embeddedwallets

MPC-TSS seems fundamentally broken. The user's backup shard:

- Is either in the hands of the provider, giving them custody (2/3).
- Or requires the user to securely store an encryption key, essentially providing the same experience as a seed phrase.

Every embedded wallet seems to use this approach. What am I missing?

Check out the demo for Coinbase’s new smart wallet. You get the upside of an embedded experience (no apps to install, instant creation) and it’s all tied to your passkey, fully self sovereign and portable, no complex mpc setups to think through. keys.coinbase.com/developers

Coinbase Wallet - Making it easy. Check it out https://keys.coinbase.com/developers

The passkey is the actual key. Coinbase doesn’t hold anything. The passkey signature is validated by a contract directly onchain.

This is very nice! I do think passkeys are the best way to do embedded wallets. 

Is the passkey is used to encrypt the actual ECDSA signer key hosted by Coinbase? How can I protect against Coinbase losing or censoring the actual key?