Exploring Coinbase’s wallet-as-a-service vis-à-vis Web3
Web3 or crypto wallets are digital or physical devices that help users access, store, and manage their private keys allowing access to cryptocurrencies and other blockchain-based assets. They give users a unique set of cryptographic keys- public and private along with a public address.
These wallets are complex; although they store digital assets, help facilitate transactions, and act as a digital identity for users, they have complex mnemonic seeds and counterintuitive user interfaces that make them difficult to access for a new user. While they have a secure interface, heavy jargon, and technicalities make them difficult to use.
Coinbase recently launched the Wallet-as-a-service (WaaS) Web3 business solution as part of its mission to help companies bring about mass adoption. The platform has always functioned with the mission of empowering developers with APIs and services that would help bring in new users into the space.
While Base gives users a secure, low-cost, developer-friendly Ethereum L2 built, WaaS takes up the idea of XaaS (Anything-as-a-service) and applies it to digital wallets. XaaS is a term used to collectively define the delivery of anything as a service consisting of tools, products, and technologies over the internet or a network. Other examples of Xaas include Saas (Software-as-a-service), IaaS (Infrastructure-as-a-service), and PaaS (Platform-as-a-service).
Simplifying digital wallets with XaaS
WaaS is a scalable and secure set of wallet infrastructure APIs that would help companies create and deploy fully customizable on-chain wallets for their end users. WaaS provides companies and key players in the crypto and web3 space with a powerful tool that enables a wide range of services from trading in-game items and currency to making new avenues for loyalty programs like token-based rewards.
Wallets can be offered directly to users in apps with an easy onboarding process involving just a username and password creation. Even for users who are new to the Web3 space, this is an easy transition from Web2.
With complete autonomy of their assets, wallets that are deployed using WaaS deploy MPC or multi-party computation providing an added level of security. MPC divides, encrypts and distributes a user’s keys among various parties, this development helps users who are otherwise left on their own to manage their keys. They also have control over assets and an option to export their keys off the platform.
Onboarding a whole new class of users
Companies in the crypto space often need help with the creation of gateways to web3, this requires copious amounts of time, money, expertise, and resources. Coinbase is helping these key players with this colossal task so that they can focus on other important things.
Coinbase’s APIs are built to aid companies to integrate their wallets into their applications maintaining a user experience that is cohesive and avoids the hassle of redirecting to a separate website/app. The wallet would support not just thousands of different coins but also a range of decentralized apps. The platform will also support DeFi liquidity pools that would let users borrow or supply crypto, join DAOs, and swap assets on decentralized exchanges.
Coinbase is determined on its mission to get Web3 into newer markets and onboard more users in 2023, the wallet-as-a-service is a step towards this mission. The platform also offers trading APIs, Wallet SDK, and a fiat-on-ramp through Pay SDK.