Coinbase struck again with another honorary product — the Coinbase Smart Wallet. Unlike traditional self-custody wallets, which need to be downloaded or use a browser extension, this new type of wallet was designed to simplify users’ crypto experience.
As we know, self-custody wallets require more complex setup and management, which could overwhelm traders.
In today’s article, we discuss anything you need to know about the Coinbase Smart Wallet: what it is, how it works, and what’s in it for you as a Coinbase Wallet user.
So, let’s get started!
What Are Smart Wallets and How Do They Work?
A smart wallet is a type of crypto wallet that allows the use of smart contracts for account abstraction, enabling the same onboarding for native and new crypto users.
However, a smart wallet offers additional features, such as multi-signature transactions, auto-approvals, conditional transfers, and other more complex operations, as well as dApps interactions, thus making it more versatile than traditional crypto wallets that store private keys and sign transactions.
How does a smart wallet work? It relies on a single private key to access and make transactions based on users’ authorization.
Moreover, a few criteria are part of the smart wallet ecosystem, such as storage for users’ assets and logic as they execute codes based on certain rules, such as batching, authorization, transaction validation, etc.
They auto-manage and execute tasks based on different rules and conditions written within the smart contract, allowing users to perform multiple activities within the blockchain system, such as automatic payments, DeFi, and dApps interactions.
As we can see, smart wallets offer flexibility, drawing Vitalik Buterin’s attention.
What is Coinbase Smart Wallet?
In June 2024, Coinbase, the crypto exchange, launched its Smart Wallet. Coinbase Smart Wallet is a self-custody crypto wallet developed to offer ease of use to DeFi interaction for all Coinbase users. Thus, it mixes the simplicity of centralized wallets with the high security of self-custody.
From experience, when using a traditional crypto wallet, you must ensure the security of the recovery phrases.
However, Coinbase eliminates all the added hurdles, offering a more simplified crypto onboarding and boosting interoperability with major dApp integrations like PancakeSwap, Zora, Moonwell, and many others.
Coinbase Smart Wallet Feaures
Instant Onboarding
Now, you can create your Coinbase account in seconds without an app or browser extension since the Smart Wallet uses a passkey for signature.
These are generated and stored on users’ devices within iCloud, Google Password Manager, or others.
Free of Charge
The Coinbase Smart Wallet is free for developers and users.
Multi-Usage Account
The Coinbase Smart Wallet was designed to provide seamless access to onchain apps with the same smart account and address. Moreover, Coinbase aims to onboard 1 billion onchain users in the future.
Magic Spend
Smart Wallet users can sync their Coinbase account and spend their Ethereum within their Smart Account. This feature is currently available for Base.
Therefore, users can spend funds from their Coinbase account without transferring them.
Coinbase Smart Wallet supports 8 blockchain networks, and there will be more in the future. It allows users to buy, sell, swap, or send NFTs and crypto assets.
Supported Networks
- Base;
- Arbitrum;
- Optimism;
- Zora;
- Polygon;
- BNB;
- Avalanche;
- ETH mainnet.
How Does the Coinbase Smart Wallet Work?
The Coinbase Smart Wallet is a separate product of the mobile wallet and the extension. Thus, use the keys.coinbase.com portal and manage your digital assets at homebase.coinbase.com.
When discussing the passkey, it is essential to remember that they are safely stored within your passkey provider, such as Chrome, Apple, or other hardware like the YubiKeys one. Thus, passkeys are validated onchain via the open-source, audited smart contracts.
As a result, Coinbase Smart Wallet never holds your keys or has access to your funds.
Coinbase Smart Wallet vs. Traditional Wallets
As discussed, there are some differences between the Coinbase Smart Wallet and the traditional crypto wallet, and the main aspect is the private key.
Traditional wallets require a private key, while the Coinbase Smart Wallet uses a passkey that can be linked to your biometric identification, facial ID, or fingerprint.
Then, there’s the RFID protection, which smart wallets use. Thus, you prevent wireless or personal information theft.
The Coinbase Smart Wallet leads in terms of user experience. It was designed to be easy to use and does not require technical, blockchain, or crypto knowledge to get started, as with traditional crypto wallets.
Traditional wallets often rely on third-party apps when discussing additional features, compared to the Coinbase Smart Wallet, which streamlines the experience and even interacts with DeFi apps.
The Benefits of Coinbase Smart Wallet
The Coinbase Smart Wallet offers many benefits, such as the ease of use within the browser, with no browser extension or app needed. Instead, you get enterprise-grade security without complex seed phrases.
Use only one Smart Wallet and one address compatible with significant L2s and onchain apps. But let’s get into details and learn more about the benefits of the Coinbase Smart Wallet!
1. Easy to Integrate
As advised by Coinbase, you must update your Coinbase Wallet SDK by creating a new instance, setting up the parameters, and updating it. There are no third-party apps or other hurdles.
2. Quick Entry to Your Coinbase Balances
Coinbase Smart Wallet users can see, manage, and change their Coinbase balance without making complex transactions to other self-custody wallets.
3. Passkey Onboarding
Did you know you do not need any knowledge to use or start with the Coinbase Smart Wallet? That’s right, as the onboarding is done in just a few seconds through the passkey. Thus, no passwords, seed phrases, or 3rd party app installs.
So, as you can see, the Coinbase Smart Wallet simplifies the entire process, offering free gas credits on Base with the help of the Coinbase Developer Platform.
How to Set Up and Use Coinbase Smart Wallet
We think it’s time to set up our Coinbase Smart Wallet, and what better way than a step-by-step tutorial?
Step 1: Go to the official Coinbase website
Click on the Create Wallet button.
Step 2: Use your fingerprint, face ID, or biometric identification
This way, you’ll create your passkey and keep it, in our case, within the iCloud Keychain, which is only available for macOS users.
However, you can select the Windows Hello or external security key for Windows devices or your phone, tablet, or security key.
Step 3: Start trading on your Coinbase Smart Wallet
Simple, right? You can now buy, receive, and swap your favorite cryptos using Coinbase’s Smart Wallet.
From your dashboard, you can locate all the features on the left-hand side of the screen, as well as the settings on the top right side, as seen below.
Coinbase Smart Wallet FAQ
When is the Coinbase Smart Wallet coming out?
The Coinbase Smart Wallet was launched on June 5, 2024, and the company constantly works to improve it.
What is Coinbase Smart Wallet?
Coinbase Smart Wallet is a self-custody crypto wallet developed that mixes the simplicity of centralized wallets with the high security of self-custody. Thus, it offers ease of use to DeFi interaction for all Coinbase users.
How do I get the Coinbase Smart Wallet?
Anyone can use the Coinbase Smart Wallet by visiting wallet.coinbase.com and creating a new wallet or connecting their existing wallet in seconds.
How to use Coinbase Smart Wallet?
Once you connect your wallet or create a new one from your dashboard, you can buy, swap, or send your favorite cryptos. To buy, simply press on buy; you’ll need to fund your account if you still need to do that and follow the on-screen indications. You must choose the crypto, enter the amount and smart wallet address, and continue to your Coinbase account.
If you want to send cryptos, just click on the Send button, enter the amount, and choose the wallet address of your Coinbase Smart Wallet. Then, verify your wallet address and other details, such as the network fees.
It’s also easy to swap tokens. Click on the Swap button, select your available asset, and select the asset that needs to be swapped, and you’re done. As always, check the slippage tolerance.
Final Thoughts
As we saw, the Coinbase Smart Wallet offers a compelling solution for all its users seeking a balance between security and convenience.
Its user-friendly interface, robust security features, and seamless integration with DeFi platforms present a promising option for crypto newcomers and experienced traders.
What features are most appealing to you?
