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Comment by fullshark | Hacker News Reader

~70% was transactions and ~20% was interest. For comparison about 60% of Etrade's revenue is interest and 30% is fees + commissions.

Either Robinhood has found a smarter business model re: selling order flow or they are making a killing on crypto fees. The commission business model is dead for good I think.

https://www.nasdaq.com/articles/net-interest-revenue-will-fo...

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>or they are making a killing on crypto fees.

They don't charge commissions to trade crypto. Not sure where they're skimming the money but the terrible order fills you get there gives me an idea.

Front-running?

No need. It's just like those "commission free" currency exchange places you see at airports and tourist areas. There might not be a commission, but the spread is several percent, and they make all their profit off that.

A rose by any other name...

There are no regulations on execution quality for crypto. RH treats crypto as forex and quotes their customers a huge markup on the bid/ask spread (think airport forex booth type spreads). RH customers can only trade with RH and their crappy spreads. RH won't match customer crypto orders against each other.

In the S-1 they write: "For the three months ended March 31, 2021, 17% of our total revenue was derived from transaction-based revenues earned from cryptocurrency transactions, compared to 4% for the three months year ended December 31, 2020."

So they do charge something on crypto transactions?

Commission model is going nowhere. Ask anyone who trades for a living. They pay handsomely for direct market access.

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