In plain terms
Brokerage Business model where thinly-capitalized retail-facing platforms (Robinhood, SoFi, Webull) aggregate fragmented retail order flow, route it to concentrated wholesale market makers via PFOF, and monetize the user base via IPO / SPAC…
Brokerage Business model where thinly-capitalized retail-facing platforms (Robinhood, SoFi, Webull) aggregate fragmented retail order flow, route it to concentrated wholesale market makers via PFOF, and monetize the user base via IPO / SPAC / public equity. The retail broker is structurally a pipe, not a capital counterparty — they do not have the balance sheet to backstop their own settlement obligations during volatility events. The January 28 2021 Robinhood $3 billion NSCC margin call revealed this architecturally: DTCC can physically throttle the pipe by demanding collateral the broker cannot post. 'Democratization of finance' is the front; retail tollbooth is the substrate.