Coinbase Launches WaaS to Simplify Adoption of Web3 Wallets
Coinbase, a leading cryptocurrency exchange, has unveiled Wallet-as-a-Service (WaaS), a new business solution that simplifies the adoption of Web3 wallets. WaaS provides enterprises with a technical infrastructure to create and launch customizable on-chain wallets via a wallet application programming interface (API). The API enables businesses to develop wallets for simple customer onboarding, loyalty programs, and in-game purchases.
Web3 wallets have struggled to gain wider mainstream acceptance due to their complexity, poor user experience, and the challenges of maintaining mnemonic seeds. Coinbase's WaaS solves these complexities by providing end-to-end product experience control, reducing implementation cost and complexity, and improving security while reducing risks.
Patrick McGregor, the head of product at Coinbase's Web3 Developer Platforms, explained that WaaS avoids the key loss issues that plague traditional self-custody platforms with its MPC cryptographic functionality. The WaaS toolkit includes MPC, a form of cryptography that allows multiple parties to jointly compute a function without revealing their inputs to each other. MPC enhances private key security within Web3 platforms, as it splits users' private keys into multiple parts and distributes them among the protocol's parties involved.
Companies such as Floor, Moonray, thirdweb, and tokenproof are currently using Coinbase's WaaS infrastructure. The introduction of WaaS by Coinbase comes amid the current crypto winter, as startups, corporations, and investors seek to define the future of the decentralized internet. Although not everyone is convinced that current Web3 modalities advance the principles of decentralization, developments around MPC and decentralized privacy suggest that many in the industry are taking it seriously.
McGregor noted that many companies are "building for Web3 ahead of the next bull market," a period where cryptocurrency prices generally rise. Coinbase is "seeing strong excitement about token-gated content (for both online opportunities and physical real-world use cases), moving loyalty programs on-chain, deep integrations between games and assets owned by users, and more." With the introduction of WaaS, Coinbase aims to streamline the adoption of Web3 products and services, paving the way for broader mainstream acceptance of Web3 wallets.