Robinhood Launches Public Testnet for Ethereum Layer-2 Network
On Tuesday, Robinhood announced the initiation of a public testnet for its Ethereum layer-2 network, designed to enable developers to explore various applications within this new environment. This strategic move is part of Robinhood’s broader ambition to integrate decentralized finance (DeFi) tools into its existing brokerage services, as outlined in a press release.
Focus on Compatibility and Blockchain Integration
According to Johann Kerbrat, the senior vice president and general manager at Robinhood Crypto, the firm is particularly focused on the compatibility of stock tokens with traditional financial systems. He explained that Robinhood is not merely interested in scalability through another layer-2 solution; rather, they aim to leverage underlying blockchain technology to fundamentally reconstruct some of their systems.
Expanding Offerings in the Competitive Crypto Landscape
Historically, layer-2 solutions have been seen primarily as methods to enhance the efficiency of the Ethereum network. However, Robinhood is using this approach to broaden its offerings and strategically position itself within the competitive crypto landscape. The testnet is intended for developers with experience in creating products such as perpetual futures exchanges and lending platforms, as well as institutional players who may want to utilize Robinhood’s framework for their own products.
This initiative follows the rollout of stock tokens eight months ago, which allowed European customers to gain synthetic exposure to U.S. stocks and private companies. Kerbrat emphasized the company’s desire to expand this tokenized asset service to more international markets. Currently, U.S. investors face restrictions concerning access to tokenized real-world assets, as the Securities and Exchange Commission (SEC) is in the process of formulating guidelines for such digital representations. Other exchanges, like Coinbase, are also in a race to introduce similar offerings.
“We are going to be pretty careful about the rollouts,” Kerbrat noted. He highlighted the importance of the testnet phase as a pivotal element in the company’s larger objective of enabling continuous trading, where crypto plays an essential role. “We’re employing Robinhood Chain for trading stock tokens, which aligns with what we are doing in the U.S.,” he mentioned, reaffirming their commitment to expanding beyond just cryptocurrency trading.
Unique Approach to Layer-2 Development
While competing platforms like Coinbase and Kraken are utilizing a tech stack provided by OP Labs to develop their layer-2 networks, Robinhood has opted for a different route. They are constructing their network based on the Arbitrum framework created by Offchain Labs, which emphasizes developer accessibility. Steven Goldfeder, co-founder and CEO of Offchain Labs, expressed confidence in Robinhood Chain’s potential to contribute significantly to the evolution of tokenization within the industry.
