Coinbase has introduced “smart wallets” to simplify the crypto onboarding process by eliminating high fees and complex processes generally associated with traditional crypto wallets.
Coinbase hopes to onboard over a billion users by offering simplified gasless transactions and multi-chain support through the new offering.
Smart Wallets
Coinbase introduced the “smart wallets” campaign on the 5th of June, 2024, promising a hassle-free transition to blockchain operations by integrating with a host of applications and offering support for networks such as Base and Ethereum. According to Coinbase, smart wallets significantly lower the barriers such as network fees and recovery phrases. Coinbase stated in its announcement,
“Today, we’re launching the next evolution of self-custodial wallets. Smart wallets are a revolutionary step forward in our mission to bring more than 1 billion users on-chain. These next-generation wallets address the biggest pain points of the crypto experience today—complex onboarding, network fees, and recovery phrases—making the transition to on-chain smoother than ever.”
According to Coinbase, the simplicity offered by smart wallets, along with multi-chain support and integration with applications, will make onboarding to blockchains as simple as logging into a website. Onboarding has generally been slow and expensive. Thanks to their ease of use, smart wallets can bring more users on-chain quickly and inexpensively.
“Until now, going on-chain has been slow, expensive, and hard, with separate wallet app installs and first-generation blockchains. Smart wallets, with their ease of use, paired with next-generation Layer 2 networks like Base, finally set the stage to bring many more people on-chain. Now, getting on-chain is easy, fast, and cheap.”
How Do Smart Wallets Work?
Smart wallets don’t require a traditional seed phrase. Instead, they rely on a system that utilizes passkeys. Passkeys, generally used on smartphones and other devices, use public key cryptography to significantly boost security while simplifying other processes, such as logging in. Smart wallets also facilitate the immediate creation of wallets and features such as direct payments from Coinbase balances.
Coinbase is promoting the adoption of smart wallets among wallet developers with initiatives such as the Base Gasless Campaign, which provides up to $15,000 in gas credits.
Key Benefits
Coinbase’s smart wallets offer a host of benefits. Users can create a new wallet and onboard in seconds without leaving the app they wish to use. They also don’t have to worry about extensions, apps, or complex recovery phrases. Instead, they can use Face ID, fingerprint, Yubikey, and even their Google Chrome profile and get started instantly. Smart wallets also allow users to pay with their custodial wallet balances or Coinbase account balances, eliminating insufficient balance errors.
Another benefit is cross-app portability, allowing users to transfer their wallet, identity, and balances across popular on-chain apps. Developers can also offer gasless experiences and sponsor transactions via Paymaster integrations. Coinbase is also offering a companion web app with features such as asset and identity management, buy, sell, swap, and send NFTs, and transaction history.
At launch, smart wallets will support leading on-chain apps, including Base, Ethereum, Optimism, Arbitrum, Polygon, Avalanche, BNB, and Zora.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
