Coinbase unveils smart and embedded wallets to ease developer onboarding and enhance user experience in Web3 products on its layer-2 blockchain, Base.
Coinbase is in the process of developing two innovative wallet solutions that specifically target seamless integration and balance transfers across Ethereum Virtual Machine (EVM) applications. These solutions are strategically aimed at streamlining the onboarding process for developers onto its layer-2 blockchain, Base.
One of the newly introduced solutions is a sophisticated smart wallet, empowering users to effortlessly carry their balances across various EVM-compatible applications seamlessly integrated with the Coinbase Wallet SDK. The second feature is an embedded wallet designed to enable developers to seamlessly incorporate noncustodial white-labeled wallets into their applications.
According to Coinbase, both features have been meticulously crafted to address the pain points developers often encounter in terms of user experience when building Web3 products.
“Over the past year, we've gathered valuable insights from our customers, and our dedicated efforts to enhance product experiences have culminated in the development of Embedded Wallets. It has truly been a continuous journey over the past year,” shared Yuga Cohler, senior engineering manager at Coinbase Embedded Wallets, in a conversation with Cointelegraph.
This strategic move marks an expansion of Coinbase’s wallet-as-a-service product line—a model that facilitates developers in seamlessly integrating digital wallets into their applications without the need to develop the core technology from scratch. This solution is particularly advantageous for companies seeking to incorporate digital assets into their products and offerings.
“To draw a contrast with the self-custodial wallet model. [...] When using a DApp like Uniswap or OpenSea, users typically need a Chrome extension or must visit it through their own custodial app. [...] Our aim is to offer APIs that empower these DApps to create wallets on behalf of their users, all while maintaining a native user experience within the DApp environment,”
Wallet-as-a-service has gained significant popularity in the crypto space, with Crypto custodian BitGo presenting a similar service that encompasses both custodial and noncustodial wallets tailored for enterprises.
Both BitGo and Coinbase leverage multiparty computation (MPC) technology to power their solutions, enabling multiple participants to compute results based on private data without exposing it to each other or external entities.
“It's crucial to note that this technology operates without smart contracts. The cryptography of MPC occurs entirely off-chain. It's a protocol with various MPC protocols available, and Coinbase utilizes an in-house protocol,” explained Cohler.
Recently, Coinbase made headlines by discontinuing support for native Bitcoin (BTC) on its merchant payment platform, Coinbase Commerce. The decision was attributed to challenges in delivering recent updates to its EVM payment protocol for the cryptocurrency.