This month, Coinbase is quickly adding new products. Some users can now use its app to access DeFi and other Dapps on Ethereum.
Coinbase, America’s largest cryptocurrency exchange, has made Web3 app functionality, including a hot wallet and browser, available to a select group of its mobile app users.
Select users will be able to access decentralized apps (Dapps) on the Ethereum (ETH) network, such as Uniswap and OpenSea, through the app.
Rishi Dean, Coinbase’s Director of Product Management, announced on May 17 that eligible users would be able to start trading on nonfungible tokens (NFT) marketplaces, making swaps on decentralized exchanges (DEX), and interacting with decentralized finance (DeFi) lending protocols to borrow and lend funds.
Customers can exchange funds using a hot wallet in addition to the mobile browser that provides access to Dapps. In contrast to decentralized hot wallet apps like MetaMask, the Coinbase hot wallet will use a co-custodial setup. This means that the company will store the private key for the wallet, which the user can also keep.
The wallet and Dapp functionality are powered by Multi-Party Computation (MPC) technology, which protects senders’ and receivers’ privacy while ensuring transaction accuracy.
According to Dean, sharing custody of the keys is a security feature intended to protect users from device-related issues. “This means that if you lose access to your device, the key to your Dapp wallet remains safe, and Coinbase can assist in recovery through our live support,” he wrote.
Coinbase’s expanded wallet functionality looks promising for Web3 developers who may struggle to gain new users to showcase their work. According to Statista, the exchange has approximately 90 million registered users.
This is the second major product launch of the month. On May 4, the exchange launched its long-awaited Coinbase NFT marketplace, with only $75,000 in sales volume from 150 transactions on its first day.
According to Coinbase’s Q1 earnings report, the exchange is struggling during the down market, having posted its first net loss since going public last year. Since Q1 2021, revenue has dropped 27 percent to $1.1 billion from $1.6 billion years on year, while monthly users have dropped from 11.4 million in Q4 2021 to 9.2 million.
