On March 8, 2023, Coinbase Global (Nasdaq: COIN) unveiled its latest addition to its suite of offerings: Wallet-as-a-Service (WaaS). The product is designed to bring the next hundred million consumers into Web3 through a seamless wallet-onboarding experience. It provides scalable, secure wallet infrastructure APIs that enable companies to build fully customizable onchain wallets without developing complex blockchain systems from scratch.
How WaaS Works
In a Twitter thread, Coinbase explained that WaaS is "a scalable and secure set of wallet infrastructure APIs, enabling companies to create and deploy fully customizable onchain wallets." By integrating these APIs, brands, gaming studios, and decentralized applications can quickly add wallet functionality, allowing users to store and manage digital assets with ease.
MPC Eliminates Seed Phrases
Key to WaaS is the use of multi-party computation (MPC) cryptography, which removes the need for users to manage a complicated 24-word recovery phrase. Traditional self-custody wallets often lead to asset loss if seed phrases are misplaced. MPC splits the private key into multiple fragments, enhancing security while simplifying user experience. Users can access their wallets through familiar authentication methods, drastically lowering barriers for newcomers.
Early Integrations
Coinbase revealed that several crypto firms are already using WaaS, including Tokenproof, Floor, Thirdweb, and Moonray. Fonz, founder of Tokenproof, stated: "When users download the Tokenproof app, we’ll create their first wallet, powered by Coinbase, to welcome them into Web3. This is a significant step towards making the space more approachable and accessible." These integrations demonstrate WaaS's potential to streamline user onboarding in real-world applications.
Expanding Developer Tools
Beyond WaaS, Coinbase offers developers a wallet SDK, payments SDK, Commerce API, and other blockchain integrations. Together, these tools form an ecosystem aimed at lowering the technical barrier for building Web3 applications. Coinbase noted that "more and more companies are realizing that Web3 will generate a massive industry of new decentralized applications and services, and they want to empower their customers to access it." Industry observers believe WaaS could become a critical bridge between traditional businesses and the Web3 world, especially for brands lacking in-house crypto expertise. By enabling seamless onchain experiences under familiar interfaces, WaaS may accelerate mainstream adoption of decentralized technologies.