UPDATED 12:05 EDT / MARCH 08 2023


Coinbase rolls out ‘Wallet-as-a-Service’ to help businesses onboard users to crypto

Cryptocurrency exchange Coinbase Global Inc. today announced a new “Wallet-as-a-Service” product that will allow developers and businesses to easily embed crypto wallets directly into their Web3 apps.

The rise of Web3 has brought on a rise in interest from businesses with the emergence of blockchain technology and decentralized economies. Digital assets built on Web3, such as nonfungible tokens, can represent things such as in-game items, loyalty tokens and virtual tickets.

Retailers have used NFTs as a way to engage users in loyalty programs by offering them rewards that can give them free merchandise, discounts, gated premium access and more. Starbucks Corp. has been testing out a program with its Odyssey loyalty rewards program, which provides in-store perks.

Coinbase called Wallet as a Service a “powerful tool for companies looking to tap into the potential of Web3,” whether they’re enabling gamers to trade in-game items and currency or creating new avenues for loyalty programs such as token-based rewards.

Storing and interacting with these digital assets can be a burden for both developers and users because they are stored in crypto wallets, which often require advanced knowledge or third-party apps for maintaining the assets. Wallet apps can be difficult to understand, require complex codes to protect crypto assets, and pose a barrier to user adoption.

By using Coinbase’s new Wallet as a Service product, companies can easily integrate scalable, secure wallets directly into their apps without the need for these complexities. The product allows developers to customize on-chain wallets for their end users and allow them access with simple username and password pairs.

Many other wallets require users to recall complex 24-word seed phrases for recovery, as well as long, complicated wallet addresses that are 26 to 35 random characters long for receiving and transferring assets, and that can become extremely cumbersome. By allowing developers to do away with this and reduce the complexity of the wallet within their own apps, they allow users to enjoy their experience in the app.

Because the wallet service integrates with Coinbase, users will not need to worry if their device is compromised. Coinbase WaaS is powered by multiparty computation cryptography, which means that the assets stored on the device are still protected by Coinbase. The company also offers automatic backups with MPC, which means that even if the device is lost or stolen, the key to their Web3 wallet remains safe and can be securely stored.

Web3 companies have already begun to build with the Coinbase WaaS including NFT portfolio tracker Floor, Web3 development framework Thirdweb, play-to-earn blockchain game Moonray and privacy-centric ownership proof app Tokenproof.

“Tokenproof is on a mission to make Web3 more accessible to a new wave of users,” said Alfonso “Fonz” Olvera, founder and chief executive of Tokenproof. “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 launch continues Coinbase’s ongoing outreach to developers and businesses. In February, the company announced Base, an Ethereum Layer 2 blockchain network designed as a developer-friendly way to allow builders to rapidly deploy low-cost, scalable Web3 decentralized apps.

Image: Coinbase

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