- Robinhood selected an Ethereum Layer 2 instead of a new Layer 1 due to decentralization concerns on some networks.
- Company cited Ethereum’s strong infrastructure and interconnected liquidity across EVM ecosystems.
- Strategy prioritizes accessibility and integration with existing financial and blockchain networks.
Robinhood’s crypto leadership has raised concerns about the structure of several non-Ethereum blockchains. Robinhood Crypto General Manager Johann Kerbrat discussed the company’s decision to build a Layer 2 network instead of launching a new Layer 1. Kerbrat pointed to decentralization concerns and liquidity access as key factors influencing that strategy.
Centralization Concerns Affect Some Layer 1 Networks
Johann Kerbrat said several large non-Ethereum Layer 1 networks still face centralization challenges. According to Kerbrat, certain incidents show validators restarting systems simultaneously during disruptions.
He explained that such coordinated restarts raise questions about decentralization. In contrast, Kerbrat said Ethereum provides established infrastructure that developers can rely on.
Because of that structure, builders can focus on applications rather than rebuilding core network components. Kerbrat described this foundation as security developers receive without additional engineering effort.
Therefore, teams can direct resources toward building services instead of maintaining base network functions. That difference, according to Kerbrat, influenced Robinhood’s technical decision.
Liquidity Access Shaped Robinhood’s Strategy
Beyond decentralization, Kerbrat highlighted liquidity access as another major factor. Ethereum connects with numerous EVM-compatible chains and decentralized applications.
According to Kerbrat, that interconnected liquidity environment offers advantages for financial services platforms. A project operating independently would struggle to attract the same network activity.
Kerbrat compared isolated networks to private islands. In such an environment, users and assets cannot easily move between ecosystems.
Robinhood, however, aims to build services that operate within a broader financial system. Kerbrat said the company wants open access rather than closed infrastructure.
Layer 2 Design Focuses on Accessibility
Kerbrat also addressed how Layer 2 economics can vary between projects. Some networks choose extremely low transaction fees, while others capture portions of Ethereum’s fee structure.
However, Kerbrat said Robinhood focused less on fee revenue during early planning. Instead, the company prioritized accessibility and integration with existing liquidity networks. That approach reflects the company’s broader goal for blockchain infrastructure.
Kerbrat said Robinhood intends to support financial systems operating directly on-chain. For that reason, the company selected a Layer 2 model connected to Ethereum rather than launching a separate Layer 1 chain.