Coinbase is in the process of developing two new wallet solutions that are specifically focused on integration and balance transfer across Ethereum Virtual Machine (EVM) applications. These solutions are aimed at facilitating developers’ onboarding to Base, Coinbase’s layer-2 blockchain.
One of the new solutions is a smart wallet that allows users to transfer their balances to various EVM-compatible applications that are integrated with the Coinbase Wallet SDK. The second feature is an embedded wallet that enables developers to incorporate noncustodial white-labeled wallets into their own applications.
Coinbase has stated that both of these features are designed to address the pain points that developers often encounter when building Web3 products, with a particular emphasis on improving the overall user experience.
Yuga Cohler, the senior engineering manager at Coinbase Embedded Wallets, explained that the development of these embedded wallets has been an ongoing effort over the past year, driven by customer feedback and a desire to enhance the product experience.
This move by Coinbase expands its wallet-as-a-service product line, which is a model that allows developers to integrate digital wallets into their applications without having to build the core technology from scratch. This type of solution is beneficial for companies that want to incorporate digital assets into their own products and offerings.
Wallet-as-a-service is a popular offering in the crypto space, and other companies like BitGo also provide similar services that include custodial and noncustodial wallets for enterprises. Both Coinbase and BitGo use multiparty computation (MPC) technology to power their solutions. MPC technology allows multiple participants to compute a result based on their private data without revealing it to others or to external parties.
Cohler clarified that this technology does not utilize smart contracts and that the cryptography of MPC occurs entirely off-chain. Coinbase has its own MPC protocol that is used in-house.
In other news, Coinbase recently announced that it would no longer support native Bitcoin (BTC) on its merchant payment platform, Coinbase Commerce. This decision was made due to difficulties in delivering recent updates to its EVM payment protocol for the cryptocurrency.