What are Embedded Wallets in crypto?

Managing wallets is one of the biggest challenges in onboarding new users into crypto and delivering a seamless experience for both beginners and seasoned traders.

Developers often have to ask themselves the best way to manage the wallet infrastructure for their application. The obvious solution might be letting users  bring their own wallet, either by directly connecting via an in-browser wallet or leveraging a tool like WalletConnect to establish a connection to a cold or mobile wallet.

But these options can be confusing and clunky, which increases the friction of onboarding. Embedded wallets, on the other hand, offer a better path. They are built directly into Web3 applications, have a familiar login experience, and they don't require a seed phrase to be memorized and kept. Turnkey and other embedded wallet providers are enabling this new user experience — simple, easy, and still non-custodial.

Let's take a look at what embedded wallets are, how they work, and how to integrate them into your project as a crypto app developer.

What is an embedded wallet?

Embedded wallets are "embedded" directly into an application, allowing users to create and use a wallet without needing a browser extension or separate app — or even knowing what a wallet is!

Instead of switching between apps to manage transactions, users can create a wallet directly inside of a crypto application, reducing user friction and streamlining the product experience. There’s no need to exit the app and open up another browser window in order to sign and approve transactions.

Embedded wallets can be generated (and authenticated) using familiar methods like biometrics or physical devices, making the process both user-friendly and more secure.

Who is using embedded wallets?

Embedded wallets can fit anywhere into the crypto stack. Some examples of applications utilizing embedded wallets include:

Moonshot

Moonshot is a mobile-native app focused on trading memecoins and for getting non-web3 users into the ecosystem with as little friction as possible. They use Turnkey, an embedded wallet solution, to create non-custodial wallets for users in the background when signing up for Moonshot.

The sign up process involves no lengthy seed phrases or crypto jargon. Instead, it has a familiar login experience using email or biometric passkeys like Face ID/Touch ID, and by combining embedded wallets with MoonPay’s onramping solution, it makes buying memecoins possible within just a few minutes.

BullpenFi

Bullpen is a Telegram bot built on Solana. Users sign up with their biometrics, generate a self-custodial wallet, and can immediately start trading crypto through the familiar UX of a Telegram chat. Bullpen uses Turnkey for account generation, transaction signing, and more.

Alchemy

Alchemy is building onboarding infrastructure for crypto apps, of which one product is their “Smart Accounts” embedded wallet feature suite. Developers can create apps where end users generate passkeys with their biometrics, and this passkey is used to generate passwordless, self-custodial wallets via Turnkey. Users stay in control of their private keys, and Turnkey acts as an Externally-Owned Account (EOA) signer for Alchemy to create flexible embedded wallets.

Embedded Wallet Providers

Providers may have different embedded wallets solutions. Most apps or institutions offload wallet generation, transaction signing, and other aspects of wallet infrastructure to a dedicated third-party.

One common approach in wallet-as-a-service products is MPC (multi-party computation), used by providers like Fireblocks and Dfns. MPC’s security model is based on splitting cryptographic keys across multiple parties, reducing reliance on a single key.

However, MPC can slow down performance due to higher communication costs. This may not be a problem for institutions, but for apps it can lead to a clunky UX with increased friction.

Another alternative is using providers like Dynamic, Alchemy Embedded Accounts, or Privy, which offer higher-level abstractions for onboarding users and creating wallets. These solutions allow developers to quickly implement one-user, one-wallet setups. By wrapping wallet creation and management into easy-to-use SDKs, they streamline the developer experience and remove the need for a complex understanding of cryptography.

The Turnkey difference: Secure, flexible, fast

Turnkey is like an enterprise-grade operating system for wallets: powerful, modular, and built to adapt to any use case. We offer low-level primitives that developers can mix and match, giving you full control over your implementation and product experience without the limitations of one-user, one-wallet models or rigid MPC pathways.

With Turnkey you can:

• Create thousands of non-custodial embedded wallets at once

• Configure multi-sig wallets requiring m-of-n signatures

• Set advanced policies, like allowlists or transaction limits

• Automate signers with custom permissions for offline signing

• Create wallets that are multi-chain or multi-user

• Seamlessly incorporate account abstraction

• Set up session keys with configurable limits and permissions

• …And more

Turnkey combines this unmatched flexibility with an ironclad approach to security. As part of our novel security architecture, we utilize a type of tamper-proof Trusted Execution Environment (TEE).

This technology provides high levels of security for apps and their end users, ensuring raw private keys are never exposed to Turnkey or the app itself. With Turnkey, you get the power to build exactly what you need, backed by the highest levels of security.

How to integrate embedded wallets into your app

If you’re interested in integrating embedded wallets into your own app, check out our documentation available here. We also have a guide on the different ways you can set up embedded wallets (including non-custodial wallets) here.

Want to learn more? Get in touch with us, or join our Slack for additional developer support.

What is Turnkey?

Turnkey is secure, flexible, and scalable wallet infrastructure offering composable primitives for teams building unique crypto products. Founded by the team that built Coinbase Custody, Turnkey is powering serious applications across a wide range of use cases, from  wallets-as-a-service to programmatic backend crypto automation. By leveraging a novel security framework, Turnkey achieves 50-100ms signing latency for millions of wallets, all with affordable transaction-based pricing that’s designed for scale.