Founded in 2012, Coinbase stands as one of the oldest crypto companies, boasting more than 100 million registered users. Known for its user-friendly interface and strong reputation, Coinbase has been a gateway for countless individuals entering the centralized finance (CeFi) realm of crypto.
Now, expanding its focus, Coinbase aims to guide its users into the decentralized finance (DeFi) sector, aiming to introduce them to the unfiltered world of DeFi.
Coinbase’s Push into DeFi with Ethereum Layer 2 and Smart Wallet
Last August, Coinbase made a significant move by launching its own Ethereum Layer 2 solution. This initiative has propelled Coinbase into the ranks of the top Ethereum chains, with nearly $1.8 billion in total value locked, according to DefiLlama. In May alone, Coinbase’s Layer 2 generated approximately $7 million in onchain profit, significantly outpacing competitors like Optimism, which generated around $1.5 million during the same period. March and April also saw impressive figures, with Coinbase’s Layer 2 bringing in nearly $17 million and $14 million respectively.
For many newcomers to the crypto space, seed phrases and gas fees are major obstacles when trying to access DeFi platforms like Coinbase’s Layer 2. The responsibility of safeguarding a 12 or 24-word seed phrase can be daunting, deterring potential users from diving deeper into crypto. Fluctuating gas prices and transaction failures further compound these challenges, pushing many to stick with centralized exchanges in CeFi.
In response to these barriers, Coinbase has introduced a new smart wallet designed to simplify the onchain experience. This smart wallet aims to streamline interactions with DeFi protocols, making it easier for users to manage their assets securely and efficiently. By lowering the entry barriers, Coinbase hopes to onboard the next billion users onto the blockchain, democratizing access to decentralized finance and expanding the reach of cryptocurrency adoption.
Coinbase Launches Smart Wallet to Simplify Onchain Crypto Access
Coinbase unveiled its new smart wallet on Wednesday, revolutionizing how users interact with decentralized finance (DeFi). One of the standout features is the ability for users to directly fund the smart wallet from their Coinbase account, eliminating the need to hold a chain’s gas token for transactions. This enhancement aims to streamline the user experience by making wallet creation nearly instantaneous, even allowing creation while interacting with supported applications. Security for the smart wallet is bolstered by Passkeys, utilizing methods like Apple’s Face ID, Google Chrome profiles, Yubikey, or fingerprint authentication.
In a bid to encourage integration with applications, Coinbase is offering gas credits of up to $15,000 to incentivize developers. This initiative ensures that smart wallet users initially incur no gas fees when using integrated applications. At launch, the smart wallet supports a range of blockchains including Ethereum, Base, Optimism, Arbitrum, Polygon, Avalanche, BNB, and Zora, with plans to expand support to additional blockchains in the future.
Coinbase’s initiative to launch the smart wallet comes as part of its strategy to onboard the next billion users into the crypto space. With over a decade of credibility as a publicly traded company and a robust infrastructure, Coinbase aims to lower barriers to entry for newcomers. The introduction of the smart wallet marks a significant milestone in making onchain crypto more accessible than ever before, potentially paving the way for widespread adoption of decentralized finance.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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