tl;dr
Robinhood is developing an Ethereum layer-2 scaling network to trade tokenized assets like stocks, aiming to reduce liquidity fragmentation and improve the financial ecosystem. The platform will launch initially in the EU and expand globally after regulatory approval, focusing on interoperability. C...
Robinhood is making its biggest bet on crypto yet by developing an Ethereum layer-2 scaling network aimed at trading digital representations of assets, such as stocks. This move enters a competitive field where similar products already exist on networks like Solana. Johann Kerbrat, Robinhood's crypto general manager, expresses frustration with the proliferation of tokenized stocks across multiple networks, arguing that it fragments liquidity and undermines the benefits of tokenization. He criticizes the creation of different tokens for the same stock on separate platforms, which splits market activity rather than consolidating it to improve the financial ecosystem.
Robinhood’s initiative represents a strategic push to differentiate itself by building an Ethereum-compatible network inspired by Arbitrum’s design. The goal is to cast a wide net for tokenized assets and enhance connectivity with other players in the crypto sphere. Initially launching in the European Union, Robinhood aims to expand availability globally once it obtains regulatory clarity, emphasizing maximum participation and interoperability with other projects.
Meanwhile, competitors like Kraken and Bybit have introduced tokenized stock trading on Solana through Backed Finance’s xStocks platform. This highlights how different firms are leveraging varied blockchain standards to modernize the financial system. Despite Kraken’s release of Ink, an Ethereum layer-2 network last year, it has yet to be utilized, raising questions about the strategic direction of some exchanges. Kerbrat contrasts his company’s approach with those launching multiple projects for headlines, stating Robinhood focuses on actual product use.
Kraken’s participation in the xStocks Alliance—a coalition setting standards for on-chain assets—reflects an effort to minimize liquidity fragmentation across token standards and blockchains. Kraken aims to make xStocks the global standard for tokenized equities, emphasizing access and empowerment over brand promotion. Solana’s speed and ecosystem made it the natural launchpad for xStocks, but Kraken plans to extend support to other blockchains, with Ink playing a key role in its roadmap.
As Kraken expands xStocks across various chains, Robinhood moves forward with its own Ethereum layer-2 network, targeting broad appeal among developers and investors alike. This emerging competition among crypto trading platforms underscores the evolving race to build more efficient, scalable, and user-friendly systems for digital asset trading, reshaping the landscape of tokenized equities.