Robinhood’s plan to tokenize stocks in the new Blockchain Ethereum Ethereum can shift trading volume away from traditional exchanges such as NYSE, which overthrows their basic revenue from trading bills and market data, according to Galaxy Digital.
At this week’s ETHCC conference, Robinhood CEO Vlad Tenev Detailed plans for “Robinhood’s chain,” a compatible with Ethereum Layer-2 in the orbit arbitrator. Blockchain will allow users to exchange tokenized derivatives of stocks directly to Onchain, moving asset trade out of traditional exchange time.
Tenev explained that a new token engine operating in the Robinhood chain will provide users Tokenized derivatives of their possessions.
Through the “wrappers” main token that is linked to the true stock custodied by a US broker-dealer, Robinhood will offer users close to settlement and 24/5 trade in the first, with a 24/7 planned trading. The initiative uses Robinhood’s Recent Crypto Exchange Bitstamp.
Related: SEC ends ‘regulation by implementation,’ call to tokenization ‘change’
Robinhood tokenization brings onchain assets
In a Friday report, Galaxy Digital Says Robinhood’s tokenization transferred property from traditional market channels and brings them onchain, directly challenging concentrated liquidity and activity that provides major trafi exchanges such as NYSE on their side.
“It directly challenges the in -depth concentration of liquidity and activity that provides major exchanges of Tradfi (for example, NYSE) to their competitive advantage,” wrote Galaxy Digital.
The architectural models of the rollup models such as the base of the coinbase, which provides the Robinhood’s complete control of its sequencer and the ability to obtain all transaction fees. The Galaxy Base estimates that make up more than $ 150,000 in the day -to -day fees for Coinbase.
By running the sequencer for the Robinhood chain while controlling tokenized assets, Robinhood aims to make every layer of trading stack – from “Offchain Trading to Onchain Utility,” the report said.
Notably, the appeal of tokenized assets extends beyond 24/7 trading. Programmability may allow utensils such as the use of tokenized stocks as collateral in the defi protocol or automating dividends, features that cannot match traditional equality.
As Galaxy noted, if incumbent exchanges cannot match the utility of tokenized assets, they risk being “custodians of a less functional version of the same properties,” which drives more businessmen on blockchain-based platforms.
Related: ‘Everything is lining’ – the tokenization is having a breakout moment
Dangers of volatility remain
However, the 24 -hour trade model can introduce volatility risks for retail investors, which may wake up to sharp price movements out of regular time.
Moreover, the uncertainty of regulation remains a challenge. While Robinhood tokens are only available to EU users, the US Securities and Exchange Commission (SEC) has not commented on the model in the model.
The Securities Industry and Financial Markets Association (SIFMA) already have DUNIKOKOK The SEC to deny the trading of tokenized equities outside the NMS framework regulation.
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