Coinbase Launches Web3 Mobile DApp, DeFi Wallet and Browser

Coinbase, the largest U.S. cryptocurrency exchange, has launched Web3 app capabilities, including hot wallets and browsers for limited mobile app users.

The Web3 application will allow specific users to access decentralized applications (DApps) on the Ethereum network, such as Uniswap and OpenSea.

Rishi Dean, director of product management at Coinbase, announced on May 17 that eligible users will be able to start trading in non-fungible token (NFT) markets, swap tokens on decentralized exchanges (DEXs), and communicate with decentralized Borrow and lend funds by interacting with decentralized finance (DeFi) lending protocols.

In addition to a mobile browser that provides access to DApps, Coinbase has launched a hot wallet that customers can use to exchange funds. Unlike decentralized hot wallet applications such as MetaMask, Coinbase Hot Wallet will have a co-custodial setup. This means that the wallet's private key will be stored by the company, but also by the user personally.

Wallet and DApp functions use multi-party computation (MPC) technology to protect the privacy of senders and receivers while ensuring transaction accuracy.

Shared key custody is a security feature designed to protect users from device-related issues, Dean said. “This means that if you lose access to your device, the keys to the Dapp wallet are still safe and users can help restore access through Coinbase’s live support,” he wrote.

Coinbase's expanded wallet functionality offers hope to Web3 developers, who previously had a hard time getting new users to experience Web3's new features and understand what they've achieved. The Coinbase exchange currently has about 90 million registered users, according to Statista.

This is the second major product Coinbase has launched this month. The exchange launched its long-awaited Coinbase NFT marketplace on May 4, but saw only $75,000 in volume on the first day and only 150 transactions.

Coinbase's first-quarter earnings report showed the exchange was struggling in a down market, posting its first net loss since going public last year. Since the first quarter of 2021, revenue fell 27% to $1.1 billion from $1.6 billion in the same period last year, while monthly active users fell to 9.2 million from 11.4 million in the fourth quarter of 2021.