Supercharging the UX of Web3 Wallets with Rose Kuan and Claudia Haddad

I'm a product designer on dev tools and this is Hey everyone, I'm Claudia PM on our staking product for Coinbase Wallet. Super excited to be here and talk to you guys about self-custody wallets and how to make them better and more intuitive for users. So to kick it off, you know, why are we here? Why self-custody wallets? And since this is a beginner talk, we'll start from the basics.

So what is a self-custody wallet? Um at a high level, it's a digital wallet where you can store crypto assets and connect to the world of web 3. Whether that's DeFi, NFTs, gaming, the opportunities are endless. So to get more into the details, it's secured by a 12-word recovery phrase and only you have access to this recovery phrase and your funds. And this is in contrast to custodial wallet like Coinbase or Binance where they are custodying your funds and as a result you need to have way more trust in this like entity you're giving all your money to.

So yeah, and then there's a few ways you can access this. The first one is through a cold wallet, which is known as a hardware wallet, and there's also a hot wallet known as an online wallet which is connected to the internet. And we'll be talking a bit about both but really with a focus on hot wallets. Um another piece to keep in mind is that it's truly anonymous. There's no KYC or user identification needed.

You can have as many wallets as you want and yeah, do whatever you want with them. And why use a wallet, right? So there's three main use cases. The first one is finance. You can just huddle, store your assets securely.

You can stake with apps like Lido or Rocket Pool. You can do DeFi yield in a place like Aave or Uniswap. Or you could even pay your friends. I'm a big fan of like USDC on Solana for really like fast transactions and low gas fees. Um second use case, this is why I got a wallet was to buy NFTs.

So you can buy or sell NFTs and just admire your collection in your wallet. You can also claim POAPs like all the ETHDenver ones we got this week. Um third use case that's becoming way more and more popular is gaming. So you can play games on like uh games on a website or even play games in a wallet and just store your game tokens like Axie Infinity or Step'n. And yeah.

Yeah, and let's take a look at the market landscape. There's a couple titans that are in the hot wallet space. You know, MetaMask very loved by devs, Coinbase Wallet where we're more focused on consumer experience, uh Trust Wallet which is the Binance-selected wallet, and Phantom which is historically Solana. I know they're also moving towards multi-chain, and Rainbow which is a really fun um UX-focused wallet. Um in terms of the cold wallet and hard wall hardware wallet selection, there's also Ledger and Trezor.

And I think people actually start off with a lot of hot wallets cuz it's really easy to spin up with. Um it's also really easy to do multi-account, but as you graduate and, you know, aggregate more funds, you move on to hardware wallets like Ledger which offers a lot more security. But it's also more expensive to procure. So there's definitely pros and cons. Yeah, and here we go.

This is the Coinbase Wallet sizzle reel. Um we actually redesigned the entire app in 2022, uh multi-chain all together. You can view NFTs, DeFi, and all your crypto on one space. We're also thinking about a lot of NFT um specific features like offer in app and also an aggregator. Yeah, and our browser is actually designed so that you can interact with any dApps and we actually auto-inject uh for top dApps your network so that it's a very easy integration.

And yeah, please download Coinbase Wallet. It's I think one of the best wallets out there. Great mobile experience in our unbiased opinion. Okay, yeah. So um you know, the big question we want to ask is how can we improve the existing wallet experience from a both a product and design perspective?

And here's some guiding UX principles that we've been focused on um within the Coinbase team and you can definitely see these themes span across our retail app as well. You know, we're historically known as a, you know, noob on-ramp into crypto. So making crypto simple is a big theme. Are there any steps we can obfuscate in the process? We're going to do it.

If there's any step we can automate, we're going to remove it. Um and another theme is making crypto safe. Making sure that people know what they're signing, what transactions, you know, are going through. And in terms from a design perspective, making crypto bold. I think we're adding a lot of delights personally in the Coinbase Wallet app, you know, adding animation, also adding, you know, touches of like Easter eggs running around the app.

Um we're also looking at gradients to make it more fun. And lastly, make crypto for everyone. Um we're not only catering towards the consumer crowd anymore. We're thinking about devs. We're also thinking about, you know, advanced users with our L2 launching.

Um definitely making it um you know, turning Coinbase into a more on-chain brand in general. And one area that we're very focused on is human readability and this uh ties exactly into our simple um making crypto simple principle. Users have a lot of anxiety uh not knowing what or who they're interacting with. Um so showing clear transaction previews like the screen next to us, you can see that we're flagging a dApp that is unsafe. Uh we also tell you if an NFT collection might be drained or you could lose all of your crypto and NFTs.

Um so that users know exactly what you're signing and be warned if a website ends unsafe. Another thing is giving users confidence with transfer and this actually ties in a lot with DID, right? Like utilizing ENS names, profile pictures, and saving addresses on chain could actually help people know who they're sending things to. Almost like a Venmo or Zelle experience and feels a lot safer. Another area is uh prioritizing safety and security.

Uh users are at risk of losing access to their funds when they misplace their seed phrases. And one of our most revolutionizing technology that Coinbase retail launched uh last year is MPC, multi-party computation. Um so you can think of it as, you know, blueprints of your seed phrase where um Coinbase owns a scrambled version and you also own one piece of it. So when you lose your seed phrase, um we could actually recover it for you and it is secured with a passcode and biometric. We're also um adding more entry points on educating users on seed phrases, whether it's trace in app or when you sign out of Coinbase, we always prompt you, you know, have you backed this up with iCloud yet?

Making sure you saved it somewhere, written it down. Um so that your seed phrase is stored um very safely. And lastly, I'm sure you guys are big fans of authentication, two-factor authentication apps like Duo or Google. Um we always ask users to set that up so that, you know, when you sign a transaction, um it's double protected. And yeah, one area I am particularly passionate about is web3 devs as first-class citizens.

I don't think right now web3 devs are seen um you know, as first-class users on wallets. Um there's not a lot of entry points for devs in the wallet journey. I think a big one is actually the first step which is spinning up multi-mnemonic or um a new wallet for testing. And the last step for testing. And we're actually supporting um multi-mnemonic and hardware wallet already on Coinbase Wallet.

We create a safe separation between testing and personal funds. We're also working on um blockchain error messaging. Right now it's super difficult to test a dApp and know what is wrong um on your console. So we want to make sure that we can help devs stack trace or debug faster. And lastly, um if you guys scan the code right there, if you're a dev, that is our testnet faucet.

We just added um faucet solutions right now to Coinbase Wallet. You know, a lot of faucets out there drip very little amount and it's very scammy and prone to botting. We helped devs create um you know, request testnet tokens without signing erroneous transactions. And our current faucet supports um our L2 which is Base, Goerli ETH, and also Goerli ETH as well as AVAX Fuji and a bunch of other um existing testnets. Nice.

Yeah, another focus area for us is really making fiat on and off-ramps effortless. This really ties back to making crypto for everyone, right? Like on and off-ramps really vary across the world. So I think building with a global mindset is really key here. So a few ways to do this.

The first one is adding multiple on-ramps. So CB Pay, MoonPay are really popular in the US but also integrating with like Transak which is super popular in Southeast Asia. Um but yeah, just making it really simple. If you want to buy ETH, you don't have to transfer. You can just buy it right there and like accomplish what you're trying to do.

And we have a picture of Coinbase Pay right here. Um another interesting one is off-ramping. So for us, we probably think of like, you know, send from your wallet to Binance or Coinbase. But I did research in Southeast Asia this past summer and we actually saw people use physical off-ramps where they'll go to a 7-Eleven and connect their wallet and just like cash out right there. And I found this super interesting, right?

Because the reason they did this was one, it was faster in most cases than banks, and they also found it much safer. Like it's you're not you don't have an intermediary. It's just a person right in front of you. So they thought it was like faster and more secure that way which is pretty interesting. Also pawn shops have a similar model to 7-Eleven.

And yeah, another focus area is really leaning into decentralization. So users want their wallet to help them accomplish their financial goals and their needs may be evolving and or they might not even be sure what their needs are yet. Um so really enabling user choice when possible. Um so maybe giving defaults, giving guidance, but letting people ultimately make the decision that works for them. So a few examples of this.

There's adjustable slippage and gas. You know, an advanced trader might be really picky about their slippage, but a beginner might be like open to do 1% or 3%, whatever the default is. Um another example that we really love is DEX aggregators. So we've worked with 0x to really find the best price possible and like not just stick to one DEX but provide all of them. Same with NFT marketplaces.

So, we have a really cool feature on Voice Opinion that you actually can see all your NFT offers right in the app and like exactly what the price is. And we do this by aggregating across multiple marketplaces. So, yeah, big fan of aggregation. Like give people all the options. Like crypto is a lot of um competition, so it's good to just show all the options possible.

Um second thing is building for multi-chain worlds, you know, like in the past year alone like many L1s and L2s have sprung up. So, it's really important for wallets to be neutral, support multiple networks, and also design in a way that's like uh able to scale, right? Like you never know what's coming next, so just be ready to scale and like support new networks, support L2s like base when possible. Um Also in my work with staking like gas fees is like the biggest customer complaint, so really excited for L2s for that purpose. Yeah, here's a picture of our 0x aggregator where we find you the best price.

Um Yeah, last um area of opportunity is really inclusion and personalization. So, ultimately like users are very different. We have someone who might be building a wallet just to buy NFTs. We might have like a crypto whale who loves to trade. Um so, everyone's different, right?

And everyone has different experience levels. So, first thing is just provide education. So, if you're a beginner, you can like dive deep and have the resources to answer all your questions. Um but if you're an advanced person, you probably can like skip most of it. Um so, it's a good balance there.

Second thing is showing personalized recommendations using like ML or like showing what's popular to really help people like discover opportunities and like get more bought into crypto. And finally, some more fun things is like we have this new feature where you can customize the color of your wallet. And we really think this like helps you feel like more connected to your wallet and like you have like autonomy to like choose your experience and really like navigate web3 the way you want to. So, yeah, those are our main opportunities. Um We'll take any questions now.

Thanks so much for coming, everyone. Yep. Ooh, good question. I don't know off the top of my head, but Yes, sure. So, he asked how many people coming to Coinbase Wallet already have a wallet versus are like making a wallet for the first time.

I can give like a more high-level answer, which is um a lot of our users do come from Coinbase Retail. So, I think they tend to be like making their first wallet on Coinbase Wallet. We also are very popular with beginners. So, I would say like our user base tends to be a bit more beginner, a bit more new to crypto. And we're really designing with that in mind.

Any other questions? Yeah. Yeah, absolutely. I can take that one. I think we definitely get a lot of, you know, thrash when it comes to storing your seed phrases, and I think the current format of, you know, the big wallets isn't as ideal as possible where, you know, you're get prompted with this 12-word thing and you have to like write it down somewhere by your, you know, bed stand or something.

And I think right now, um you know, within the retail app, I think MPC is a direction we want to move towards. Um we don't yet have plans with that on wallet, but we're definitely thinking about how we can obfuscate the login experience, right? Like what if Coinbase had um partial custody of your seed phrase, would users be okay with that? We're definitely thinking about like AB testing that kind of experience. Um yeah, and I think seed phrases in general is like tricky, so we do add a lot of like uh in-app trays or like prompts to make sure that users know that they have to store that safely uh before they log out of the app or um when they sign a transaction, etc.

Yeah, I think seed phrases are like the single biggest pain point for self-custodial wallets, so very excited about MPC. If anyone has other innovative ideas, definitely go pursue them cuz the that area like needs um improvement for sure. Um when I did research in Asia, like a lot of people told me that like they just like gave their seed phrase away like not knowing they weren't supposed to do that. Um so, yeah, it's scary. Even like storing it on a piece of paper feels like scary as well, so.

Yeah, excited for that improvements there. Yeah. Sorry, do you mind um talking louder? I heard of account abstraction. Yeah.

Can you repeat the question? Okay, can you repeat it to the audience? I I I I couldn't I couldn't I couldn't hear you. Uh was the question about like how we're thinking about account abstraction and like improving user experience with it? Yeah.

Yeah, we're super excited about account abstraction. Um it's a little difficult to implement, but we're very excited to like think about all the use cases for it. Um personally, I'm excited to see like how we can like cover gas fees for users going forward cuz like I said, gas fees is a huge pain point. Um also very excited about like automation. So, like being able to like buy and click and like swap on like DCA pretty much.

Um so, yeah, we're excited about a lot of features, but would love to hear like come tell us your features. We're very open. We're planning our Q2 strategy this week, so. Roadmap ideas, please drop them in. Any more questions, thoughts?

Yeah. Yeah, I think that's a I think that's a lot to do with like, you know, um the challenges of Coinbase not owning your funds. Like we've definitely explored ideas of like sign in with Coinbase um retail, and I believe we've like shipped products like that or like buy with Coinbase pay almost like, you know, similar product with like MoonPay where you have an on-ramp off-ramp immediately. But with self-custody wallet, I think the challenge is that the user does not want to share all of their account, and we don't have like full control over that. But yeah, definitely um I think that ties back to the last question, right?

You know, like how do we obfuscate the seed phrase login? And if there's any way, could we just, you know, connect with Coinbase? Um I think an existing example with that would be the Coinbase Wallet SDK. So, if you go on any dapp, you'll be seeing like connect with wallet, connect, connect with MetaMask, connect with Coinbase, but you still have to sign a transaction message on your extension or mobile. And I still think that's not the best, you know, user experience, but definitely areas for improvement.

Yeah. Yeah, there there have been some competitor wallets that do like sign up with email, and I've seen that like gaining traction, so I think I like how simple it is, but it's kind of a mixed bag cuz like you kind of are KYC'ing. So, it'll be interesting to see how that evolves with new wallets. Cool. Any final questions?

Does anyone use Coinbase Wallet here? Yeah. Nice. Oh, I see some hands. Snap, snap.

Cool. Yeah, well, thanks so much, everyone. Like feel free to like say hi. Oh, we also have like Oh, yeah. Um feel free to um scan this QR code to download Coinbase Wallet.

And We had our Twitters there, but Shameless plug. Um if you want to any product updates, feel free to follow us on Twitter. Um it's @mochicon and @claudhad. Yeah. Um well, thank you all so much for coming.

Thank you.