Coinbase Introduces Smart Wallet with Zero Gas Fees and Simplified Onboarding

Cryptocurrency exchange Coinbase is introducing a smart wallet designed for enhanced user convenience. The new Coinbase Wallet eliminates gas fees and does away with recovery phrases, simplifying the onboarding process.

Users can create a new wallet and connect to a blockchain without downloading a separate app or managing a recovery phrase. The smart wallet integrates with major apps and uses Face ID, Google Chrome profiles, fingerprint ID, or Yubikey to authenticate via a passkey stored on users’ devices.

With self-custody features, the smart wallet supports payments from the user’s Coinbase Wallet or Coinbase account. Developers can opt to cover gas fees by sponsoring transactions through a paymaster.

A companion web app serves as the main platform, offering asset and identity management, buying, sending, swapping, nonfungible tokens, and transaction history. Coinbase guarantees “a fluid and intuitive experience” for all transactions.

Initially, the smart wallet will be compatible with the Base, Ethereum, Optimism, Arbitrum, Polygon, Avalanche, BNB Chain, and Zora networks. Both users and developers can use the smart wallet at no cost. Coinbase stated in a post on its Canadian blog:

“This simplicity, combined with multi-chain support and integration with major applications, will make onboarding to the blockchain as effortless as signing into your favourite website.”

Existing users will gain access to the new wallet “in the coming months” once all migration tools are completed.

Smart wallet technology has been around for a while, with Loopring and Argent leading the way in 2020. Ethereum developer Vitalik Buterin endorsed the concept in his blog the following year, highlighting the “social recovery” features that enhance security and remove the need for recovery phrases.

The groundbreaking technology for Ethereum smart wallets, known as “account abstraction,” was introduced with the ERC-4337 standard in March 2023. Buterin reiterated the benefits of smart wallets in a June 2023 blog post.

Coinbase started providing smart wallets to developers in March.