Quick take:
- Coinbase has expanded its web3 business with a Wallet-as-a-Service product for businesses.
- The new solution allows companies to build fully customisable on-chain wallets for their customers.
- Companies will be able to offer users wallets through their apps by simply using a username and password.
Coinbase has announced its latest product, Wallet-as-a-Service (WaaS), created to help companies bridge their customers to web3. The crypto exchange company describes WaaS as a scalable and secure set of wallet infrastructure APIs, enabling companies to create and deploy fully customizable on-chain wallets to their end users.
Coinbase claims its WaaS infrastructure APIs could help solve one of the Web3 industry’s biggest problems. “One major challenge is the complexity of web3 wallets, which store digital assets, facilitate transactions, and act as users’ digital identity,” it wrote, adding that this in addition to crypto wallet’s “counter-intuitive UIs”, has made it difficult for users to harness benefits associated with web3.
With WaaS, companies will be able to create fully-customisable on-chain wallets linked directly to their apps, enabling users to create a wallet using only a username and password.
“Whether enabling gamers to trade in-game items and currency or creating new avenues for loyalty programs such as token-based rewards, WaaS is a powerful tool for companies looking to tap into the potential of web3.”
Although mainstream companies continue to face challenges pivoting to web3, they are widely becoming a viable avenue for onboarding new users.
Leading brands like Starbucks have teamed up with blockchain companies like Polygon to create NFT-based customer loyalty programs. Web3 experts believe that leveraging consumer-facing brands could help spur growth in the industry.
Cryptocurrency wallets require users to manage a 24-word recovery phrase, also known as a “seed phrase”. This can be cumbersome for non-crypto native users looking to invest in emerging web3 products like NFTs or joining blockchain gaming communities.
Coinbase says WaaS leverage Multi-Party Computation (MPC) technology to allow users to explore web3 without having to manage a complicated 24-word recovery phrase.
“MPC allows a ‘key’ to be split between the end user and Coinbase. Ultimately, this means that self-custody keys are safe even if a user’s device is compromised. Furthermore, advanced and automatic backup with MPC guarantees that even if an end user loses access to their device, the key to their web3 wallet is still safe and can be securely stored,” a statement on the Coinbase website reads.
The company said it has already onboarded the first builders to WaaS, which include the likes of Floor, Moonray, thirdweb, and Tokenproof.
Commenting on his company’s experience in using Coinabse WaaS, Fonz, the pseudonymous Founder of Tokenproof said: “Tokenproof is on a mission to make web3 more accessible to a new wave of users. Individuals will no longer have to come with knowledge of how the blockchain works in order to interact with the brands they love.”
“When users download the Tokenproof app, we’ll help welcome them into web3 by creating their first wallet, which will be powered by Coinbase. This is a huge step towards making the space more approachable and accessible and we’re excited by the opportunity to work with such a highly trusted partner.”
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