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Robinhood, the trading app used by many retail traders during the meme-stocks frenzy that began in 2020, is once again taking on its more traditional competitors by testing a stock-lending function in beta.

Both of Robinhood's  (HOOD) - Get Free Report main rivals, E-Trade and Fidelity  (FSST) , already have the ability to let its traders earn passive income by lending stocks to financial institutions.

A beta version was first spotted in the iPhone  (AAPL) - Get Free Report app for Robinhood users by developer Steve Moser, who details his findings online.

Robinhood has said that it was planning to add the tool in 2022, and it confirmed it was aiming for a release in coming months

“We are still on target to release this product in the first half of 2022, which will provide even more value to our customers,” Robinhood spokesperson Rouky Diallo said in a statement.

What Will Traders Like About This?

In many ways, the market itself runs on securities lending, like the kind Robinhood is adding to its program.

When market participants can lend securities to other institutions or position holders, it lets those actors cover short sales or wrap sales up more quickly.

That in turn adds liquidity to the market, which keeps everything moving smoothly and in turn churns more money back into the market ecosystem.

Most importantly, it lets traders earn income without actively being involved in those deals. They see their balances going up without having to do anything other than participate in the program, dubbed the Stock Loan Income Program, or SLIP.

Do Competitors Have Anything Like This?

Both Fidelity and E-Trade already offer this tool, which is generally known as fully paid securities lending.

Both have seen warm welcomes for that function, which helps add to traders' bottom lines easily and automatically. 

Robinhood has been working on the program with regulator FINRA, it told TheStreet on Thursday.

Language in the app detailed by Moser flags that for users the transactions are not protected by the Securities Investor Protection Corp., and that their income will come from whoever borrows the securities, not the issuing companies.