Joe Weisenthal: Would there be any limitation legally on Robinhood setting up a live stream of a giant roulette wheel and having people make futures event contracts on whether it's red or black?

Vlad Tenev: Yeah, I mean, currently our policy has been to have them be backed by real events. So we don't want to do like derivative. We haven't done any derivative prediction markets. And there's there's different forms of that as well. Like you have like prediction markets and then you have a prediction market on how this prediction market is going to go.

Joe Weisenthal: So like for example, Poly Market had a market where it was the coin toss at the Super Bowl and you could bet on heads or tails and was trading at 50%. Yeah. For the toss. And then it went to I mean, that seems very much like gambling, right. Well, like, why even bother having the Super Bowl at that point if people are willing to, like, bet money on a coin toss? Why not just have a continuous coin toss? Why? Why just forget the Super Bowl. Just have a coin tossing machine and let people trade on it. Is there like, is there anything actually like stopping you from doing that?

Vlad Tenev: I'm not sure. Yeah. I mean, I'd have to look into that. We don't offer any of those contracts. I personally, you know, I'm a former trader. Probably wouldn't trade those.

Tracy Alloway: So we did an episode last year with Vlad Tenev, co-founder and CEO of Robinhood, and that was about the company's tokenization efforts. So basically, its ability to create instruments that would allow users to actually trade, shares, not shares, I guess, but, you know, quasi equity or equity linked instruments in private companies like, you know, an OpenAI or something like that. And then after that came out, a bunch of people, including the company, there's a lot of reaction. Yeah, they're like, what the heck we did. Since when did you know these private companies? They're like, since when the heck did like, we authorize our equity to be traded like this for all kinds of stuff.

Vlad Tenev: Yeah. And, you know, they, I think there was various degrees of disavowal. I think a lot of these companies are very concerned about their reputations, and if they don't understand something, they don't have time to to dig into it. They'll just say, we had nothing to do with this, which I think is fair. I think you talk to these AI companies and they all kind of say the same thing, which is, yeah, we'd love our, our, company to allow retail investors exposure. Right. And we think that would be better for the world. Everyone generally agrees with this. But when you get down to the details of what that entails and it is a new thing, not a lot of companies are doing it. Nobody really wants to be the first, and no one wants to mess with the status quo.

Vlad Tenev: And actually this week we are taking public, Robinhood Ventures fund one RV on the Nicey, which is a closed end fund. So you can think of it as a venture capital firm that we're taking public. We raise capital from retail investors and some institutional as well. And we use that capital to invest in private companies, which we've already invested in, and quite a few. These are things that traditionally would be limited to accredited investors. Right. But it's non-accredited vehicle and also no carry.

Vlad Tenev: Portfolio companies and these are companies like Databricks or, Revolut. I think I have to go through all of them because I don't want to pick out a particular, boom, hypersonic. Oh, yeah. We had their see on. Yeah. Macau, and stripe, which we've signed in and not closed. And I'm probably forgetting some, but, yeah, these are all companies that are excited to have Robinhood and retail be a part of the picture.

Tracy Alloway: I have one conceptual question, which is when you think about the difference between, I guess, investor trading and gambling, how would you differentiate those three activities?

Vlad Tenev: I think that the difference between investing and trading is really one of velocity. Investing to me is the mental model is buying something and I never intend to sell it. Longer term. So, so it's sort of like accumulating assets and you intend to, to have them only grow. Trading is I'm going to move in and out because I see an opportunity. And that opportunity might not exist in one day or three months. But there's like a very particular thesis that I have that's time bound and systematic and, I think gambling is, I think gambling is like, mostly emotional, driven.

Tracy Alloway: But like I said, Europe or U.S, if someone buys something that on the Robinhood platform is called an OpenAI token. Yeah. What are they getting? Is it is there do you have equity that has been like backing it? Is it a sort of swap where the only thing backing it is your promise to like redeem the token at some price? Like what does the what what is the token.

Vlad Tenev: So yeah. Technically the way this works is it's kind of similar to a stablecoin. Yeah. So you have your bag of traditional assets that are governed by traditional rules and legal covenants and whatnot here. And then you mint and burn tokens against that. But yeah, as of now in Europe, it's a derivative, derivative product.

Joe Weisenthal: But on the other hand, it seems like so much work. Would it not just be simpler to try to lobby for the accredited investor rules to actually be changed?

Vlad Tenev: Yeah, I think we're doing that as well. I think the accredited investor rule, needs to go. Frankly, it doesn't make any sense. But I don't think that answers all of the problems that people have with private market investing. The other problem is just liquidity. Chairman Adkins of the SEC actually specifically called out closed that funds as the preferred vehicle for having access to private.

Joe Weisenthal: It seems to me like, okay, the traditional VC fund, like you're going to optimize for making the most money, the best returns, including names that no one has ever heard of. Why should I not think that Robin Hood's portfolio has been optimized for retail awareness?

Vlad Tenev: Well, I mean, first of all, we are incented to make this firm, perform well, right? The returns will just be out there. And, you know, we have a fiduciary obligation. I think the biggest worry that you have with things like this is actually adverse selection, right? Is are you just going to get into the deals of the companies that, need the money and are desperate for.

Vlad Tenev: It's the most secure credit card on the market. Your number is not on it. Oh. All right. Oh, that is legit. I got the heaviest card on the market. Beats out the Robinhood gold.

Vlad Tenev: It's a fashion accessory. It's a luxury. Good. And I don't know if the credit card industry is really has really evolved I think the same degree it iPhone. I keep telling, Deepak that a tungsten card for crypto people would be cool.

Joe Weisenthal: So I mean, it does feel like the I guess the trajectory of history right now is marching towards tokenizing everything and just allowing markets in everything and everything and everything. But the other thing I've been thinking of is, you know, we used to hear of markets described as, you know, there were upsides to capitalism, right? Like you're supposed to be efficiently allocating money.

Tracy Alloway: And it's going to increasingly sort of like be taken over by tradable instruments for which investors really do not have the same level of information at all. And the expectation that an investor would like be able to know the share count of a thing they're buying, or would be able to know the earnings or the margins of the thing they're buying, like that's going away.