Coinbase, a prominent U.S. cryptocurrency exchange, has introduced its much-anticipated Smart Wallet. It aims to simplify entry into decentralized finance (DeFi) for new users. Coinbase first presented the concept of this Smart Wallet at ETHDenver in February. Unlike traditional recovery phrases, apps, and extensions needed for DeFi services, these new Smart Wallets employ industry-standard Passkeys and a companion web portal. Initially, these wallets work with networks like Base, Ethereum, Optimism, Arbitrum, Polygon, Avalanche, BNB, and Zora.
The wait is over. Smart wallets are here. pic.twitter.com/jtXUNu1dq3
— Coinbase Wallet 🛡️ (@CoinbaseWallet) June 5, 2024
Enhancing the DeFi User Experience
The Smart Wallets aim to address several challenges faced by new users in the DeFi space. According to Siddharth Coelho-Prabhu, senior director of product management at Coinbase, the traditional process of engaging with DeFi has been slow, expensive, and complex. It often requires separate wallet app installations and first-generation blockchains. The new Smart Wallet simplifies this by allowing users to create a wallet using Face ID, a Google Chrome profile, Yubikey, fingerprint unlock, or FaceID.
Streamlining Crypto Wallet Management
Additionally, the Smart Wallets resolve the fragmentation issue caused by managing multiple wallets for different crypto applications. Users can facilitate transactions using their Coinbase account balances or their self-custodial wallet balance. This makes the process more streamlined and user-friendly.
Encouraging Developer Integration
Coinbase encourages crypto developers to integrate the Smart Wallet into their applications. Incentives, such as up to $15,000 in gas credits through the Base Gasless Campaign and other On-Chain Summer contests, are offered. Coelho-Prabhu emphasized that integrating smart wallets is straightforward, requiring only a few lines of code. Popular crypto code libraries already support the system.
Gasless Transactions and Global Expansion
A notable feature of the Smart Wallets is the potential for gasless transactions through “paymaster” sponsorships. Developers or other parties cover user gas fees to provide services for free. This feature aligns with Coinbase’s broader vision to expand crypto usage globally. “Smart wallets are a revolutionary step forward in our mission to bring more than 1 billion users onchain,” Coelho-Prabhu stated.
