From Retail Investor Platform to Financial Infrastructure Disruptor: Robinhood's Strategic Transformation and Future Layout

On June 30, 2025, Robinhood's stock price surged over 12% during intraday trading, hitting an all-time high. This wave of growth stemmed from a series of major announcements made at Cannes: the launch of stock tokenization products, the establishment of a Layer 2 blockchain based on Arbitrum, and the provision of perpetual contracts for EU users. This marks a fundamental shift in the market's perception of Robinhood — it is no longer just a retail investor trading platform for young people, but is attempting to become a potential disruptor of financial infrastructure.

This article will analyze the evolution of Robinhood's business model, core strategic logic, and its potential impact on the industry market from three dimensions: past, present, and future.

1. The Past: Rapid Growth and Transformational Growing Pains from "Zero Commission" to "Diversification"

1. Original intention of entrepreneurship and user positioning

Robinhood was founded by two Stanford University graduates with backgrounds in physics and mathematics, Baiju Bhatt and Vladimir Tenev. Their original intention was "financial democratization," aiming to provide ordinary people with the same investment opportunities as institutions. This concept resonated with the millennial generation's distrust of big banks following the 2008 financial crisis.

They seized the wave of mobile internet and launched an App specifically designed for mobile devices in 2014, with two major disruptive innovations:

• Zero-commission trading: Breaking the traditional brokerage fee model, significantly lowering the investment threshold.
• Ultimate user experience: A simple and even "addictive" interface design gamifies complex financial transactions, attracting a large number of young people with no investment experience.

2. Establishment of Core Business Model

Behind Robinhood's "zero commission" is a carefully constructed diversified revenue model, the most representative of which is PFOF( payment for order flow ).

PFOF is the cornerstone of Robinhood's "zero commission" model. In short, Robinhood packages user orders and sells them to high-frequency trading market makers, who earn profits through the bid-ask spread and pay a portion back to Robinhood as a reward. This model generates substantial revenue but has also sparked long-term regulatory controversies.

Based on PFOF, Robinhood continues to expand its business landscape, building three main revenue pillars:

• Trading business: expanded from initial stock trading to options and cryptocurrencies.
• Interest income: Transforming users' idle funds and leverage needs into stable income through margin loans and cash management services.
• Subscription Service: Launching the Robinhood Gold subscription service, offering added features.

3. Growing Pains: Crisis and Reflection

Robinhood's rapid growth has been accompanied by a series of crisis events:

• Technical and risk control crisis: In March 2020, the platform experienced a full-day outage, leading to a collective lawsuit by users.
• GME Incident and Trust Crisis: In early 2021, during the GameStop incident, restricting users from buying popular stocks was criticized as "betraying retail investors".
• Ongoing regulatory pressure: From FINRA fines to SEC investigations, regulation has always been a significant challenge they face.

These crises have exposed Robinhood's Achilles' heel: the instability of its technology platform, flaws in its risk control mechanisms, and the potential conflicts between its business model and user interests. These profound lessons compel Robinhood to seek new directions for growth in order to restore market trust.

II. Now: All in Crypto - Robinhood's Strategic Ambitions and Business Logic

1. Core of Strategic Shift: Why Choose RWA and Tokenization of Stocks?

Robinhood bets on RWA( Real World Assets, real-world assets) and cryptocurrency technology for the following considerations:

Financial Drive: The crypto business has become its highest-margin business. In the first quarter of 2025, crypto trading contributed $252 million in revenue, accounting for 43% of total trading revenue, surpassing options for the first time as the largest source of trading income.

Narrative Upgrade: This move helps Robinhood transition from a controversial "retail investor brokerage" to a "bridge connecting traditional finance and the on-chain world", effectively shedding the shadow of PFOF regulation and the "Meme stock" label.

Core objective: to disrupt traditional financial infrastructure. Robinhood believes that blockchain technology can achieve:

• 24/7 round-the-clock trading
• Near-instant settlement
• Ownership is infinitely divisible
• Enhance liquidity
• Automated Compliance

2. "Trinity" strategic combination punch

To achieve the above goals, Robinhood has launched a "trinity" strategic combination:

Stock Token (: Launching US stock tokens in the EU market for market education and technical validation.

Self-built L2 public chain ) Robinhood Chain (: A Layer 2 public chain optimized for RWA built on the Arbitrum Orbit technology stack, transitioning from "application" to "infrastructure provider".

Platformization ) Broker-as-a-Platform (: Building a "crypto-driven all-in-one investment platform" that covers the entire lifecycle of users through a series of acquisitions and product releases.

) 3. Competitive Landscape Analysis

Compared to Coinbase:

• Path difference: Coinbase is a "on-chain exchange", while Robinhood is an "on-chain broker".
• Advantages Comparison: Coinbase's advantage lies in its foundation in the crypto industry and its institutional client base, while Robinhood's advantage lies in its retail user base and more focused RWA strategy.

Compared to traditional brokers:

• Mode differences: Traditional brokers mainly serve high-net-worth and institutional clients, while Robinhood serves younger and more active retail investors.
• Data comparison: Robinhood has approached mainstream brokers in terms of account numbers, but there is still a huge gap in average assets per account. In terms of the growth rate of trading income, Robinhood has far surpassed traditional brokers.

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III. The Future: The "First Gateway" to Reshaping the Financial Order? Opportunities and Risks Coexist

) 1. Potential impact on the financial market landscape

• Squeeze the liquidity of altcoins: Retail investors may prefer to trade blue-chip tokens with real value support on compliant and convenient platforms.
• Reshaping stock trading rules: 24/7 trading will break the limitations of traditional exchanges, impacting global liquidity distribution and price discovery mechanisms.
• Accelerate the entry of traditional financial giants: Robinhood's layout will force traditional financial institutions to accelerate their layout in the asset tokenization field.

2. The Opportunities and Valuation Reconstruction of Robinhood

If the strategy succeeds, Robinhood is expected to become the "first entry point" for RWA, capturing the dual dividends of "intergenerational wealth transfer" and "cryptotechnology popularization." Its valuation logic will also undergo a qualitative change, transforming from a simple brokerage into a composite company with attributes of SaaS, fintech, and infrastructure.

3. Inescapable risks and challenges

Robinhood still faces three core challenges:

• Regulatory uncertainty: Issues such as how to define the legal attributes of RWA tokens and meet digital asset custody rules remain to be resolved.
• Execution and competition risks: Plans such as building a public chain, integration and acquisition, and global expansion test its execution ability, while also needing to contend with competition from native crypto rivals and traditional financial giants.
• Inherent vulnerability of the business model: In the short term, the revenue structure still heavily relies on the highly volatile trading business, particularly in cryptocurrencies.

Overall, Robinhood is trying to reconstruct itself through RWA and crypto technology, moving from the margins of the financial system to the center, becoming a "designer of institutions" and "provider of infrastructure" at the intersection of the old and new financial order. The success or failure of this transformation not only concerns Robinhood's own fate but will also profoundly influence the evolution path of global financial markets in the next decade.

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