Coinbase has announced a new service, Wallet as a Service, designed to make Web3 technology more accessible and user-friendly for companies and consumers. The set of developer tools on the new service will enable firms to embed custom digital wallets into their applications and streamline the process of setting up a wallet down to creating a username and password,— thus eliminating the technical complexity associated with most standalone digital wallets. Coinbase’s goal is to make wallet setup easy for its users.
Coinbase’s Wallet-as-a-Service platform
Furthermore, Coinbase unveiled that its wallet-as-a-service (WaaS) offering provides enterprises with a technical infrastructure for creating and launching customized on-chain wallets. The platform features an application programming interface (API) that enables businesses to create wallets for streamlined customer onboarding, loyalty programs, and in-game purchases.
According to Coinbase, Web3 wallets have lagged in mainstream acceptance due to their complexity, poor user experience, and difficulty safely managing mnemonic seeds. To combat this issue, Coinbase’s Web3 Developer Platforms has released WaaS, a solution designed to provide control over end-to-end product experiences, reduce implementation cost and complexity, and improve security while reducing risks.
According to Patrick McGregor, head of product at Coinbase’s Web3 Developer Platforms, the current onboarding process often requires users to download third-party self-custodial wallets, which can be disorientating and cause high drop-off rates. According to him, WaaS aims to simplify this process and allow companies to deliver their product successfully.
The WaaS toolkit incorporates multi-party computation (MPC), a form of cryptography that enables multiple parties to compute a function without revealing their inputs. MPC is believed to enhance the security of private keys within Web3 platforms. It allows users to store digital assets more securely by splitting private keys into multiple parts and distributing them across the involved parties.
McGregor noted that WaaS’ MPC cryptographic function eliminates the issues of key loss often encountered in traditional self-custody. He added that users can quickly backup and maintain access to their assets thanks to their user-friendly software development kits. Companies like Floor, Moonray, Thirdweb, and Tokenproof already use WaaS infrastructure.
The growing adoption of Web3 tech
Coinbase CEO Brian Armstrong highlighted the increasing adoption of Web3 tech by non-crypto companies, citing Starbucks, Adidas, Nike, Coca-Cola, and social media giants such as Instagram, Twitter, and Reddit during Coinbase’s most recent earnings call. He pointed out that customers of these services will require a crypto wallet – an area in which Coinbase could capitalize. Ethereum scaling network Polygon has become increasingly popular among these firms, with Reddit, Meta, Nike, Disney, and Coca-Cola all partnering with them. Adidas has also previously collaborated with Coinbase.
Coinbase new announcement follows previous news that it plans to introduce Base, an Ethereum layer-2 network that they anticipate will soon be the go-to platform for developers desiring to host decentralized applications.