It gives you total control over your crypto, but the promised NFT support isn’t ready yet.
Robinhood has launched the beta for its “Web3 wallet” for 10,000 iOS users who signed up for the waitlist. The company teased this product earlier this year after making an earlier crypto wallet more broadly available. Unlike its existing cryptocurrency wallet, the Web3 wallet isn’t just for storing cryptocurrencies that can be traded on the financial platform — it can also be used to “seamlessly access the decentralized web,” as Robinhood’s press release puts it. The wallet will also let people trade cryptocurrencies without any fees.
The Web3 wallet also differs from the company’s other crypto wallet in that it’s self-custody, meaning you’re responsible for keeping the keys for it secure. In practical terms, that gives you a bit more control over your crypto but also means that if you forget your password, there’s nothing Robinhood can do to help.
It’s clearly still very early days for the wallet; for one, it won’t support viewing NFTs or connecting to NFT marketplaces until the public release. Even if you could connect the beta wallet to OpenSea, though, you’d be a bit limited in what you could do with it. Robinhood says that for the time being, it’ll work “exclusively” with the Polygon blockchain rather than the more popular Ethereum one. To put Ethereum’s dominance in perspective, DappRadar reports that there were almost 384,000 OpenSea transactions on the blockchain in the past week; meanwhile, there were only 82 transactions on the Polygon chain. (Note: not 82 thousand, just 82). It is worth noting that going with a non-Ethereum chain isn’t automatically a bad choice — Solana just surpassed it in sales for the first time, though it hasn’t been consistently beating Ethereum.
Robinhood does say it’ll add support for other blockchains “eventually.” Currently, beta users will be able to fund their wallet with the USDC stablecoin, trade crypto, “earn crypto rewards,” and connect to decentralized apps, which Robinhood says will allow you to earn yield. (Though, again, you’ll be limited to dApps built on the Polygon chain.) In theory, you could use it with decentralized apps that do other things as well, but… well, let’s be honest, both Robinhood and the broader Web3 community focus mainly on the money side of things, so it’s very on brand for yield generating apps — which mostly work by investing or trading deposited crypto — to get the call-out here.
The concept of earning yield, or interest, has been getting a lot of legal scrutiny lately, with several states suing a crypto company for allegedly offering a yield product without authorization and the SEC ordering BlockFi to pay $100 million in penalties because of its interest accounts. However, Robinhood saying that you can connect its product to similar apps and actually offering one of those services itself are two different things.