Coinbase launches smart and embedded wallets to streamline Web3 development

Leveraging MPC technology, these innovations address developer challenges and enhance user experience

Coinbase has launched two new wallet solutions aimed at simplifying the development of Web3 applications. 

These new features, designed with keeping developers in mind, focus on seamless integration and efficient balance transfer across Ethereum Virtual Machine (EVM) compatible applications, marking an important step in onboarding developers to its layer-2 blockchain, Base.

The first of these solutions is a smart wallet that empowers users to carry their balances across different EVM-compatible applications seamlessly, thanks to the integration with the Coinbase Wallet SDK.

This feature has addressed a common challenge in the Web3 space, where users frequently have to navigate cumbersome processes to manage their assets across various platforms. By enabling a more fluid transfer of balances, Coinbase is significantly enhancing the user experience within the Web3 ecosystem.

The second innovation is an embedded wallet that allows developers to incorporate noncustodial, white-labeled wallets directly into their applications.

This feature is particularly noteworthy as it offers developers the ability to offer a more integrated and branded experience to their users, without the complexities traditionally associated with developing digital wallet technology from scratch.

The expansion of the company’s wallet-as-a-service product line is a strategic move that leverages the company’s expertise in digital wallet technology. By providing APIs that enable DApps to create wallets on behalf of their users in a native manner, Coinbase is eliminating the need for users to rely on external applications or Chrome extensions, thereby streamlining the user experience.

Both Coinbase and other industry players like BitGo have also adopted multiparty computation (MPC) technology to power their wallet services. MPC technology allows for secure computations and transactions without the need for smart contracts, operating entirely off-chain.

This approach ensures that private data remains confidential among participants, enhancing the security and privacy of digital transactions.

Coinbase’s decision to focus on MPC technology, while moving away from native Bitcoin support in its merchant payment platform, reflects the company’s strategic emphasis on developing advanced solutions for the EVM ecosystem.

This shift underscores the challenges and opportunities in aligning cryptocurrency payment protocols with the evolving landscape of Web3 and blockchain technology.