Coinbase Smart Wallet, rolled out June 5, 2024, replaces recovery phrases with passkeys and biometrics to connect retail users to the on-chain ecosystem. is aggressively leveraging its Smart Wallet technology to bridge the gap between its massive retail user base and the on-chain ecosystem. By June 5, 2024, the company officially rolled out the product, which replaces traditional recovery phrases with passkeys and industry-standard biometrics like Face ID.
This distribution-first strategy aims to onboard 1 billion users to decentralized finance (DeFi) by removing the technical friction that often prevents exchange users from moving self-custodial assets onto the Base layer-2 (L2) network.
Coinbase Smart Wallet simplifies on-chain onboarding
The scale of this migration became evident as the network reached a major milestone later that summer. Base surpassed 1 million daily active addresses on August 24, 2024, peaking at 1.05 million. This achievement marked a 60% increase in daily active addresses since the start of August 2024.
While the growth highlights the deepening integration between the Coinbase platform and its L2 network, the company is now focused on converting these active addresses into long-term participants in DeFi and gaming applications.
The Smart Wallet addresses what Coinbase Senior Director of Product Management Siddharth Coelho-Prabhu identifies as the primary barrier to entry. Coelho-Prabhu noted that “until now, going onchain has been slow, expensive, and challenging, involving separate wallet app installations and first-generation blockchains.”
By utilizing Passkeys through Google Chrome profiles or fingerprints, users can create a wallet in seconds without managing the 12-word seed phrases that have historically intimidated newcomers to self-custody.
To further streamline the experience, the wallet features gasless transactions through “paymaster” sponsorships, allowing developers to cover user network fees. This technical shift is bolstered by Multi-Party Computation (MPC) technology, which distributes key control among multiple parties to enhance security and simplify recovery.
By removing single points of failure, Coinbase offers a more familiar, “web-like” login experience for its 120 million verified users, potentially unlocking liquidity that was previously confined to centralized exchange accounts.
Rapid adoption and Base network growth
Data from the past year suggests the simplified UX is driving measurable adoption. The Coinbase Smart Wallet crossed 1 million total accounts by August 18, 2025, supported by a massive surge of 270,000 new accounts on August 16 alone.
Interestingly, approximately 25.9% of these total Smart Wallet accounts were generated specifically due to the rollout of the rebranded Base app. This level of growth indicates that Ethereum recovery outlook hurdles, such as complex onboarding, are being mitigated by the exchange’s unified distribution funnel.
The Base network itself has maintained strong momentum, reporting roughly 6 million monthly active users and 270,900 daily active users in recent counts. For Coinbase, the goal is to successfully migrate its 8.7 million monthly transacting users—a figure reported in 2025—into this on-chain ecosystem.
If these users interact repeatedly with applications rather than just holding assets, the L2 network moves from an experimental phase into a primary consumer infrastructure play.
Financial impact of the on-chain distribution strategy
This demographic shift is already producing substantial revenue for the ecosystem. In December 2024, on-chain revenue grew to $14.7 million, accounting for 63% of the total $23.5 million generated by Coinbase’s L2 activities. This trend continued into 2025, with revenue reaching $75.4 million by mid-year.
As XRP wallet adoption trends and other ecosystem movements evolve, Base has secured a dominant position in the L2 market, reaching a Total Value Locked (TVL) of $4.63 billion in early 2025.
The network’s revenue is increasingly driven by specific applications. Aerodrome, the leading decentralized exchange on Base, contributed $160.5 million in revenue in 2025, which represents 43% of all application-driven earnings on the network.
Other sectors are also gaining traction, such as the AI Agent Launch Platform Virtuals, which achieved $43.2 million in revenue, and the sports prediction platform Football.Fun, generating $4.7 million. This variety shows that the Smart Wallet’s distribution reach extends beyond simple asset swaps into diverse consumer crypto categories.
Future of self-custody and multi-chain access
The long-term success of the Smart Wallet depends on its ability to remain the preferred gateway for retail users. Currently, the wallet supports Base, Ethereum, Optimism, Arbitrum, Polygon, Avalanche, BNB, and Zora networks. This multi-chain compatibility, combined with seamless funding from existing Coinbase balances, allows users to navigate the L2 ecosystem without the traditional complexity of bridging or transferring assets between separate applications.
What sets this approach apart is Coinbase’s ability to act as the primary distributor for onchain activity. By owning the entry point (the exchange), the infrastructure (Base), and the interface (Smart Wallet), the company has created a vertically integrated ecosystem.
As the market watches for speculative activity and resistance levels across various assets, Coinbase is betting that the real winner will be the platform that provides the most invisible, friction-free path to on-chain participation.