Coinbase Launches Seedless Smart Wallets to Bring Crypto to the Masses

Traditionally, crypto wallets have required users to manage seed phrases, long mnemonic recovery strings that must be backed up and secured. That complexity has long been a major obstacle for onboarding mainstream users. Coinbase’s smart wallet instead generates private keys via passkeys built into modern devices, such as Face ID or fingerprint unlock on smartphones, or a Chrome profile. This makes wallet creation near‑instantaneous, secure, and familiar for users and eliminates the need to record or store a seed phrase.

The passkey is securely stored on the user’s device or a passkey provider (e.g. Apple, Chrome, 1Password, or YubiKey), and is cryptographically validated on‑chain via audited smart contracts. Coinbase emphasizes that it never holds the keys or can access funds, a key distinction for self‑custody wallets.

Another friction point Coinbase addresses is gas fees. Through its integration with the Base layer‑2 network and its Developer Platform, Coinbase allows developers to sponsor gas fees on behalf of users. This “gasless” experience removes one more barrier for new crypto users, particularly when interacting with small transactions on dApps.

Smart wallets also offer cross‑app portability: a single wallet address can be used across multiple dApps and supported layer‑2 networks, including Base, Ethereum, Optimism, Arbitrum, Polygon, Avalanche, BNB Chain, and Zora with Coinbase Wallet SDK integration.

The rollout began in February 2024, when Coinbase announced both its smart wallet and embedded wallet solutions, noting that developers could begin testing on testnets immediately. Integration is seamless: developers already using Coinbase Wallet SDKs or popular frameworks like RainbowKit and Wagmi can enable smart wallets by updating a version number or adding just a few lines of code.

To incentivize integration, Coinbase is offering gas credits, as much as US $15,000, for early adopters as part of its Base Gasless Campaign and On‑Chain Summer initiatives. This helps bootstrap usage and developer adoption.

Coinbase frames the smart wallet launch as central to its broader strategy of mass adoption. The company believes simplifying onboarding, removing seed phrases, gas friction, app installs, and onboarding delays, is a foundational step toward onboarding one billion users onto blockchain networks.

Echoing this, industry commentators have suggested that smart wallets could mirror the iPhone’s impact, introducing millions of casual users to on‑chain apps by hiding complexity and delivering a user‑friendly experience.

Notwithstanding its user‑friendly design, the smart wallet model has drawn scrutiny. Some critics note that relying on cloud or device‑based passkey backups may introduce centralization risks, especially in a community that values trustless architecture. Unlike traditional seed‑phrase wallets, users cannot export or save a recovery phrase manually. This raises questions about device loss, backup integrity, and dependence on passkey providers.

Coinbase acknowledges that smart wallets may not be suitable for large holdings or high‑value assets. It recommends users maintain separate, more trustless wallets, such as hardware or multi‑party wallets, for significant holdings.

As of mid‑2024, Base, the layer‑2 network developed by Coinbase, already attracted over ten million users. Protocols like Moonwell on Base have partnered in early integration efforts, enabling users to interact with DeFi features without paying gas fees. The smart wallet rollout appears designed to expand this usage further across a spectrum of application areas: DeFi, gaming, creator platforms, token tipping, and remittance tools.

With smart wallets now live in mainnet beta, the key questions are adoption and retention: will mainstream users opt in? Will developers integrate smart wallets at scale? And will Coinbase’s belief, that simplifying wallet onboarding unlocks mass-market crypto, prove accurate?

If successful, Coinbase could shift from a primarily exchange‑centric company to a foundational infrastructure provider in Web3, challenging peers like Alchemy, WalletConnect, MetaMask, and other “wallet as a service” platforms.

Coinbase’s smart wallet represents a bold bet on usability as the gateway to mainstream crypto. By eliminating seed phrases, streamlining gas fees, and offering seamless integration, Coinbase aims to bring blockchain to the masses. While trade‑offs remain, especially around backup centralization, its launch marks a watershed moment in efforts to marry web‑style convenience with self‑custody crypto control.