Robinhood plans to launch DeFi wallet rivaling Metamask

Trading firm Robinhood plans to roll out a new crypto wallet focused on decentralized finance (DeFi) by the end of 2022. The new custodial wallet will cater to “advanced” crypto users and live separately from the existing wallet, the firm’s Johann Kerbrat said.

On May 17, Vlad Tenev, Robinhood CEO, announced the “Web3 crypto wallet” at the Permissionless conference in Palm Beach, Florida. This move follows last month’s launch of a more tightly controlled crypto wallet, which was basically a halfway house for users moving tokens in and out of their Robinhood brokerage accounts.

Users of the entirely separate Web3 wallet will be able to lend, stake, yield farm and even buy NFTs – much as they might with a MetaMask wallet. Those capabilities do not exist in Robinhood’s earlier wallet.

Robinhood’s upcoming wallet – it begins testing in the summer, with a waitlist now open – is slated for direct competition with Coinbase’s own offering, with expanded features announced Monday. Both investing giants are making it easier for their crypto-trading customers to actually deploy assets into DeFi without leaving their wallet ecosystems. Doing so could end up goosing DeFi protocols with a raft of new users.

Unlike Coinbase’s Web3 wallet, Robinhood’s is not integrated. Robinhood Crypto CTO Johann Kerbrat said the new wallet will specifically cater to users who seek “advanced use cases” of crypto.

“We see this new product as a kind of brother for Web3,” Kerbrat told CoinDesk prior to Tenev’s keynote. He said the team is “building this product as effectively a browser.”

The wallet will allow users to purchase and store NFTs, earn yield on assets, and access a host of tokens not currently available on Robinhood.

“We want to give users the last piece missing to access the Web3 space,” Kerbrat claimed.

Another bonus: the firm plans to cover gas fees, which during certain periods of activity can make swapping coins prohibitively expense.

To eat the gas fees, the firm will take a page out of its equity playbook, relying on third party liquidity providers to receive the best price on a given swap. Robinhood does not plan to take a cut of the profits as it is focusing on product market fit for the product in the short-term.

“We’re making it not scary, easy to use,” Johann Kerbrat told The Block.

The move illustrates a broader trend of firms in the centralized crypto market launching products in DeFi. Coinbase announced early this week its own service that would allow clients to tap decentralized apps via its app.

Robinhood – which has come under fire for opening unsophisticated traders to complex financial instruments like options – said it will focus on educational materials to equip users as they dabble in DeFi.

“We will give you access to everything, but we will show you warnings on things that are risky. But at the end of the day we are not making decisions for you.”