Compiled edited by TechFlow
Guest: Steven Goldfeder, Founder and CEO of Offchain Labs
Moderator: Laura Shin
Podcast source: Unchained
Original title: Why the Arbitrum Stack Won in the Race to Support Robinhood Chain
Air date: July 4, 2025
Summary of key points
Offchain Labs CEO Steven Goldfeder explains why Robinhood chose Arbitrum to rebuild the crypto infrastructure for its core product, the potential that on-chain equity tokenization could bring, and why we may be re-entering the “zero to one” phase in crypto.
Offchain Labs co-founder Steven Goldfeder shared on Unchained why Robinhood chose to rebuild its product based on the Arbitrum technology stack, what it means for the evolution of crypto technology, and how this move will ultimately connect Web2 and Web3.
Summary of highlights
There are several very strong reasons for Robinhood to choose to launch its own blockchain, and one of the key points is MEV capture. Both MEV capture and fee capture are unique advantages brought by launching your own blockchain.
Whether it is on Arbitrum One or on Robinhood’s own chain for tokenized stock issuance, this is the “ultimate prize” we are really looking forward to. This is not just a matter of “launching another asset on the chain”, but deeply integrating blockchain technology with the existing Web 2 infrastructure.
Tokenizing stocks and introducing them to the blockchain market is indeed a brand new innovation. We need to deeply understand how to connect the dynamic relationship between the traditional financial system and the blockchain. This is indeed a challenge, but it should not hold us back.
Cryptography will be at the heart of the next financial revolution. We can’t stay in the past. Blockchain and cryptocurrency will become the financial infrastructure of the future, and everyone will eventually adapt and move in this direction.
The technical problem of liquidity fragmentation only accounts for 10%, and the real core is 90% of the user experience (UX) and wallet support issues. Even if there are complex protocols, if the wallet cannot simplify user operations and allow users to experience a unified environment, these technical innovations will not really work.
Blockchain will be integrated into our financial system and become part of it. I believe that as time goes by, it will become more and more obvious that blockchain will play a vital role.
As blockchain technology becomes mainstream and widely accepted, institutions will realize that building on blockchain can not only provide better services to users, but also reduce costs and increase profitability. This is a win-win choice.
It is important to give users the option of self-sovereignty, which means that users can transfer their assets to their own wallets at any time or choose other custody methods.
If you think the future of the crypto industry is just what we saw a week ago, then you might think there is no need to develop L2. But in fact, the development of the industry requires greater capacity. The development plan of L2 is the only path that can meet future needs.
Through the L2 development roadmap, we are able to move from a single L1 platform to a more decentralized and efficient L2 ecosystem. Although this process is not easy, once the interoperability problem is solved, we can achieve long-term sustainable development.
Why Robinhood chose Arbitrum, and how much control they actually have
Laura:
Welcome to Unchained for July 4, 2025. Todays guest is Steven Goldfetter, co-founder and CEO of Off Chain Labs. Steven, great to have you on the show.
The big news recently was that Robinhood announced the launch of perpetual contracts, tokenized stocks, and their own blockchain. This shows that not only is the crypto industry pushing users to go on-chain, but other fields are also beginning to realize the potential of blockchain technology and gradually adopt it. Robinhood initially chose to launch on Arbitrum 1, while building its own chain using the Arbitrum technology stack, which is an important milestone for Arbitrum. There are rumors that Robinhood may have initially considered Solana, but ultimately chose Arbitrum. So, Steven, can you share the main reasons why Robinhood made this decision?
Steven:
Robinhood’s choice was based on two key factors. The first was the maturity and security of Arbitrum’s technology stack. Our technology has been running stably in production environments for many years and is able to support the needs of companies of Robinhood’s size.
The second is flexibility. Robinhood initially launched tokenized stocks and ETFs on Arbitrum 1, while announcing that it would migrate to its own Arbitrum chain, the Robinhood Chain, in the future. Arbitrum is the only ecosystem that has both a trusted neutral blockchain (such as Arbitrum 1) and a top-tier blockchain technology stack. This combination allows Robinhood to launch quickly while easily expanding to its own chain as demand grows without making major adjustments to the existing architecture.
Laura:
One of the attractions of the Arbitrum technology stack is that it allows enterprises to highly customize it to their needs. Can you elaborate on the customization options that Arbitrum Orbit offers?
Steven:
Of course. Customization is mainly divided into two categories: basic customization and advanced customization. Basic customization includes options that we directly support, such as customization of gas tokens. Arbitrum 1 uses Ethereum as a gas token by default, but users can choose to use stablecoins or their own tokens as gas tokens. In addition, different solutions can also be selected for the data availability layer, such as Celestia.
Likewise, for data availability layers, Arbitrum 1 uses Ethereum, which is the most secure data availability layer, but we also support Celestia and many other data availability layers that are being launched.
These are basically two examples of customization that you can get out of the box. There are some deeper customizations like block times, Arbitrum 1 has a block time of 250ms, but some chains like Ray run at 100ms and the technology is actually stable enough to support that. These are just the parameters you can set.
Then theres what I call deeper customization where you actually need to go into the backend and change things yourself, in ways that may not be supported, but youre free to try.
For example, chains like Phoenix are building privacy directly into the Arbitrum tech stack. Theyre using fully homomorphic encryption in this case to add privacy. There are also chains like Plume and Kaito that are adding institutional KYC controls to the chain level itself. So you have an environment where everyone is compliantly checked when they come in. These are some examples.
Additionally, there are communities that enforce royalty fees, and if you want to transfer specific assets on-chain, there will be mandatory requirements. Many different customizations, but all use the core of Arbitrum technology.
How Arbitrum Stylus can provide a better user experience for Robinhood and other platforms
Laura:
Among Arbitrums technological advantages, there is another product worth noting - Arbitrum Stylus. Can you tell us about its functions and what problems it solves that companies may encounter when using Arbitrum technology?
Steven:
Arbitrum Stylus is an innovative product we launched last September. It is very unique in the blockchain space and there are currently no similar solutions in other ecosystems. The main feature of Stylus is that it allows developers to use traditional programming languages such as Rust and C++ on Arbitrum 1, rather than just being limited to Solidity. This is very practical for developers, especially in scenarios that require high-performance computing, such as verifying new signature schemes or zero-knowledge proofs. Rust and C++ are generally more efficient than Solidity, so developers can directly introduce code in these languages on the chain to write smart contracts.
In addition, for complex computing tasks such as AI reasoning, the performance advantage of Stylus is very obvious. According to our benchmark tests, using Stylus for computing can usually achieve more than 10 times performance improvement while significantly reducing costs.
Another significant advantage of Stylus is its flexibility. Traditional blockchain development usually requires developers to choose between the EVM chain and the Rust chain in advance, and this choice will affect subsequent development work. On Arbitrum and any chain that supports Stylus, developers can use EVM and other languages at the same time and freely choose the most suitable tools. In addition, contracts written in different languages can interact seamlessly, and developers don’t even need to know what language a contract is written in. For example, an application can be written primarily in Solidity, but certain complex parts can be rewritten in Rust to improve efficiency.
Its really important to us that these tools are seamlessly integrated for our developers. When it comes to the convergence of Web 2 and Web 3, Web 2 developers often prefer these other languages. So we want to have a single environment that appeals to EVM developers who like Solidity, but also to Web 2 developers who have years of experience in languages like Rust, C, or C++ who can now leverage those languages directly in their blockchain applications.
Laura:
I imagine that companies like Robinhood, which have a lot of legacy code, could significantly simplify their systems if they could easily integrate into a blockchain technology stack. Thats part of the appeal of Stylus, right?
Steven:
While I can’t fully represent Robinhood in describing their specific technical implementation, it is certain that they are very interested in Stylus and consider it an important breakthrough. Not only that, Stylus also provides a powerful tool for other developers to attract them to build applications on the Robinhood chain. If Robinhood positions this chain as the leading platform for physical asset tokenization (RWAs), many traditional brokerage firms may consider migrating to this chain, which often have years of legacy code accumulated. The compatibility and flexibility of Stylus makes this migration much simpler, and also brings more possibilities to the entire ecosystem.
Why liquidity fragmentation remains a major unsolved problem
Laura:
Do you think Arbitrum Stylus can help solve the long-standing problem of liquidity fragmentation? Liquidity fragmentation has been an unresolved problem in decentralized finance (DeFi). If users need to interact with other chains, such as through a bridge system to achieve interoperability, will Stylus help with this?
Steven:
Liquidity fragmentation is indeed an important issue, but I think this is a slightly different area. We have to focus on solving this problem, and Option Labs is working on this direction, with the goal of optimizing the user experience and connecting not only all Arbitrum chains, but all blockchains, especially EVM chains. This will enable users to interact across chains more easily, while developers will be able to create shared experiences.
Stylus as a toolkit is helpful for anything you want to build on a blockchain, but Im not sure its particularly helpful for solving the problem of liquidity fragmentation. The only benefit is that it allows you to verify zero-knowledge proofs (ZKPs) on-chain. If a bridge solution needs to use ZKPs, which is usually necessary, then it may be beneficial in this regard.
Why MEV Capture Is So Attractive to Robinhood
Laura:
I think there is another important factor that may be crucial to Robinhood, and that is control of MEV.
Steven:
If we compare the two options: operating on a public blockchain and launching your own blockchain, there are several very strong reasons for Robinhood to choose to launch its own blockchain, and one of the key points is MEV capture.
MEV refers to the additional revenue generated by the ordering of blockchain transactions, which is usually captured by miners or validators. If Robinhood operated on a public blockchain, their MEV revenue would go to others. Owning their own blockchain gives them full control over MEV capture. This is very important. For example, they can use the Time Boost technology we recently launched on Arbitrum One to optimize MEV capture, or adopt other solutions developed by Dashboard. These specific technology choices will depend on their strategic planning. Although I don’t have more details to share today, it is certain that unique control over MEV can only be achieved on their own chain.
Another important reason is fee capture. If Robinhood operates on a public blockchain, they need to pay fees for each user transaction, and these fees eventually flow to others. If they launch their own blockchain, these fees can not only stay in their own system, but also be converted into a source of income. In other words, Robinhood can not only reduce operating costs, but also increase revenue by attracting more user transactions. This dual benefit - both MEV capture and fee capture - is a unique advantage brought by launching your own blockchain.
Why on-chain equity tokenization could be the “ultimate prize” for Arbitrum
Laura:
Given Robinhood’s recent announcements, particularly the launch of Robinhood Chain, why did he say tokenized shares were so attractive to your team?
Steven:
I think this is very relevant to the Robinhood chain. We are neutral about the relationship between Arbitrum and the Robinhood chain, but the tokenized stock issuance is the part of the entire Arbitrum ecosystem that we are most excited about. Whether it is on Arbitrum One or on Robinhoods own chain, I think this is the ultimate prize that we are really looking forward to. Let me share my personal experience and why I think this is so important.
When I first came across smart contracts back in 2013, what really excited me wasn’t the emerging verticals, such as NFTs (although they were also interesting). What struck me was the powerful potential of this technology to rebuild and transform existing systems. However, over the past decade, many people’s understanding of this vision has become blurred or even forgotten, resulting in cryptocurrency being gradually viewed as an independent system rather than a tool for transforming the existing system.
Robinhood’s approach gives me hope for a return to the original intention of cryptocurrency. Rather than simply launching a new crypto product, they chose to fundamentally reshape their core business. As Robinhood CEO Vlad said, they are “rebuilding” their core product. At the event, they showed the user experience of the Robinhood app in the United States and Europe. The two experiences look exactly the same, and users won’t even notice the difference. In fact, US trades are completed through traditional brokerages, while European trades are completed through the Arbitrum blockchain. This seamless user experience transformation is a huge breakthrough.
This isn’t just a matter of “launching another asset on-chain”, but deeply integrating blockchain technology with existing Web 2 infrastructure. Every user of the Robinhood app, whether they realize it or not, has access to blockchain technology and cryptocurrencies. I think the potential of this approach is very powerful.
What it means to be part of the Arbitrum ecosystem
Laura:
I think one important factor that may have influenced Robinhood’s decision is that Arbitrum’s total value locked (TVL) is performing very well. Its TVL is slightly higher than Base, and the two are at a similar level. This makes me curious, what specific advantages can Robinhood gain from the existing Arbitrum ecosystem by launching on Arbitrum One and then launching their own chain?
Steven:
The liquidity you mentioned is key. Robinhood is a very strong market player, and I believe they will not have much trouble driving liquidity on their chain. But for a product like Robinhood, a deep liquidity network is indispensable. And Arbitrum One happens to be able to provide them with this environment.
Looking ahead, even if these assets are eventually issued on the Robinhood chain, I think they will still have a profound impact on the entire Arbitrum ecosystem. The reason is that the Arbitrum ecosystem is already very mature and strong in the DeFi field. In addition to crypto-native assets, traditional financial assets such as stocks and ETFs can now be introduced. These assets can be integrated into existing protocols and operate together as part of them. In particular, through on-chain stock tokenization, users can use these assets for mortgages, loans, etc., which will completely change the function and potential of the entire ecosystem.
This change will not only benefit the Arbitrum ecosystem, but also the broader Ethereum ecosystem. Being able to issue these assets on-chain will significantly expand the scope of blockchain technology. I believe this innovation will continue to drive the development of Arbitrum One in the short and long term.
How stock tokenization changes investment patterns and its potential risks
Laura:
Maybe you have seen Rob Hadicks tweet, but maybe not, because you may be busy with many other things. He mentioned that combining stocks with the DeFi world may have some far-reaching implications, especially when these tokenized assets are used in DeFi in different ways. He also mentioned that this may cause some problems, such as the price of tokenized stocks may deviate from the price of their actual underlying assets.
After all, the traditional stock market is not like the crypto market, which can be traded 24 hours a day, 365 days a year. What do you think about this? What issues should people pay attention to in this process?
Steven:
I havent actually seen his specific point, so Ill answer from a more general perspective. If my answer doesnt fully correspond to his argument, its because I havent seen his tweet.
First, as you mentioned, the current trading hours of traditional markets are 24 hours a day, 5 days a week, rather than a 24-hour trading model all year round (247). Although traditional markets do have mechanisms for after-hours trading, there is still much room for improvement in overall efficiency. Deep liquidity and arbitrage opportunities are key factors in keeping prices consistent across different markets.
Of course, tokenizing stocks and introducing them to the blockchain market is indeed a brand new innovation. We need to deeply understand how to connect the dynamic relationship between the traditional financial system and the blockchain. This is indeed a challenge, but it should not hold us back.
In fact, the 24-hour trading model throughout the year can bring many benefits. For example, the redemption of traditional money market funds usually requires a waiting period of 5 days, while the stablecoin on the chain can achieve instant redemption. This is very important for large fund holders because they can avoid the loss of interest income due to waiting.
Overall, stock tokenization will provide investors and ordinary users with a more convenient and efficient way to invest. Of course, the problem of price deviation may exist in the short term, but this is because we are in the stage of technological breakthrough from scratch. As technology develops and the market matures, these problems will be gradually solved.
Looking ahead, more and more assets will be issued directly on the blockchain. As Robinhood CEO Vlad mentioned on CNBC last week, encryption technology will be at the heart of the next financial revolution. From the initial paper and pen records to computerization, and then to todays encryption, each transition is accompanied by a certain amount of friction. But we cant stay in the past model. Blockchain and cryptocurrency will become the financial infrastructure of the future, and I believe that everyone will eventually adapt and move in this direction.
Why Arbitrum DAO will benefit from this collaboration
Laura:
I have a question, because usually theres a financial aspect to a deal like this. Can you talk about whether there were any financial incentives in the partnership with Robinhood or share some information about that?
Steven:
Due to regulatory restrictions, I cannot reveal the specific details of the partnership. However, I can say that this partnership is very beneficial to both parties. Not only will it help Robinhood expand its product range, but it will also bring significant value to Arbitrum DAO. The DAO will not only be able to enhance community building through these integrations, but will also receive financial benefits from each project launched.
Liquidity fragmentation is easier to solve than most people think
Laura:
I want to go back to the issue we were talking about earlier about liquidity fragmentation. This is an issue that is likely to become more prominent as these areas come together. Are there any particular solutions that youre excited about or areas that you think need more attention? And overall, how do you think this issue will be solved?
Steven:
This is a question I have been thinking about. Perhaps my point of view is somewhat controversial. Many people think that liquidity fragmentation is a technical problem that can be solved by the technical team designing complex protocols. But I think technical issues only account for 10%, and the real core is 90% of the user experience (UX) and wallet support issues. Even if there are more complex protocols, if the wallet cannot simplify user operations and let users feel a unified environment, these technical innovations will not really work.
Of course, we can also do more optimization in protocol design. There are already some good protocols that can alleviate the problem of liquidity fragmentation. Although they are not perfect, they can still promote this process. However, what really needs to be solved is the improvement of user experience. For example, the current blockchain experience is like the Internet without a browser. Users need to enter complex addresses to interact and complete various cumbersome operations, which is very unfriendly to ordinary users.
We are working hard to build tools similar to browsers to simplify the complexity of users interacting with the blockchain. For example, imagine if a window pops up on YouTube asking you if you want to watch through AWS or through ECP today. This is completely meaningless to users. Users only care about the experience of the application, not the underlying technical details. Therefore, I think redesigning the front-end experience is the key to solving the problem, and it is also an easy goal to achieve, but no one is really doing it yet.
We are launching some initial solutions to facilitate this process and we will release more information about them in the coming weeks. By combining existing resources and technologies, I believe we can solve most of the challenges in the liquidity fragmentation problem.
Where will the integration of crypto and traditional finance go next?
Laura:
I imagine youre probably engaging in some very interesting conversations right now, though you may not be able to reveal too many details. But can you talk about the trends youre observing, or based on these conversations, where you think the industry is headed in the short term? Weve noticed a lot of companies recently starting to compete in the same space, each approaching it from different directions and perhaps with different strengths. At the same time, a long-held view of many people is becoming a reality, and that is the emergence of the Internet of Finance. I remember someone mentioned some of your common ideas, probably at Bankless. We seem to be witnessing this process in a slow manner, which may take a decade or more.
Based on what youre seeing now, what do you think will happen in the short term? What are some interesting ways that the two worlds are combining that the average person might not yet realize?
Steven:
First of all, I do say this a lot, I think we have some misunderstandings in the use of terminology. For example, no one would say I work in centralized finance, finance is finance. And blockchain is not a marginal technology that only a few people can access. It is actually a tool that can reconstruct the entire financial system, and eventually it will be integrated into our financial system and become part of it. I believe that this will become more and more obvious over time, and blockchain will play a vital role.
It’s always been difficult to enter this space, and everyone is waiting for someone to break the first barrier before others can follow. So now we’re seeing a lot of smart people and large institutions saying, “I didn’t think this could happen, but if they can do it, we can try it too.” It’s both an incentive and an observation of the actions of the first movers. At the same time, these institutions are also looking at existing token standards and thinking about how to collaborate or reuse these technologies and build open standards based on them. These are all important conversations that are happening in the industry right now. I think there’s almost no large financial institution that doesn’t have a team looking at how to integrate blockchain technology. It was a completely different situation five years ago, when you still had to convince them that this was worth discussing, and now it’s the opposite.
As the regulatory environment changes, and forward-thinking businesses like Robinhood take big steps, they inform other institutions’ decisions. As the old saying goes, “No one ever got fired for choosing IBM.” As blockchain technology becomes more mainstream and widely accepted, institutions will realize that building on blockchain not only provides better services to users, but also reduces costs and improves profitability. It’s a win-win. And, as the first movers take action, others will feel more comfortable joining.
In addition, there are companies such as BlackRock, Franklin Templeton, and WisdomTree that have developed products on Arbitrum. As for what this means for ordinary users, going back to the point I mentioned earlier, the most exciting thing is that users no longer have to deal with complex technical details. For example, in the past, people might have thought that to use the blockchain features on Robinhood, users needed to download wallets, back up mnemonics, connect to RPC servers, etc. But what we see today is that blockchain technology can serve both technical users and ordinary users at the same time, providing a more seamless experience.
I think it is very important to give users the choice of self-sovereignty, which means that users can transfer assets to their own wallets at any time, or choose other custody methods. This is a core advantage of blockchain. However, I also don’t think that the next billion users will use blockchain through cumbersome operations like today. We need a more friendly user experience to truly achieve this goal.
Defending Ethereum and criticizing L2 opponents
Laura:
Over the past year and a half, there has been a view that L2 such as Arbitrum is a parasite of Ethereum. Although this statement may not be accepted by everyone, its core meaning is that L2 diverts some value from the Ethereum main chain, such as transaction fees. At the same time, we have also seen that the ultrasonic money theory has not fully achieved the expected effect, and these changes are redefining the industry landscape.
What I want to ask is that in the recent event, AJ, Vitalik and Johann appeared on the same stage, and it seems that the Ethereum Foundations attitude towards L2 is changing. So, what does this moment mean to the Ethereum community? What is the relationship between Ethereum and L2? In addition, what is Vitaliks attitude towards DeFi?
Steven:
I don’t think the core value of the Ethereum community is diminished by this. In fact, I was one of the first to share the details publicly, and I can tell you that Vitalik is very supportive of the progress being made. His active participation in the event speaks for itself. While I can’t speak for him, based on my interactions with him, he is very excited about the current developments in the industry and sees this as an important win for Ethereum.
For those who question the relationship between L1 and L2, especially the view that do we really need L2? Why not put all functions on L1 , I think their vision may be too limited. If you think the future of the crypto industry is just what we saw a week ago, then you may feel that there is no need to develop L2. But in fact, the development of the industry requires greater capacity. Institutions are entering the blockchain field on a large scale and have expanded to 32 countries around the world, building core applications on this technology. We need a scalable solution, and the development plan of L2 is the only path that can meet future needs.
For example, if you build a new road on a congested single-lane highway, someone might say, Why build so many lanes? Traffic is not that congested now. But in fact, a new city is being formed and these lanes will be completely occupied in the future. We cant repeat the construction of new lanes every year, but need a long-term solution. Through the L2 development roadmap, we are able to move from a single L1 platform to a more decentralized and efficient L2 ecosystem. Although this process is not easy, once the interoperability problem is solved, we can achieve long-term sustainable development.
The Ethereum community has already crossed this hurdle, and while there are still some issues to be resolved, we have basically built the foundation to support future development. For example, Robinhood recently chose Ethereum as the core platform for its blockchain technology and launched crypto trading capabilities based on Arbitrum. This is not just my personal opinion, Robinhood also made it clear that they chose Ethereum because it has the most suitable ecosystem for their business, and Arbitrum is the best technical solution to achieve this goal.
