Coinbase has launched a new product called Wallet-as-a-Service (WaaS), which enables companies to create fully customizable web3 wallets within their own apps. The product aims to simplify wallet onboarding and user experience in the web3 space.
Simplifying web3 wallet onboarding
Web3 offers brands opportunities to create new revenue streams and enhance user engagement. However, wallet complexity remains a significant challenge for web3 adoption. Wallets require seed phrase backup recovery and have unintuitive UIs, which discourages users from interacting with web3 brands.
Coinbase’s Wallet-as-a-Service aims to simplify web3 wallet onboarding and provide a seamless experience for users. The product enables companies to build native wallets into their applications, avoiding the need for users to interact with external wallets.
Multi-Party Computation
The Wallet-as-a-Service allows users to access web3 without setting up a 24-word recovery phrase. Instead, users can access web3 using Multi-Party Computation (MPC), which improves existing multi-sig techniques. The MPC effectively splits wallet keys between the user and Coinbase, making it difficult for hackers to steal the keys, even if a device becomes compromised.
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MPC wallets are also natively cross-chain, offer cheaper transaction fees, provide more user privacy, avoid smart contract risks and are interoperable with ecosystem standards. If a user loses access to their device, the key to the web3 wallet remains safe and can be securely restored. Coinbase can lock a wallet if a user notifies it, preventing it from being used to sign transactions.
Several companies, including Floor, Moonray, Thirdweb, and Tokenproof, have already started using Coinbase’s WaaS to onboard web3 users across gaming, token-gated events, and digital marketplaces. The product allows individuals to interact with web3 brands without having prior knowledge of how the blockchain works.
According to Tokenproof CEO Alfonso Olvera, WaaS is a significant step towards making the web3 space more approachable and accessible.
