Coinbase, the largest cryptocurrency exchange in the U.S., has unveiled “Wallet as a Service” (WaaS) – a new wallet that seeks to onboard institutions and billions of users globally to Web3.
Announcing the move on March 8, the company noted that the wallet will help eliminate the barriers associated with conventional crypto wallets when accessing web3 services, such as the “complex mnemonic seeds and counterintuitive User Interfaces.” To do this, WaaS will enable companies to create and deploy fully customizable onchain wallets to their end users, simplifying the often complex process of onboarding users.
Conventional crypto asset wallets often require complicated 24-word recovery phrases, which could mean parting with one’s assets for good if lost. As per the announcement, WaaS will eliminate that risk by automatically backing up self-custody keys through the so-called Multi-Party Computation (MPC) cryptographic technology.
“Coinbase’s Wallet as a Service (WaaS) offers a solution to the complex nature of web3 wallets, enabling companies to provide their users with safe, secure, and easy access to web3 wallets,” said Coinbase.
“In a world where wallets are simple, companies can finally build web3 experiences accessible to everyone regardless of technical knowledge. Companies can offer their users wallets directly in their apps with onboarding as simple as a username and password,” it added.
WaaS joins a list of other Web-3 focussed products by Coinbase, including its native fiat on-ramp solution through Pay SDK, trading APIs, Wallet SDK, and other resources.
As Web3 continues to develop, companies are investing heavily to capitalize on its potential and create a thriving industry that better meets the needs of its customers. In the past year or so, thousands of companies and individuals have leveraged the sector’s immersive capabilities to create and showcase products such as games and digital assets as well as sell their merchandise to customers. A recent report shows that the global web3 market size is projected to grow by over 11 times to surpass $38 billion by 2029.
Yet, despite the massive demand for services and products in Web 3, companies face problems such as security, scalability and key management, which often render customer onboarding processes difficult. Hence, this gap has created an opportunity for companies such as Coinbase, which promises to provide providing safe, reliable, and easy-to-use access to web3, allowing onboarding companies to concentrate on their core operations.