April 29, 2022

GIF: Alex Muravev / The Noun Project; Protocol
Good morning, and welcome to Protocol Fintech. This Friday: Robinhood’s no good, very bad week, Telegram takes on crypto payments and FinCEN reiterates its stance on crypto in a Congressional hearing.
Robinhood had a rough week.
The company announced Tuesday that it was letting people go before posting results that fell short of expectations on Thursday. And the way forward looks so hazy that Robinhood decided it should stop providing revenue guidance.
Robinhood definitely needs more growth to finally become profitable, but it will have to find a way to do it with fewer people.
The cash flows are drying up for Robinhood. Its revenue dropped by a whopping 43% year-over-year. CEO Vlad Tenev told analysts that the company faced a “challenging environment” which “most of our customers have never experienced in their lifetimes.”
Now, its hiring binge looks far less smart. Robinhood grew from 700 at the end of 2019 to nearly 3,900 in two years, Tenev said. Those days are over.
So, is the party over? Robinhood is pulling back after a period of explosive, if bumpy, growth. The company now needs to show “more discipline on cost,” Johnson said. “It means the end of irrational exuberance for the tech bros” who blazed the trail for retail commission-free trading, said Bill Pearce of the UC Berkeley Haas School of Business.
— Benjamin Pimentel (email | twitter)100% of C-suite staff surveyed by Workplace by Meta said that frontline workers were a strategic priority for their business in 2022, but nearly two in three of them said that keeping their frontline staff, who bear the brunt of the stresses of the workplace most acutely, had only become a priority since the pandemic hit.
Crypto payments are coming to Telegram, signifying a potential mainstream move for crypto payments in messaging platforms. Toncoin is currently the only token supported on the platform, managed by the TON foundation.
Homebuyers now have crypto as a mortgage option. Milo Credit, a real estate startup, is letting future homeowners put crypto down as collateral, with no down payments required. But customers run the risk of crypto’s volatility.
PayPal wants to “double down” on digital wallets. CEO Dan Schulman said on its Wednesday earnings call that digital wallets will play a major role in the digital payment giant’s growth strategy.
Deus Finance suffered another exploit. This is the second attack suffered by the DeFi platform within two months. The most recent exploit was through a flash loan, where the attacker made about $13.4 million in crypto as a profit.
The FinCEN Network acting director testified before Congress. Issues around crypto as a method of sanctions evasion as well as concerns around self-hosted crypto wallets were central to the discussions in the hearing.
How successful are new crypto tokens? Not very, it seems: A new study shows that 80% of new cryptocurrencies are underwater relative to bitcoin within a year. The study found that most new types of crypto start underperforming within its first month, with the exception of a few outliers and stablecoins. But at least it does show signs of an efficient market.
Businesses are starting to turn to workplace communication tools. Such tools enable frontline workers to feel more connected to the rest of their business, to raise concerns and to provide feedback on potential pain points or points of improvement. By bridging that divide, companies can unlock new savings and efficiencies, and build a business that can last for the long run.
Thanks for reading. We hope you’ve enjoyed these briefer newsletters while we gathered our team for our first-ever Protocol all-hands. The time together helped us generate some great story ideas that we’ll be sharing with you in the months to come. We’ll be back with all of your favorite Protocol Fintech newsletter features Monday!
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