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Unsyndicated Brief #3: Twitter & Robinhood Doubling Down on Crypto

Mason Nystrom
Mason Nystrom
Twitter Tips and NFTs. Robinhood reveals from Messari Mainnet.
Hey everyone, I’ve recently switched my newsletter from Substack to Revue since it integrates directly with my second love, Twitter (with my first love being my fiance). Anyway, if you’re seeing this email, then the migration worked. If you’re not…

1. Long Twitter
My favorite addiction: Twitter first launched its NFTs via Rarible in late June. Recently, The blue bird social media platform announced that users will be able to accept tips in Bitcoin and announced plans to allow NFT owners to connect their crypto wallets to Twitter, in order to verify and showcase NFTs on Twitter. 
Just the tip: Twitter’s bitcoin tipping feature has been long-rumored, but I’m skeptical the U.S will fully adopt the tipping feature. Ironically, while tipping is ingrained in the U.S. service culture (servers, drivers, etc), it is absent in our digital services. Conversely, China possesses a robust tipping culture for online services and streamers. However, some Twitch streamers earn meaningful amounts in tips and I expect it will be the same on Twitter.
Avatar: The First Verified PFP: Penguins (Water), Apes (Earth), Punks (Fire), and Boss Beauties (Air) are coming to Twitter, soonTM. 
NFT avatars and PFPs (profile pics) are (mostly) status serving symbols that identify an individual is: 
1) early to a trend 
2) wealthy enough to buy the NFT 
3) a member of a community (because they were early or wealthy)
4) all of the above
Some NFT avatar projects like Adam Bomb Squad provide greater utility and some recent launches have opted to add this type of utility.
In the first half of 2021, NFT avatar projects facilitate over $600m in sales. To date, Bored Ape Yacht Club has garnered over $500 million in sales and the total avatar sales likely surpass $2 billion.
NFT Sales for first half of 2021 surpass $600m
NFT Sales for first half of 2021 surpass $600m
Avatar NFTs are now an established sector that will ultimately face power-law distributions, some will be worthwhile while most will be worth much less.
More than just verified NFTs: All of Twitter is foaming at the mouth to verify and showcase their NFTs on their platform. But there are dozens of other interesting applications of NFTs and crypto if Twitter can integrate crypto (Web3) wallets. 
Some potential ideas:
  • Verifying how long a user has owned an asset 
  • Recommending follows based on NFT owners
  • Selling/auctioning NFTs from Twitter profiles
  • Combining Twitter’s newsletter (Revue) with NFTs (e.g. Mirror) 
  • Creating social graphs by NFT owners
Once existing companies integrated Web3 wallets, the possibilities become endless. 
The Takeaway
Twitter Products 🤝 NFTs: Humans have a strong desire to assign status. It’s part of our culture. The value proposition of these status-based NFTs is greater when combined with social media. Once individuals have verified NFTs, there are groups, tiered perks, Spaces, and other features that Twitter can combine to build an even greater platform. So far no social media platform has cracked the crypto strategy, maybe Twitter will be the first. 
2. Robinhood Crypto Set Aggressive Expansion
Double The Doge, Double the Fees: In Q1 17% of Robinhood’s transaction-based revenue (AKA not selling order flow) was from crypto with 35% of that from Dogecoin. In Q2, 50% of transaction-based revenue came from crypto, 62% of which came from Dogecoin. Holy hell.  
Catching up to where the puck is: In Q2, 60% of Robinhood’s cumulative net-funded accounts traded crypto in the quarter. Compare this with Robinhood’s pretty abysmal crypto platform which boasts 7 assets:
  • Bitcoin – The classic, but very vanilla for investors  
  • Bitcoin Cash – mostly unused
  • Bitcoin SV – no comment
  • Dogecoin – memecoin 
  • Ethereum – Also great, but not as exciting as DeFi or other tokens
  • Ethereum Classic – mostly dead
  • Litecoin – abandoned 
Ultimately, while Robinhood has made significant revenue from Dogecoin, the adorable memecoin will not continue as the key to Robinhood’s crypto success.
Messari Mainnet Revelations: 
Robinhood’s crypto strategy has been fairly underwhelming to date, but last week at Messari Mainnet, COO of Robinhood Crypto Christine Brown and CTO of Robinhood Crypto, Johann Kerbrat, revealed that $HOOD is 10xing its crypto strategy. CTO, Kerbrat revealed the engineering team has 10x’d in size and the entire crypto team in general. 
Come for the deep value, stay for the fun: Some insights from the Robinhood Crypto Messari Mainnet discussion:
  • Moving Your ASSets: Users will be able to move cryptoassets out of Robinhood (which are currently held as 1s and 0s in a database)
  • Race to Zero: Robinhood is going to keep its zero-fee strategy, potentially forcing giants like Coinbase to reduce or eliminate their fees.
  • MOAR Tokens: On listing new tokens, “We aren’t going to share a timeline of what coins and when, until later this year” - Christine Brown, COO at Robinhood Crypto. Coinbase, Kraken, Gemini, and other exchanges have opened their listing floodgates, I expect Robinhood to do the same. 
  • Wen Staking?: “We can’t tell too much about our roadmap, but something I’m really excited about is staking in general” - Johann Kerbrat, CTO of Robinhood Crypto. Staking will take longer, but it looks like Robinhood understands the importance of adding this feature. 
  • Give the people degens what they want: “Robinhood is the gateway, if you want to acquire a coin and go acquire an NFT, we’re going to support that. We have a healthy appetite of what we’re going to tackle in 2022 and a lot of that will come from our customer demand, what do they want.” - Christine Brown, COO at Robinhood Crypto. Robinhood is clearly having FOMO about missing out on DeFi, NFTs, and is looking to expand its offerings. 
The Takeaway
Right Rudder!: After having put its crypto strategy on the backburner in order to IPO smoothly, Robinhood is finally realizing that a majority of its future growth lies within crypto. However, the scrutiny of a large exchange, the GameStop fiasco, and general distaste from regulators might make turning the crypto trajectory of the $HOOD ship challenging. It’s possible that Robinhood will (hopefully) create a race to zero in crypto exchange fees if they’re able to increase the list of cryptoassets they support. Still, Robinhood is going to need to play some expedited catch-up – via building or acquisitions –  if it looks to compete with the likes of existing exchanges. 
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Mason Nystrom
Mason Nystrom @masonnystrom

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