Cryptocurrency exchange Coinbase is launching a smart wallet, aiming to provide users with greater convenience through simplified onboarding, the elimination of gas fees, and the removal of recovery phrases. The new Coinbase Wallet is designed to overcome the complexity often associated with traditional crypto wallets.
Simplifying the User Experience
The smart wallet will enable users to create a new wallet and onboard onto a blockchain without the need to download a new app or generate a new recovery phrase. Instead, the smart wallet will integrate with major apps and use biometric methods like Face ID, users’ Google Chrome profile, fingerprint ID, or Yubikey to onboard through a passkey stored on users’ devices.
The smart wallet offers self-custody and permits payments from the user’s Coinbase Wallet or Coinbase account. Developers will have the option to waive gas fees by sponsoring the transaction through a paymaster.
| Feature | Description |
|---|---|
| Onboarding | No need to download a new app or receive a recovery phrase; integrates with major apps and uses biometric ID |
| Self-Custody | Allows users to manage their own funds |
| Gas Fee Waiver | Developers can choose to sponsor transactions, eliminating gas fees for users |
| Primary Platform | Companion web app for asset and identity management, buying, sending, swapping, NFTs, and transaction history |
| Supported Networks | Base, Ethereum, Optimism, Arbitrum, Polygon, Avalanche, BNB Chain, Zora |
| Availability | Free for both users and developers |
The primary platform for the smart wallet will be a companion web app that offers asset and identity management, buying, sending, swapping, non-fungible tokens (NFTs), and transaction history. Coinbase promises “a fluid and intuitive experience” throughout these transactions.
Network and Compatibility
At launch, the smart wallet will support multiple networks including Base, Ethereum, Optimism, Arbitrum, Polygon, Avalanche, BNB Chain, and Zora. The smart wallet will be free for both users and developers. According to a post on Coinbase’s Canadian blog:
“This simplicity, combined with multi-chain support and integration with major applications, will make onboarding to the blockchain as effortless as signing into your favorite website.”
Current users will be able to access the new wallet “in the coming months” after all migration tools are finalized. This seamless transition aims to make it easier for users to adopt the new wallet without any significant disruptions.
Evolution of Smart Wallet Technology
Smart wallet technology is not a new concept. Loopring and Argent pioneered the technology in 2020, and Ethereum developer Vitalik Buterin endorsed the idea the following year, praising its “social recovery” features that enhance security and eliminate the need for recovery phrases.
The breakthrough technology for smart wallets on Ethereum, known as “account abstraction,” debuted with the ERC-4337 standard in March 2023. In a June 2023 blog post, Buterin reiterated the advantages of smart wallets, emphasizing their security and user-friendliness.
Coinbase began offering smart wallets to developers in March, setting the stage for broader adoption and innovation in the space.
The introduction of the Coinbase smart wallet could significantly impact the way users interact with blockchain technology. By removing barriers to entry and simplifying the user experience, the smart wallet has the potential to attract a broader audience to the cryptocurrency space.
- User-Friendly Onboarding: No need for new apps or recovery phrases makes it accessible for new users.
- Elimination of Gas Fees: Developers can sponsor transactions, making it more cost-effective for users.
- Enhanced Security: Biometric IDs and the removal of recovery phrases enhance the security of user accounts.
- Multi-Chain Support: Compatibility with multiple networks increases the wallet’s utility and appeal.
Experts in the cryptocurrency space view the introduction of smart wallets as a significant step towards mainstream adoption. The simplified onboarding process and enhanced security features are expected to lower the entry barriers for new users, making it easier for them to engage with digital assets.
Vitalik Buterin’s endorsement of smart wallet technology highlights its importance in the evolution of blockchain applications. His emphasis on “social recovery” and account abstraction underscores the need for innovative solutions that address the complexities of traditional crypto wallets.
The launch of the Coinbase smart wallet represents a significant advancement in the cryptocurrency industry. By addressing common pain points such as complex onboarding processes and high transaction fees, Coinbase is setting a new standard for user-friendly and secure digital wallets. As the smart wallet technology continues to evolve, it is poised to play a crucial role in the broader adoption of blockchain technology and digital assets.
Featured image credit: Ivan Radic via Flickr