America’s largest crypto exchange Coinbase has rolled out Web3 application functionality including a hot wallet and browser for a limited set of its mobile app users.
The app will allow select users to access decentralized applications (DApps) on the Ethereum network such as Uniswap and OpenSea.
The May 17 announcement by Coinbase’s director of product management Rishi Dean said eligible users would be able to begin trading on nonfungible token (NFT) marketplaces, making swaps on decentralized exchanges (DEXs) and interacting with decentralized finance (DeFi) lending protocols to borrow and lend funds.
Along with the mobile browser that provides access to DApps, there is a hot wallet that customers can use to exchange funds. Unlike decentralized hot wallet apps such as MetaMask, the Coinbase hot wallet will have a co-custodial setup. This means that the private key for the wallet will be stored by the company and can be personally stored by the user.
The wallet and DApp functionality are operated with multi-party computation (MPC) technology, which secures the privacy of senders and receivers while ensuring the accuracy of a transaction.
Dean stated that sharing custody of the keys is a security feature designed to protect users from device-related problems. He wrote, “This means if you lose access to your device, the key to your Dapp wallet is still safe and Coinbase can assist in recovery through our live support.”
Coinbase’s expanded wallet functionality is promising for Web3 developers who may find it difficult to onboard new users to show off their work. The exchange boasts about 90 million registered users, according to Statista.
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This is the second major product rollout this month. The exchange launched its long-awaited Coinbase NFT marketplace on May 4 to a lackluster showing of just $75,000 in sales volume from just 150 transactions on its first day.
Coinbase’s Q1 earnings report show that the exchange is struggling during the down market by posting its first net loss since going public last year. Revenue dropped 27% to $1.1 billion from $1.6 billion year-on-year since Q1 2021, while monthly users fell from 11.4 million in Q4 2021, to 9.2 million.