Coinbase Launches Smart Wallets To Simplify Crypto Onboarding

Aimed at simplifying the often cumbersome and expensive process of entering the crypto market, these wallets promise to eliminate high fees and complex procedures typically associated with traditional crypto wallets. With this innovative solution, Coinbase is poised to onboard over a billion users by providing simplified gasless transactions and multi-chain support.

What Are Smart Wallets?

On June 5, 2024, Coinbase launched its “smart wallets” campaign, designed to offer users a smooth transition to blockchain operations. These wallets integrate seamlessly with a wide array of applications and support multiple networks, including Base and Ethereum. Coinbase asserts that smart wallets significantly reduce barriers like network fees and the need for recovery phrases, making the onboarding process as simple as logging into a website.

Simplified and Cost-Effective Onboarding

The introduction of smart wallets addresses the primary challenges of slow and costly onboarding. By offering a user-friendly experience, smart wallets have the potential to bring a large number of users on-chain quickly and economically. This ease of use is expected to attract a diverse range of users, from crypto novices to seasoned investors.

How Do Smart Wallets Work?

Smart wallets eliminate the need for traditional seed phrases, opting instead for a passkey system. Passkeys, commonly used on smartphones and other devices, leverage public key cryptography to enhance security and simplify processes like logging in. This system allows for the immediate creation of wallets and facilitates features such as direct payments from Coinbase balances.

Coinbase is actively encouraging wallet developers to adopt smart wallets through initiatives like the Base Gasless Campaign, which offers up to $15,000 in gas credits. This campaign aims to foster a more inclusive and accessible crypto ecosystem.

Key Benefits of Smart Wallets

1. Instant Wallet Creation and Onboarding: Users can create new wallets and get onboarded within seconds, without needing to leave the application they wish to use. This eliminates the need for extensions, apps, or complicated recovery phrases.

2. Enhanced Security and Convenience: With smart wallets, users can leverage Face ID, fingerprint recognition, Yubikey, or even their Google Chrome profile for authentication. This ensures a secure and straightforward start to their crypto journey.

3. Seamless Payment Options: Users can make payments directly from their custodial wallet balances or Coinbase account balances, avoiding the common issue of insufficient funds.

4. Cross-App Portability: Smart wallets offer cross-app portability, enabling users to transfer their wallet, identity, and balances across popular on-chain applications. This enhances the user experience by providing consistent access to their assets and identity.

5. Gasless Transactions: Developers can offer gasless experiences and sponsor transactions through Paymaster integrations, making the overall process more cost-effective for users.

6. Comprehensive Web App: Coinbase provides a companion web app featuring asset and identity management, buy/sell/swap/send NFTs, and transaction history. This app further simplifies the management of crypto assets.

Supported Networks and Applications

At launch, smart wallets will support leading on-chain applications and networks, including Base, Ethereum, Optimism, Arbitrum, Polygon, Avalanche, BNB, and Zora. This extensive support ensures that users can interact with a wide range of blockchain ecosystems, enhancing the utility and appeal of smart wallets.

Coinbase’s introduction of smart wallets marks a significant advancement in the crypto industry, addressing the key pain points of high fees and complex processes. By offering a user-friendly, secure, and cost-effective solution, Coinbase is set to revolutionize the crypto onboarding experience and attract a broader user base. The potential for smart wallets to simplify blockchain operations and enhance user accessibility positions Coinbase as a leader in the evolving crypto landscape.

With its ambitious goal of onboarding over a billion users, Coinbase’s smart wallets could very well be the catalyst that propels widespread adoption of cryptocurrency. As the crypto ecosystem continues to grow, innovations like smart wallets will play a crucial role in making blockchain technology accessible to everyone.