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ROBINHOOD PLANS SELF-CUSTODY WALLET WITH NO FEES

 


Self-custody wallet with no fees

Robinhood has grown in popularity throughout the pandemic. Due to various restrictions on the population by many governments and the prospect of enormously high inflation (as they have now come into force), many people have found their way to investment assets such as stocks or cryptos.


This has propelled Robinhood to rapid rise , but has been followed by a rapid decline. Currently, HOOD, the Robinhood stock, is 88% off its all-time high set in August of last year.


The app currently offers its users to buy assets such as stocks, ETFs, options, and cryptocurrencies. All of these investment opportunities are managed by Robinhood.


Especially in the crypto sector, wallets that cannot be managed themselves are heavily criticized, since Satoshi's original idea was to create a decentralized, independent and secure peer-to-peer means of payment.


However, a user can only be independent if he keeps his private key himself. This is then referred to as a self-custody wallet. So far, Robinhood has not offered such a type of cryptocurrency custody.


Self-custody wallet with no fees

No transaction fees

According to an announcement, the developers are now even going one step further. A self-custody wallet is planned, with no transaction fees. With today's transaction fees, which can easily rise to $100 at Ethereum , this is an enormous advantage for users.


However, this coin also has two sides. In this case, what promises to be a benefit for users means a burden for Robinhood. Since users have their own wallet, the coins on it must also be sent accordingly and not, as is usual with some exchanges, simply keep the same coins in the "exchange pool" and only change the portfolio amount on the dashboard.


This raises the question of who will bear these transaction costs. Robinhood's crypto CTO, Johann Kerbrat, commented on this. Anyone expecting a detailed explanation here is far from it. A sparse response explained that Robinhood is relying on third-party providers for this matter, who will offset these network fees. Why and why the external liquidity providers should do this remains unclear.


A spokesman explains:


There are multiple solutions to achieve this vision and we look forward to showing everyone how we will do it.

The focus of the self-custody wallet without fees should be an optimal user interface. Since the user's risk of having to accept losses due to a mistake increases with the self-custody of the private key and thus full control over their own portfolio, the design and the user interface should be designed in such a way that even every crypto newbie can find their way around the app at any time .


In addition, Robinhood offers additional services with the new app. This should enable users to access NFT marketplaces and save NFTs on their wallet. In addition, the self-custody wallet should be able to connect to decentralized exchanges in order to be able to use DeFi services.


The wallet is scheduled to appear later this year. A waiting list has been opened in which users can sign up to be among the first test subjects who can use the self-custody wallet.


Vlad Tenec, CEO of Robinhood states:


Offering the low cost and great design that people have come to expect from Robinhood, our web3 wallet will make it easier for anyone to own their own private key and take advantage of all the opportunities the free financial system has to offer.

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