How Coinbase is building the bridge to web3

Tl;dr: Coinbase is serving as the bridge to web3 by providing our customers seamless access to the entire cryptoeconomy. We’re focused on supercharging key building blocks for web3 including the self-custody wallet, NFTs, developer tools, and tech advancements such as MPC.

By Max Branzburg, Will Robinson, Greg Tusar

Product

, December 21, 2022

Coinbase

We often talk about the phases of crypto and our strategy to help the industry reach one billion users. But these days it’s easy to get distracted by industry news and forget why we made the leap into crypto in the first place. We want to help drown out the noise, and bring focus back to our long term crypto strategy and investment in web3. 

Many people focus on Coinbase's centralized exchange as a way to invest in crypto. But behind the scenes, Coinbase has been heads down building crypto as an app platform and supercharging key building blocks in web3. Here are some recent highlights that demonstrate our commitment to building for this space.

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Building the most simple and secure wallet for web3

We’ve made major investments in Coinbase Wallet because there is no web3 without self-custody. Over the past five years, Coinbase Wallet has been the most downloaded mobile self-custody wallet and dapp browser in the United States*. 

We recently announced the dapp blocklist and spam token management tools for Coinbase Wallet. Bad actors are also known to airdrop tokens into users’ wallets to lure you to a malicious website. Coinbase Wallet hides assets from your home screen that are known to be malicious and gives you the ability to report suspicious tokens that appear in your wallet. 

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Earlier this year, we announced cb.id, a subdomain system built in partnership with ENS that enables human-readable addresses at absolutely zero cost. Cb.id makes it easier for everyone to send and receive crypto — instead of having to copy and paste long strings of letters and numbers, you can send crypto just by typing in a username. In the first six months, there have been more than 1.3 million cb.id usernames claimed, with no cost at all to the user.

Enabling simple participation in web3 through NFTs

NFTs provide an easy way to prove ownership of digital assets. A thriving web3 creator economy depends on NFTs being simple, useful, and widely accessible. Our strategy at Coinbase is to take care of all the web3 tooling, so creators can focus on what they do best: building community.

Today, Coinbase Wallet users can buy, sell and manage your NFT collections and dapps on Ethereum, Polygon Solana and Gnosis Chain. You can also access every major NFT marketplace in the in-app browser, directly view offers on your NFTs, and in the future, accept an offer on your NFTs, all without leaving Coinbase Wallet. 

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Coinbase NFT is a web3 marketplace that helps collectors find the best deals from their favorite creators, all with the simplicity, safety and security of Coinbase. Today, you can see Ethereum-based NFTs from LooksRare, OpenSea, and others, alongside listings from Coinbase NFT. In the coming months, you’ll also be able to view, buy and sell Polygon NFTs on Coinbase NFT.

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With dapp wallet sign-in, you can sign in to Coinbase NFT using your main Coinbase app and pay using your existing ETH balance. Soon, you’ll be able to use your Coinbase balance to buy NFTs from LooksRare and OpenSea on Coinbase NFT.

Coinbase NFT Drops has helped creators like Pplpleasr, Urs Fischer, Amber Vittoria, the Chicago Bulls, and others connect with their audience and provide unique utility. We re-designed the Drops experience to give creators a richer canvas to tell their story, and added a Drops waiting room, helping collectors avoid high network fees that can exist when trying to buy popular releases. In Q3 of this year, over 92% of our Drops on Coinbase NFT sold-out in less than 24 hours**. 

With collection creation, anyone can create a new collection on Coinbase NFT using an all-in-one NFT builder with on-chain editing. Creators can download wallet addresses of the owners of their collections, airdrop tokens or NFTs directly to their wallet addresses, and soon, token-gate access to benefits—making engaging and rewarding holders even easier.

Coinbase Cloud is building for web3 developers 

As you can see, our product suite at Coinbase has evolved to deliver new innovations from web3 to all our customers. However, even with our recent progress, what we’ve learned is that we can’t build the future of web3 alone. 

We believe the fastest path to innovation is enabling developers - it’s going to take millions of developers building and innovating for web3 to reach a billion people. If we can make it easy for developers to build decentralized applications, incredible experiences, games, and social networks in web3, we can give more people access to the economic freedom that web3 provides. 

To build for web3 builders, we made the company-wide mindshift to be API-first. As we innovate and build new web3 technologies and infrastructure, we will also make them available to developers. By providing all-in-one access across every primitive, the goal of Coinbase Cloud is to help web3 developers build a better, more secure, and decentralized internet. 

We recently launched our web3 developer platform with the roll out of Ethereum Node. Shortly after, we announced Goerli testnet support and a Scale Plan for Node that makes it affordable for projects that need more requests. 

We released a new open source Coinbase Wallet Mobile SDK, the easiest and fastest way to integrate Coinbase Wallet into your mobile web3 dapps. We also rolled out several new testnets for Coinbase Wallet including Polygon Mumbai, Optimism Goerli and Ethereum Sepolia in the Wallet chrome extension allowing developers to securely deposit funds directly into their wallet. 

We also announced a roundup of updates to Coinbase Cloud’s core developer offerings across NFT API, Pay SDK and Commerce API

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In addition to products and tools, we focused on improving our foundational technology layer for web3. One example is “multi-party computation”, or MPC. Our investment in MPC enabled us to build direct access to web3 within the main Coinbase app. You can read more about how we adopt MPC technology here

Institutional interest in web3

As institutions have become increasingly familiar with crypto, their investment strategies have evolved to include crypto native activities like staking, governance, NFTs, and DeFi participation. As a result, we are seeing more demand from institutions for features and functionality to access and interact with web3 and DeFi, and we are building to meet those demands.

Earlier this year we launched our institutional-grade NFT custody*** solution where clients can store select NFTs in segregated cold wallets. We see NFTs as an important piece of the ecosystem, allowing users to build and interact with their communities, leveraging new web3 distribution channels.

For DeFi, we are committed to the growth of the overall stablecoin ecosystem and the empowering of the DeFi community and its users. The MakerDAO community, for example, recently approved a Coinbase proposal that will allow them to earn rewards on their treasury holdings of USDC. We anticipate that the additional revenue MakerDAO will earn from their USDC holdings will ​​further advance their mission to create a financial system built on decentralized rails.

We believe in a better future that is on-chain and will continue working to build a bridge to web3. We’ve been on the journey for a while and hope you’ll join us - whether you’re a consumer, an institution, an enterprise, a start-up, or a developer. We’ve got a lot left to do together if we’re going to create economic freedom for billions of people around the world. 

*Source: Sensor Tower, United States, 2018-2022

**Source: On-chain data, primary sales of Drops on Coinbase NFT, Global, Jul - Sep 2022

***NFT custody is only available to Coinbase Custody International Ltd clients at this time.

Legalese/Disclaimers

This document and the information contained herein is not a recommendation or endorsement of any digital asset, protocol, network, or project. However, Coinbase may have, or may in the future have, a significant financial interest in, and may receive compensation for services related to one or more of the digital assets, protocols, networks, entities, projects, and/or ventures discussed herein. The risk of loss in cryptocurrency, including staking, can be substantial and nothing herein is intended to be a guarantee against the possibility of loss. 

This document and the content contained herein are based on information which is believed to be reliable and has been obtained from sources believed to be reliable, but Coinbase makes no representation or warranty, express, or implied, as to the fairness, accuracy, adequacy, reasonableness, or completeness of such information, and, without limiting the foregoing or anything else in this disclaimer, all information provided herein is subject to modification by the underlying protocol network.

Any use of Coinbase’s services may be contingent on completion of Coinbase’s onboarding process and is Coinbase’s sole discretion, including entrance into applicable legal documentation and will be, at all times, subject to and governed by Coinbase’s policies, including without limitation, its terms of service and privacy policy, as may be amended from time to time.

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