Coinbase Introduces Embedded and Smart Wallets for Developers
Coinbase is expanding its crypto wallet service as a solution, targeting the challenges developers face when creating Web3 applications. The exchange is developing two new wallet solutions focused on integration and transferring balances across Ethereum Virtual Machine (EVM) compatible applications, aiming at developers on its own Layer 2 blockchain, Base. Among the new features, a smart wallet allows users to carry their balances across various EVM-compatible apps integrated with the Coinbase Wallet SDK. Another feature is an embedded wallet that enables developers to include branded, non-custodial wallets within their own applications.
According to Coinbase, both features are designed to minimize developers’ headaches concerning user experience while building Web3 products. “We’ve learned a lot from our customers over the past year and worked hard to improve the product experience across all our services, and where we’ve landed is with embedded wallets,” said Yuga Kohler, Senior Engineering Manager at Coinbase Embedded Wallets, to CoinTelegraph. “So, this has really been an ongoing effort over the past year.”
This move extends Coinbase’s wallet as a service line, a model allowing developers to integrate digital wallets into their applications without needing to develop core technology from scratch. This solution aids companies looking to incorporate digital assets into their products and offerings, contrasting with the self-custodial wallet model. “If you go to an app like Uniswap or OpenSea, you usually need to have a Chrome add-on or you need to visit it in your custodial app. So what we’re trying to do is provide APIs that allow these DApps to create wallets on behalf of their users, but still natively, so they don’t have to leave the DApp,” Kohler explained.
Coinbase’s wallet-as-a-service is a popular offering in the crypto space, with companies like BitGo providing similar custodial and non-custodial wallet services for corporations, supported by multi-party computation (MPC) technology. This allows multiple participants to compute a result based on their private data without revealing it to each other or a third party. Unlike smart contracts, MPC cryptography occurs entirely off-chain and is a protocol, with various MPC protocols available. “Coinbase has one that we use in-house,” said a Coinbase representative. Recently, Coinbase discontinued native Bitcoin support from its commercial payment platform, Coinbase Commerce, due to issues updating its EVM payment protocol for the digital currency.
