecoin declines and is not replaced by new demand for other cryptocurrencies available for trading on our platform, our business, financial condition and results of operations could be adversely affected. Dogecoin was so important in terms of revenue streams related to crypto investing, that in Robinhood prospectus it was highlighted how the company would be negatively affected “if the markets for Dogecoin deteriorate or if the price of Dogecoin declines, including as a result of factors such as negative perceptions of Dogecoin or the increased availability of Dogecoin on other cryptocurrency trading platforms.” Who Are Robinhood Customers? As highlighted in the financial prospects “from January 1, 2015 to March 31, 2021, over half of the customers funding accounts on our platform told us that Robinhood was their first brokerage account.” And it continued “as of March 31, 2021, approximately 70% of our AUC came from customers on our platform aged 18 to 40, and the median age of customers on our platform was 31.” Here you find the full Robinhood financial prospectus!

Robinhood's Double Soul: Meme Investing And Big Bucks From Wall Street  

This by Hang and David occurred in hackernoon's official #only-at-hackernoon channel. Slogging thread Hang Jun 10, 2021, 3:38 PM 😂 1 I was about to drop my current ideation on WeWork and how much of a loser Adam Neumann is (he is a billion dollar loser) so that I can write something about Robinhood. Now this guy stole my thunder :smiling_face_with_tear: 😭 https://hackernoon.com/a-platform-for-the-people-robinhood-opens-its-ipo-up-to-retail-investors-b54p35e1 David Jun 10, 2021, 3:44 PM just normal chill guy shoeless in the city? that Hang Jun 10, 2021, 3:48 PM 💸 1 He was probably talking Masa from Softbank into pouring another 70 millions to WeWork David Jun 10, 2021, 3:55 PM jajajajaja.., So new news. Is RobinHood IPO Access gonna' work well? Hang Jun 10, 2021, 3:57 PM Hopefully! So far I haven't been able to access any stonk with IPO price yet. But I'm keeping an eye on it. It should work well. Robinhood has been very smooth so far, kudos to their product team David Jun 10, 2021, 4:00 PM What do you like about their product details? Hang Jun 10, 2021, 4:27 PM 💯 1 Hm good question. I just like the UI UX of the app because when you log in, right off the bat it gives you an interactive chart of how your portfolio does in 1 day, 1 week, 1 year, 5 years and all time. It's much easier to navigate than another portfolio I have, which is placed in Charles Schwab. Second is the fractional share trading. If you want to buy just a part of a share, on Robinhood, you can go to the stock, hit buy and enter how much of that share you want to buy. On Charles Schwab, you have to go to Stock Slice, search for the stock (and it has to be in SP500 list), enter a multiply of 5, confirm with 1000 steps, then you can buy it. Robinhood helps you buy it instantly, but Charles Schwab makes you wait for roughly 30s - 1 minute, sometimes 5. And since stock price changes , waiting is prob not a good game to play. Robinhood is just simpler, but it doesn't mean I don't like Charles Schwab. In term of resources for stock research, Charles Schwab is a much better place to go to. They offer you resources that can last you the whole week! every second Hang Jun 10, 2021, 4:28 PM I haven't used other platforms such as Fidelity, M3 or such, but that was my experience. My only concern is that Robinhood may or may not have security issues - so I would recommend not putting all your eggs in one basket 😄 David Jun 10, 2021, 9:52 PM I like how they put the buyer first with fractional share trading. It shouldn't be I want to buy 5 shares of $Tesla and ppl end up paying $3,050; it should be hey I want say $3k worth of $Tesla for whatever the share price happens to be right now. Hang Jun 11, 2021, 3:39 AM Actually you can do both of it - buy 5 shares or buy an amount worth of shares. I think they're the pioneer to offer commission-free investing/trading and other platforms followed suit, in order to not lose customers. David Jun 11, 2021, 4:21 AM So software wise, what should a trading platforms product prioritize to keep and gain loyal customers? Hang Jun 11, 2021, 4:43 AM Haha, so Im not a software developer- Idk if I should answer this. However, I think that it depends on the type of users you are. If you are an beginner or a retail investor, chances are you go with Robinhood bc it was very loose on policy. I think platform out there should prioritize . See the pictures below, these are my current Robinhood UIUX. I have lifetime update of my current portfolio, my stock price, and news out there. I can swipe left and right or scroll on the same screen. I have all the information I need. If I want to buy a stock, I can click the ticker and buy it, with a bunch of options already there, such as Buy/Sell at Market Price, or Buy/Sell at Limit Price. It’s very convenient for beginners. simplicity, convenience and constant updates Hang Jun 11, 2021, 4:45 AM I have familiarized myself with Charles Schwab but for some reasons I still reach Robinhood for price updates, because it’s already there while I log in. On the other hand, this is what I have logging in to Charles Schwab. I go to Charles Schwab only when I have my iPad or laptop, but not on my phone. And lol I’m on my phone 90% of the time. It requires a couple more navigations and when you’re in need of buying something at that exact price it can be very annoying. I hope I make senses. It’s just my personal opinion, my friends use Fidelity and Charles Schwab and so far they don’t have problems with either platform. I think any platform is good for you, as each has its own pros and cons. It really only boils down to your personal preference. Disclaimer: This story is intended only for informational purposes, which does not, and will not serve as a recommendation or offer of buy or sell of the securities. This reflects the opinions of the author who is an associated person of Hacker Noon and does not reflect the opinions of Hacker Noon or any of its subsidiaries or affiliates. Nothing in this story should be taken as a solicited advice to buy or sell the securities.

Slogging About Adam Neumann, Robinhood IPO Access, and What's Next in FinTech UX? 

In what appears to be a remarkable nod to the company’s mission statement, Robinhood Markets Inc has recently unveiled a new platform that’s the opportunity to buy shares in its upcoming IPO - an offer that’s usually out of reach for non-institutional investors. been designed to give retail investors Despite drawing criticism from established Wall Street stalwarts like , Robinhood’s actions come as a clear attempt to deliver on its mission statement, “to democratize finance for all.” Warren Buffett and Charlie Munger The popular online brokerage startup, which is set to launch an initial public offering in the coming weeks, states that its goals are firmly set on making finance more accessible. “We believe that everyone should have access to the financial markets, so we've built Robinhood from the ground up to make investing friendly, approachable, and understandable for newcomers and experts alike,” states . Robinhood’s mission The new platform, called IPO Access, has been developed to allow investors to access some of the brokerage’s own shares ahead of what promises to be one of 2021’s most significant flotations. In a blog post, : "Most IPO shares typically go to institutions or wealthier investors. With IPO Access, everyday investors at Robinhood will have the chance to get in at the IPO price." Robinhood said Interestingly, Robinhood claimed that the new platform will be available to all customers, without account limits in place or other restrictions. It also plans to list more IPOs for customers to buy into in the future. Inspiring New Investors During COVID-19 There’s little doubt that the COVID-19 pandemic has helped to put Robinhood in the position where the trading platform can launch a for investors to sink their teeth into. potentially huge IPO (Image: ) CNBC As we can see from the table above, 2020 and 2021 have shown significant growth in the number of Robinhood downloads, with the trading app leading rivals in the worlds of traditional stocks and crypto alike. The pandemic meant that individuals had more free time than usual, and lockdowns meant that some people were left with more of a disposable income than they typically find themselves with. As the stock market tumbled due to widespread uncertainty, it inspired more new investors to buy dips and attempt to build a strong portfolio for the first time. Platforms like Robinhood paved the way for millennial investors to try their hand at investing. The fact that the of the app is 31 - an age group that grew up during the post-2008 crash recovery period of the 2010s - shows that apps are giving more freedom to young and confident investors than ever before. median user age According to Maxim Manturov, Head of Investment Research at Freedom Finance Europe, the pandemic created an environment that removed many barriers to entry into the world of stocks and shares. “What we have analyzed above actually looks like the consequence of the pandemic and the stimulation packages that followed,” Manturov explained. “This created a pool of funds retail investors could start investing into stocks. As per Fidelity report, there were 26M retail accounts in 2020, i.e. up 17% compared to 2019, while the daily trading volume doubled.” More Than a ‘Casino’? In the wake of the GameStop saga, when a group of retail investors mobilised on platforms like Reddit to use Robinhood to buy into meme-based stocks, world renowned Wall Street investors Warren Buffett and Charlie Munger heaped criticism on . how Robinhood operates In May, as speculation surrounding Robinhood’s IPO began to heat up, had “become a very significant part of the casino aspect, the casino group, that has joined into the stock market in the last year or year and a half.” Buffett claimed that the app “If you cater to those gambling chips when people have money in their pocket for the first time and you tell them they can make 30 or 40 or 50 trades a day and you’re not charging them any commission but you’re selling their order flow or whatever. I hope we don’t have more of it,” Buffett explained. Buffett’s comments, however, drew a strong response from Robinhood. Jacqueline Oritz Ramsay, head of policy communications at Robinhood, responded in a explaining that "If the last year has taught us anything, it is that people are tired of the Warren Buffetts and Charlie Mungers of the world acting like they are the only oracles of investing. And at Robinhood, we’re not going to sit back while they disparage everyday people for taking control of their financial lives.” company blog post Robinhood went on to claim that the likes of Buffett and Munger have “insulted a new generation” of investors in their comments. While the is likely to tell us much more about whether traders agree with the ethics of the platform, making its IPO available to retail investors rather than institutions is certainly a step in the right direction - and a clear sign that the platform is at least working towards making all forms of investment more accessible to all. upcoming flotation of Robinhood

A Platform for the People: Robinhood Opens its IPO up to Retail Investors 

This Slack discussion by Kien Dao and Hang occurred in slogging's official #introductions channel, and has been edited for readability. After a few scans on Twitter and Reddit, I kinda understand the basic definitions and terminologies, with short squeezes and all that. My question is: Do you think there should be a law, or a requirement of some kind when comes to stock trading? I mean for all we know, hedge funds have been doing this “pump and dump” strategy since forever, but the moment a group of individual retailers is doing it, it becomes a problem? It ain’t fair that the hedge funds have the power to pressure platforms like Robinhood to limit their users. Kien Dao Feb 8, 2021, 2:52 PM : a strategy executed to manipulate the stock market. Fraudsters will buy up shares of lightly traded companies, spread rumors or false news about its prospects, and then sell them at a higer price to investors who were tricked by the news. Kien Dao Feb 8, 2021, 2:52 PM *Pump and dump I am mixed actually, this is certainly new to both the regulators and the people who run the platform. Hang Feb 8, 2021, 2:54 PM I mean it’s interesting that this is only the first time someone is screwing big guys over like this. It’s unprecedented. Considering the whole situation and the fact that “stock trading has always been for the rich”, I can understand why people are mad at Robinhood and other platforms. Kien Dao Feb 8, 2021, 2:55 PM Okay, so I think there should be a law to keep people informed before jumping into short squeeze/options in general - that kind of stuff. I remember back in the summer a student committed suicide after playing around with options on Robinhood  (which is totally free and accessible) without understanding it properly. He ended up losing a lot - and we are talking 5 figures here, for a college student with debts and financial dependency. We don’t want the same thing to happen to people who short on GME and/or jumping into the ships without any fundamental finance and stock markets knowledge. People are mad at Robinhood but the truth is, they’re forced to do such actions. I don’t think this is Robinhood or any other platforms' fault. Hang Feb 8, 2021, 2:56 PM I myself have account in both Robinhood and Charles Schwab and their response to this issue is familiar. Imagine you have a business, working for it so hard and finally have some success, to find yourself in the middle of the war between the people and the regulators. Big oof. Looking back, we understand that the finance industry was what made America today. They rise on capitalism and will protect it at all cost, although it's messed up. I have watched some movies, documentaries and read a bit about the global crisis in 2008-2009 - to learn that they will always get bailed out in one way or another. And I repeat, always. Hang Feb 8, 2021, 2:57 PM So, as someone who has been in this game for a while, do you think that it is necessary for platforms like Robinhood to take this kind of action (limiting the ability to buy and trade) towards their users, considering many of them, especially the most recent users, don’t acquire enough knowledge of stock trading? Do you think more of what’s going on may lead to the fall of Wall Street? Kien Dao Feb 8, 2021, 2:59 PM I think trading and options should be limited because not everyone is informed or educated enough on that matter. Remember that trading and investing are not the same thing. Trading is more risky, short-time, and requires a lot of technical analysis knowledge. Not everyone knows about it. Also, fuck Wall Street, lol. Hang Feb 8, 2021, 3:00 PM Now that you mention it, I agree that it’s important for people to be educated on a certain level to be in this game. And yeah, Wall Street definitely has it coming, lol! Kien Dao Feb 8, 2021, 3:02 PM However, if people are educated enough to go for options, let them be. But they have to be careful, the lost on option, shorting to be exact, can be limitless. Think millions. That's a lot of money for normal people like us. Hang Feb 8, 2021, 3:02 PM Now that Robinhood just announced that they’ll open again (some time tomorrow), what do you think is going to happen? Do you think the same situation will be repeated, or perhaps Robinhood themselves have come up with a solution/system? Kien Dao Feb 8, 2021, 3:04 PM People will go for it, people are aggressive, lol. The rich here, a majority of them, boil the people's blood. We are talking about people of all backgrounds, occupations, and educations. They just dump a ton of money on it without factoring in both fundamental and technical analysis. That's their action against the big finance guys. They try to boo the rich, betting their money in sinking stocks to drive them forward and fuck all who bet against these tickers. Some are even losing their savings. They just hate the rich that much. There is no way in hell GameStop can thrive in such a short time. The factors for a turnover, new member on board, or renovation in services are not enough to drive a stock to the moon overnight. Especially GameStop. The system sucks. The UX UI sucks. Can't even pay online with my credit card. But they are authorized to sell Sony PS5, lol 😂 Hang Feb 8, 2021, 3:04 PM Wow, so far the whole thing seems very Hunger-Games like, with the rebellion against the rich in the Capitol and all. I wonder if there’s going to be some kind of war 😂 Kien Dao Feb 8, 2021, 3:07 PM I mean, look at this: Hang Feb 8, 2021, 3:08 PM Idk 😂 hopefully not. But people will be angry for a while and there will be a stock markets war between Redditors (some of them are knowledgeable) and the hedge funds (backed by the government, duh). Even if they restrict on GME, they will find another stock with potential turnarounds (even very lightly) to bet on. Robinhood can’t just go after them forbidding one by one. I know one thing - it will be bad for Biden, who just took office for several days and probably is not tech-savvy enough to use and understand Robinhood thoroughly (hopefully his staff will help him out). And for Robinhood too, it plans to go IPO this year. Hang Feb 8, 2021, 3:08 PM That’s right, I also read an article saying that the citadel and White House are also behind this. If that’s the case, it’s definitely not looking good for Biden. Kien Dao Feb 8, 2021, 3:09 PM Yes, that's a lot of pressure. And it's true that there is news about the citadel and White House behind the whole Robinhood restricting GME and other stocks thingy, but nothing is confirmed yet (and it's not like they will confirm it, lol). Biden can't make all the decisions by himself. Hang Feb 8, 2021, 3:09 PM Go for Crypto 🤷‍♀️ but Utsav told me to wait, lmao Hang Feb 8, 2021, 3:10 PM Bruh, I’m too dumb to be in this game 🤣 Kien Dao Feb 8, 2021, 3:10 PM Just wait, lol. Price is too high 💸 Anw, have you watched Too Big To Fail? You will see a point: once a huge company falls (ie Melvin, pretty huge, but not failed yet), some other companies will fall like dominos. Hang Feb 8, 2021, 3:11 PM No, I haven’t, but I do understand the reverse: once a big guy does it, everyone else is following. Take Apple, for example, people ridicule them, first for removing the 3.5mm headphone jack and then for getting rid of the charging brick. But here were are not 3 months later, Samsung is following with their most recent Samsung Galaxy product release. It’s just going to be a matter of time before the other guys do it, too! Kien Dao Feb 8, 2021, 3:12 PM Aight. So long story short: back then when they let Lehman Brothers go bankrupt, leading to the almost failure of AIG (the biggest insurance company at the time) - the last time I check, it's still here, just not as thriving. That’s one side. On the other side, Lehman’s accounts went frozen, people lost their whole savings, companies lost partners (and people who lend them money). It affects other banks too - as people started withdrawing their money all at once and some banks were not liquidated enough for it. Led to a whole disaster 👀 Hang Feb 8, 2021, 3:13 PM Yes, so when the giants do something (even fail), others follow suit. Idk if my POV is correct or logical enough, and I may got laughed out as a piece of shit by Wall Street, but that’s how I look at this. I find it hilarious, btw, mostly 'cause I’m staying out and watching. It's cool to see most are like this: Hang Feb 8, 2021, 3:13 PM Cool, thanks for the great discussion! Excited to see what’s coming next though I’m not even in the game xD Kien Dao Feb 8, 2021, 3:16 PM Lol, same. Happy to discuss. However, things seem to have cooled down a bit 🤷‍♀️ Guess people are finding drama in Covid time! Hang Feb 8, 2021, 3:16 PM

Robinhood x Gamestop for Dummies - A Conversation Between 2 GenZ

I’m Andrew Levine the CEO of Koinos Group a startup financial technology company where we’re trying to build systems that prevent some of the shenanigans that we’re seeing at play so in the video below I take a big step back and try to give you a 10,000 foot view of the whole GameStop, RobinHood, WallStreetBets situation and why I think this is far from over. A Brief History of Financialized Capitalism But to understand everything that’s going on now we really need to go back to the 1970s which is when America shifted from an economy that manufactured goods that other countries bought, to an economy that financed manufacturing in other countries. This was a really fundamental change to the very nature of capitalism. It was a shift from industrialized capitalism, to financialized capitalism. America had become so wealthy that we no longer had cheap labor and other poorer countries were catching up with our manufacturing capabilities. Before the 1970s other countries needed our goods and so they also needed to get US dollars which they needed to buy those goods, but in the 1970s that dynamic flipped. After decades of manufacturing, political, and economic dominance, that created unprecedented demand for a single currency, the US dollar had become an indispensable part of the global economy. With our manufacturing capabilities on the decline, our strongest export became the dollar itself. All of the countries that were developing competing manufacturing capabilities were too small, too young, and too untrustworthy to supply a currency that everyone could trust to oil the gears of this new global capitalism. Besides, the dollar, backed by the military and economic might of the world’s first superpower, had already been playing this role for decades. Policymakers saw the writing on the wall and decided to lean in to the trend. They used our so-called exorbitant privilege to flip the script and make the US even more critical to the global economy not by trying to compete as a manufacturer, but by manufacturing more dollars and using those dollars to fund more growth outside of the United States. Enter Wall Street But this scheme would only work if all of that money came back to the US to fuel more growth here. Which is where Wall Street comes in. We had succeeded in making the dollar the lifeblood of global trade--something every country used to buy and sell goods with one another. When they made these deals their profits would be in dollars not their own currency. They could sell those dollars to get their own currency, but we didn’t want them to sell, we wanted them to reinvest those profits in America. And so it became Wall Street’s job to provide these foreign companies and nations with such attractive returns that they’d have to be idiots not to send their profits back to us so that they could make even more money. Unshackling the Bull But how was Wall Street going to deliver such massive returns? The first step was removing the regulations that were holding back financial firms from effectively printing money. Unlike the banks most of us are familiar with who can already create 9 dollars for every 1 dollar they hold, financial firms like the hedge funds we’re hearing about in the news would be able to create all kinds of exotic instruments that take some underlying asset like a mortgage or shares in a company and use that to create some new asset worth 100 times, 1,000 times more. This enabled them to generate those profits that motivated more money to flow back into the US and into their firms which they could use to create even more exotic instruments. Yes, a lot of the money coming back to the US went into our companies and our treasury bonds, but Wall Street was the vacuum pump that sucked in that money with force based on its promise of massive returns. This caused our companies to transform in a way that mirrored our currency. Their product flipped from being the goods they produced for a profit, into the shares themselves and the goods or services they offered were more about constructing a narrative that justified creating shares that Wall Street could then gamble on and use to construct their magical instruments that created money from money. This whole thing probably sounds extremely risky and prone to collapse given how everything is built on top of creating money out of thin air through financial engineering, which is precisely why we have had so many financial crises over the same period of time. These are effectively pyramid schemes and so when one gets too big it collapses and the government has resigned itself to the role of ensuring that either the schemes don’t get so big that they can take down the whole system with them or if they do get too big--too big to fail--they are bailed out. Of course, all of this gives incredible power to Wall Street while also creating perverse incentives to make their schemes so big that, when they do fail, they are protected. People often wonder why the government continues to put up with this and now that should be clear. Without Wall Street we’re just a has been superpower. China’s economy is already bigger than the US economy and it’s still growing so it’s only a matter of time before their currency becomes more valuable to the rest of the world than ours. People don’t need our produce, our oil, or our machinery. We’ve just become the world’s casino and Wall Street firms are the dealers. The Great Financial Crisis of 2008 But everything changed in 2008, even if it doesn’t seem like it. The game ended. The capacity for Wall Street to print enough money to fuel the perpetual motion machine came to an end. Policymakers saw it and said outright that they feared it was the end of capitalism. It was this fear that led them to respond with unprecedented measures. For the first time in American history the federal government had to step in and take the place of Wall Street by creating more US dollars out of thin air, though they used the more palatable term, “quantitative easing.” This money printing got the gears of financialized capitalism moving again but in a zombified manner. There was no real growth, just more money chasing every diminishing returns. It was a band-aid, not a long-term solution. Enter Crypto But another group saw what was happening too. People outside of the financial system who wanted to see a genuine fix. They saw the problem as the system itself and wanted a better one. The problem wasn’t that the system needed to be tweaked. The problem was that we, the people, had no control over it or insight into it. It was imposed on us and we had no way of understanding it or impacting it. And we had no ability to opt out of one system and into another. We wanted a system that was open, transparent and impossible to manipulate. Which is why software engineers released the first prototype of such a system in Bitcoin. Bitcoin created a digital currency that no one owned or controlled, that was open and totally transparent, and was easy to understand having properties similar to gold. But Bitcoin was just one new asset that was slow and expensive to send and receive. So Ethereum was released next and it was similar to Bitcoin, but was also a PLATFORM that anyone could use to produce all kinds of digital assets like Bitcoin but with whatever properties they wanted. While a bit faster, Ethereum was still slow, expensive, and difficult to use. It was nowhere near ready for mass adoption and so while the game of musical chairs had stopped in 2008, the economy was forced to limp along with the help of record low interest rates from the Federal Reserve. And then the pandemic hit. Many think that the pandemic caused the economic crisis, but the reality is far worse. Things had been bad since 2008 and they were rapidly deteriorating as we entered into 2020. This left us vulnerable to the virus which then became a not-so-convenient excuse for our worsening economic situation. #Gamestonks Which brings us to the current events. WallStreetBets, RobinHood, GameStop, it all seems so complicated, but it’s really not because it’s the same old story. Remember, the American economy has become the world’s casino. With the real economy shut down the government has again been forced to go into money printing mode to an even greater degree than it did in 2008 and with most of that money going into corporate shares driving up their prices which is only encouraging people to gamble even more. Meanwhile with everyone stuck at home they have nothing better to do than to play the game while Wall Street firms are doing what they’ve always done which is use some underlying asset to create even more money out of thin air. WallStreetBets, a community on Reddit, simply uncovered their latest pyramid scheme. Though it’s certainly not new it’s now become a systemic threat to the economy, which is why I said at the beginning of this video that this is far from over. This scheme involves exploiting a loophole in the regulations that actually dates back to a time when people traded paper shares which could take weeks to arrive by horse and buggy. To grease the wheels of the financial system, always a priority in a capitalist economy (whether right or wrong), a financial instrument was created that enabled people to trade shares that they didn’t own. Shorting Stonks Eventually people realized, after the fact, that this instrument could be used to effectively bet AGAINST a stock or “short” it. Remember, the original purpose of shares in a company was to simply track ownership over an organization that produced something of value. While there may be some cases where shorting a stock is justified to send a market signal that a company is bad, the problem with shorting stocks is that when people with enough money target a single company by betting against it, it becomes a self fulfilling prophecy. This creates yet another perverse incentive to an industry already rife with perverse incentives. A Wall Street firm could make a guaranteed profit by betting against a company and then CAUSING it to fail. Now GameStop might have not appeared to be a thriving company, but 97% of its stores were profitable and the people running the business were obviously aware of its challenges and trying to turn it around, but they were facing an uphill battle as a result of the massive short positions that were working against it. But even that isn’t the story. The real shocking revelation from all of this is not that Wall Street was manipulating the system to make more money by destroying a company, that’s old news right? What’s been discovered from all of this is that Wall Street firms had apparently found yet another loophole. Due to poor oversight and a lack of transparency it was apparently possible for them to bet against the company using more of the company’s shares than actually existed! It’s as simple as that! A hedge fund exploited an ancient instrument that enables it to sell shares it didn’t own, to sell more shares (that it didn’t own), than even existed! Yes, this is math that only adds up on one street, in one city, in the world; Wall Street. But should we really be surprised? Wall Street firms are, after all, masters at creating money from nothing. So now the picture should be clearer. RobinHood is in a precarious position. It sees itself as an empowering platform but it is only empowering more people to play in the casino with the same old dealers. How Deep is the Rot? We don’t know how many firms are doing this and to what extent. Given Wall Street’s track record we can’t assume that having been given a blank check book they haven’t written countless checks. Precisely the opposite. And this is why this story seems to never end. We have no idea how deep the rot goes. If deep enough, that rot could collapse the very foundation of an economy that was already weak before getting hit by a pandemic that is still ravaging us. This financial system is clearly not working and whether it’s now or later, the house of cards will crumble. The question is whether we will have anything there to replace it. As I mentioned before, projects like Bitcoin and Ethereum, technologies like blockchain and smart contracts, were leaps in the right direction, but they haven’t been able to break into the mainstream because they are too slow, too difficult to use, and because they charge people fees for every little thing they do. Enter Koinos We’re building Koinos to solve those problems. It will be open, transparent, and decentralized like Bitcoin and Ethereum, but it will also be fast, easy to use, and most importantly, it will have no fees. We believe this is the key to building financial systems that spread wealth, instead of creating poverty. Establishing regulatory bodies and institutions that are open instead of closed, and build systems that are transparent instead of secretive. Despite the current circumstances, we are optimists who see a better future ahead of us that is bottom-up and people-powered instead of top-down with all the power concentrated in the hands of a small number of people working behind closed. In other words, a more decentralized future. We hope you’ll join us in our effort to turn that vision into reality. Also published on Peakd .

The 10,000 Foot View of WallStreetBets, Gamestop, Robinhood and Crypto

The recent battle was a classic David vs. Goliath story that pitted the old against the new. The video game retailer’s stock price shot up nearly 2000% in a fierce battle between retail investors and overexposed hedge funds. Gamestop (GME) vs. Wall Street Just a year ago, GME was stagnant and trading under $4 as the company struggled to find footing in a shift to online prominence. Fast forward a year and the stock had increased to a high of $470. This was not a result of great management or financial performance, but rather an ambitious and dedicated group of Reddit users who worked together to catapult the price in a successful short squeeze against a hedge fund called Melvin Capital. This sparked a collective effort to find and exploit hedge funds with large shorts on struggling companies. A global news frenzy ensued, with people joining forces to support the movement from the comfort of their homes using various mobile trading applications. The hype has since subdued but the clinging effects of this event include a continued discussion around the power of hedge funds and various collaborative entities, regulation, and what appears to be the into what happened. beginning of an investigation How did this all start? In short, Gamestop shares surged as a result of a subreddit called , where degens and talented traders collide to drop alpha and place bets on stocks. Over the past few months, a smaller group of WallStreetBets members believed that GameStop's stock was undervalued, largely due to a massive options bet in 2019 by one user who was later as a prominent Youtube financial educator and trader. r/wallstreetbets doxed During this squeeze, the rally of retail investors grew and demand for the stock was through the roof. Right as critical mass and support were building, several mobile apps begin interfering with user trades. Several trading platforms such as WeBull, Apex Holdings, and most prominently Robinhood refused to allow more buying of GameStop shares. WeBull highlighted that the market is characterized by extreme volatility and its clearing house was unable to process more orders. As a result, the users of WeBull were forced to liquidate or sell GME and other stocks with short squeeze potential. Robinhood also cited extreme volatility. Trading in GameStop shares was stopped, preventing retail investors from buying more shares. There was immense pressure on circuit breakers and trading platforms to restrict trades. This paved the way for people calling for the need for more censorship-resistant trading and decentralization in its best form.  The event also saw massive support from top influencers, thinkers, and media personalities.  Chamath Palihapitiya, CEO of Social Capital and popular influencer, : tweeted Dave Portnoy, Founder of Barstool Sports and popular crusader against Wall Street, strongly against Robinhood and demanded that they get punished for the crime. came out Making a Strong Case for DeFi A fundamental shift from centralized exchanges and apps (that can essentially control your money without your permission) to decentralized solutions is currently underway. In the context of the cryptocurrency markets, a centralized exchange like Coinbase has a closed order book that is managed by a central system. They use their own servers to take care of the trades meaning that the company alone takes decisions on several critical factors such as suspending trades on certain listings and other events that can be detrimental to their user base. In the world of equities, Robinhood benefits from its relationship with Citadel Securities and other large liquidity providers, funds, and partners. In return for access to order data, Robinhood sold roughly $69 million worth of user Information in 2018 to firms like Citadel Securities. One could argue their interests are not in their users (who can use the app for free) but in the profit potential their user data brings. Decentralized finance (DeFi) brings the transparency and security of distributed ledger technologies to traditional finance use cases while reducing inefficiencies and solving pain points. Similar to migrating financial processes from the physical realm to the digital realm, DeFi intended to migrate from current infrastructures to more robust, secure, and efficient systems. Open-sourced smart contracts allow for an immutable ledger backed by consensus mechanisms. Hence decentralized technologies can easily transfer the burden of trust from a centralized authority to software. The ability to automate the creation and settlement of agreements using smart contracts provides a secure and reliable basis to access financial services for the underbanked and unbanked populations. With decentralization also comes great transparency. Distributed ledger technology (DLT) contains records of all blockchain network activity and is shared by everyone. This is a major game-changer and ultimately is more secure, robust, and efficient vs. legacy systems. With the smart use of consensus algorithms and cryptography, like Proof-of-Work, one can achieve true immutability. This makes manipulating records stored on the blockchain network impossible. How DAO’s Help Provide Transparency and Control The main feature of Decentralized Autonomous Organizations (DAOs) is that their operating rules are automatically hardcoded. These rules are enforced when the conditions specified in the software are met in stark contrast to traditional norms. In the case of DAOs, funds are immediately transferred upon result of a contract's approval. Not even influential internal stakeholders and third parties like banks can then stop it. Everyone has a stake in a DAO can make proposals regarding its future. Stakeholders vote on various proposals and proposals are determined based on the opinion of the majority. Currently in the blockchain industry, DAOs are as various applications and products realize the importance of governance within their platforms. In fact, since 2019, the number of active DAOs have . In 2020, we saw the rise of DeFi DAOs including oracles ( and ), staking derivatives platforms (OINDAO), and other notable names like . gaining momentum increased by 660% DIA Data API3 Curve DAO In the case of , its blockchain systems offer convenient and robust solutions to create DeFi functions. allows projects to mint their own stablecoins with the help of a customization staking pool. This way users can swap their hot coins in order to accumulate more and surge their holdings. Users can leverage their holdings, use it for many use cases, earn rewards, and much more. With such progressive DAO solutions onboard, OIN Finance and OINDAO are a good example of what v2 DOAs look like in 2021's Defi landscape. OIN Finance OINDAO Conclusion While the debate for decentralization is still ongoing, the recent turn of events has driven people away from centralized platforms towards a more trustless and decentralized future in trading. The people have spoken and they want more control over their money and how it is used.

Following the Robinhood Saga, the Demand for Decentralization Has Never Been Higher

What is currently happening on the financial markets is historic: a mass of small investors is bringing billion-dollar hedge funds to their knees, which normally profit from the losses of such retail investors. In the process, many of them used the popular trading app Robinhood, until it suspended buying stocks but allowed selling to continue - thus protecting the hedge funds. A clear case of market manipulation. In this article, we therefore want to present the top 3 Robinhood alternatives, which have proven to be unbiased and allow you to invest safely, free from manipulation. 1. Cake DeFi The truth is: Even though Robinhood voluntarily suspended stock trading of GameStop, AMC & Co. for an indefinite period of time, traditional investment platforms are often forced to temporarily restrict certain stocks in times of extremely high volatility. Even the popular platforms eToro, WeBull & Trade Republic had to suspend trading for a short period of time. For example, US President Joe Biden's economic team says it is closely monitoring the situation, and the head of the largest US stock exchange Nasdaq, Adena Friedman, said that regulators should monitor social media for similar situations in the future: , Friedman told CNBC. "If we see a significant rise in the chatter on social media channels...and we also match that up against unusual trading activity, we will potentially halt that stock to allow ourselves to investigate the situation" Internationally known personalities such as PayPal and Tesla founder Elon Musk or YouTuber MrBeast (with over 50 million subscribers worldwide), spoke out in favor of the cryptocurrency Bitcoin in response to the events. Elon Musk even tweeted: "In retrospect, it was inevitable". ( Disclaimer : The author is a co-Founder at Cake DeFi) The simple reason being that cryptocurrencies like Bitcoin are completely decentralized and therefore unregulatable. So even if a central party like Nasdaq or a government wanted to, it could not stop Bitcoin. More and more investors are recognizing this advantage, and so the price of Bitcoin has already been rising steadily for months. Cake DeFi is a platform that allows to buy Bitcoin - with a major benefit: So instead of having your Bitcoin lying around and hoping for the price to rise, you get passive income on your investment, just like with real estate or stocks! interest payouts of up to 7.5% on the cryptocurrency. As if that wasn't enough, Cake DeFi plans to offer decentralized stock trading by the second quarter of this year - a truly manipulation-free and unregulated alternative to the trading app Robinhood. Click Here to register for Cake DeFi and receive $20 USD free when you make your first deposit of $50 USD or more. 2. WeBull One app that has received has seen a lot of traction since the Robinhood manipulation is WeBull. Like Robinhood, they offer commission-free stock trading in a simple and intuitive user interface. The company also made negative headlines when they briefly suspended GameStop stock trading some time after Robinhood. However, the CEO promptly justified this, explicitly pointing out that it was not a supposed protection of users or hedge funds - during times of enormous volatility, it simply becomes very costly for the clearing firm to settle a trade. Too costly. And regulations would prevent WeBull from passing costs on to users instead. By now, trading GameStop, AMC & Co. is possible again without restriction on the platform - you can register for WeBull here. 3. TradeStation One of the few platforms that didn't stop trading of the highly volatile stocks like GameStop, AMC & Co. at all is TradeStation. In a tweet they explain, "At TradeStation, you can buy GME and AMC stock and close positions you own. There are restrictions on short sales and new option positions. Our policy may change with market conditions." So while buying and selling is fully functional, short selling and stock options are currently restricted. Unlike Robinhood or Webull, however, TradeStation has a minimum deposit amount: $2000 US dollars. So it's a hurdle for the very small investors, but it's still set relatively low compared to many other platforms. Click Here to register for TradeStation. Conclusion There are definitely platforms that have reacted more accommodatingly to the current speculation around GameStop and other highly volatile stocks. However, the fundamental problem that centralized platforms regulated by the stock exchange commission can manipulate the market at any time - and in some cases even have no choice - remains. The only real solution is to bring decentralization to the system - so that there is no single party that can manipulate and self-regulate the market. Decentralized cryptocurrencies like Bitcoin and platforms built around them like Cake DeFi thus provide what Robinhood promised but failed to deliver: the democratization of the financial market. So click here to sign up for Cake DeFi today and start receiving interest payouts on Bitcoin - and even profit from decentralized stocks very soon! ( Disclaimer : The author is a co-Founder at Cake DeFi)

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