Coinbase Introduces Wallet-as-a-Service (WaaS) to Simplify Web3 Onboarding

Coinbase, the US-based digital currency exchange and brokerage company, has launched Wallet-as-a-Service (WaaS), a new product that enables companies to create fully customizable web3 wallets within their own apps. The product offers users a seamless onboarding experience, similar to web2 applications, while avoiding the mnemonic requirements and counterintuitive UIs associated with traditional wallets.

The Importance of WaaS

WaaS enables companies to create native wallets within their own applications, providing a more streamlined experience for users without redirecting them to any external app. Using Multi-Party Computation (MPC), WaaS allows users to access web3 without setting up and securing a 24-word recovery phrase, making it more accessible and user-friendly than traditional wallets.

How it Works

WaaS is a set of secure and scalable APIs that abstract away the complexities of blockchain infrastructure, providing access to web3 wallets with the ease of use of web2. Users can create, access and restore wallets with authentication as simple as a username and password. MPC technology helps keep user assets secure by splitting, encrypting and distributing keys among multiple parties, making theft of the key extremely difficult.

WaaS also provides cross-chain functionality, cheaper transaction fees, more user privacy, avoidance of smart contract risks and interoperability with ecosystem standards, according to Patrick McGregor, Head of Product for Web3 Developer Platforms at Coinbase.

The Design of WaaS

The design of WaaS enables the key to the web3 wallet to remain secure even if a user loses access to their device. If a user notifies Coinbase, the company can lock a wallet, preventing it from being used to sign transactions.

The product has been welcomed by companies like Floor, Moonray, Thirdweb and Tokenproof, who have begun using WaaS to onboard web3 users across gaming, token-gated events and digital marketplaces. According to Tokenproof CEO Alfonso Olvera, this is a huge step towards making the space more approachable and accessible.

Coinbase’s WaaS initiative comes just two weeks after launching its own Ethereum Layer 2 network, dubbed Base, in February.

Source: The Block