This week, Robinhood announced that it was working on a non-custodial crypto wallet that allows customers to maintain access over their private keys. The wallet will also allow the trading of DeFi and non-fungible tokens, or NFTs.
Robinhood will not charge network fees and will also allow customers to use DeFi and NFT services inside the wallet. Beta versions of the Web3 wallet will be available starting in the summer, and there is already a waitlist of more than 500,000 users. The non-custodial wallet will be fully unveiled later this year.
Robinhood's non-custodial crypto market may be highly attractive in an ecosystem dominated by few rivals. MetaMask is sometimes criticized for slow speeds and a poor design that is not user-friendly, and Coinbase, while growing in popularity, shocked investors when it declared this month that customers' virtual assets might become the company's property in the event of bankruptcy.
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There are still some risks associated with a non-custodial wallet for first-time users. Losing one's private keys would prevent a user from accessing their money irretrievably. Robinhood told Decrypt that it was planning to provide safeguards for users with less familiarity with private keys.
There is also some ambiguity about the costs of transactions, which are typically high on the Ethereum network, due to Ethereum's high gas fees. Robinhood's Crypto Chief Technology Officer Johann Kerbrat told Decrypt that the fintech company will work with “liquidity partners to get the best price,” but was short on details what that might entail.
However, critics point out that Robinhood may be arriving too late to the non-custodial wallet space, and recently laid off 9% of its workforce on top of seeing the departure of key crypto staff like Christine Brown, the former crypto CEO of the company.
Last week, FTX crypto exchange CEO Sam Bankman-Fried, however, announced a nearly 8% stake in Robinhood.