[ddulaney]

Presumably a combination of a flat-rate fee ($1/user/month) and payment for order flow.

PFOF is a big moneymaker for Robinhood, but you get paid the more your users trade so people doing buy-and-hold index funds probably earn you less that way.

If you can keep expenses super low maybe this can work. But my sense is that costs are pretty flat regardless of how many users you have, so this probably needs to get pretty big to finance itself.

[thanksgiving]

PFOF is so incredibly dirty that I can't believe it is legal. If you could explain it to all the voters without putting them to sleep, I am convinced most people would not support it. It may be legal but it is definitely unethical. That being said I can't see how else OP can payback YC without doing these shady things. At a dollar per user per month, even if every adult in the US joined, YC will probably shut down OP without a second thought if that was the only revenue possible.

> so people doing buy-and-hold index funds probably earn you less that way.

You will be constantly buying and selling because you need to rebalance your "index" every time the market moves... Once you go down this unethical rabbit hole, there are endless possibilities.

[ddulaney]

I’m not sure what the objections to PFOF are. Do you think you get worse execution than the public market?

If so, it’s easy to prove: compare the price you got to the public markets price at that time. I don’t think you’ll see a worse price.

You should be insulted that somebody is willing to pay for the privilege of trading with you. You can reasonably object to the amount of PFOF vs. price improvement. But it’s not unethical to say “we want your business so much we’ll pay for it”.