What is account abstraction: A beginner’s guide to Ethereum’s ERC-4337 standard. The new paradigm of Ethereum account abstraction makes it easier for users to interact with decentralized apps (DApps). Smart contracts, rather than externally owned accounts (EOAs), can hold assets in blockchain systems thanks to account abstraction.
When viewed through the eyes of an Ethereum user, account abstraction represents the obfuscation of the technical specifics of Web3 interactions. This covertness improves not only wallet design but also the user experience. Ethereum co-founder Vitalik Buterin acknowledges the importance of account abstraction in driving the platform’s widespread adoption. This article focuses on Ethereum account abstraction, delving into the benefits of account abstraction for increasing the likelihood of a Web3 revolution to aid in the onboarding of users and drive mass adoption.
History and evolution of account abstraction
When it was first thought of, Ethereum’s blockchain was built on accounts. There were two kinds of Ethereum accounts in this model: contract accounts, which were controlled by the code of smart contracts, and publicly owned accounts, which were controlled by public and private keys.EOAs are how people connect with Ethereum. On the Ethereum blockchain, everything that can happen needs a transaction and an EOA to pay for it.
A noncustodial MetaMask wallet, Coinbase, and other famous wallet accounts are all EOAs. They comprise two cryptographic keys: a public key and a private key. With these keys, you can get into your user account. The EOA signs every transaction and pays the gas fees that go along with it. This happens whenever a user mints, gifts, or transfers a nonfungible token (NFT) or a crypto coin.
In the early days of Ethereum, gas fees were used to figure out how much computing work was needed to carry out transfers and smart contracts. Users must pay gas fees so that miners will include their transactions in blocks. For a typical new user setting up their first tasks on a DApp, this whole process with EOAs takes a long time and a lot of steps and confirmations. Also, users may lose the money in their EOA accounts if they lose their secret keys. The result is a broken and scary Web3 experience.
A typical step-by-step process a new user goes through to finish their first action on a DApp from a new EOA. The Ethereum team and Buterin will introduce account abstraction at WalletCon in Denver in March 2023 and then at EthCC in Paris in July 2023. This will make the Web3 user experience much better.
ERC-4337 token standard
With the release of ERC-4337, it is now possible to make ERC-4337 wallets. Using the power of account abstraction was made possible by ERC-4337 and Ethereum Improvement Proposal (EIP) 4337. Ethereum has clarified that it wants to make everything in the coin world more accessible.
ERC-4337 is a token standard that Buterin, Kristof Gazso, Dror Tirosh, Tjaden Hess, Yoav Weiss, and Shahaf Nacson all worked on together. It adds account abstraction without changing the Ethereum protocol itself. Before ERC-4337 was officially adopted, many EIPs were proposed to split off into Ethereum accounts.
EIP-4337 was first suggested in 2021, and it was finally approved by the government in 2023 because it guaranteed that there would be no changes to the agreement layer of the protocol. The goal of ERC-4337 is to make it easier for developers to make their intelligent contract accounts.
How does ERC-4337 work?
A UserOperation is a new “pseudo-transaction” object added by ERC-4337 that sends a transaction for the user. Unconfirmed UserOperation transactions are stored in an “alt mempool.”
As a “Bundler,” a node on the Ethereum network can choose to take multiple Operations and combine them into a single transaction. This is called a “bundle transaction.” A global smart contract on the Ethereum blockchain called “EntryPoint” receives the group transactions. Remembering that the Ethereum system has only one way to get in is essential. It starts a function call on the EntryPoint smart contract named “handles.” This function receives the bundle transaction and invokes the appropriate validUserOp for each account.
The job of validateUserOp is to check the operation’s signature and, if it matches the account’s rating, process the gas fee payment that goes with it. Then, each intelligent contract wallet needs to add a new function and carry out the action the EntryPoint contract sends. As shown below, a program now does everything, so users don’t need to worry about private keys.
Account abstraction wallets
Among the account abstraction wallets that use intelligent contract features are Argent, Ambire, Safe, Braavos, and others. Starknet is an Ethereum layer-2 scaling option that Braavos uses. It has low fees and account abstraction built right into the protocol. In the Ethereum environment, Argent is a well-known social recovery abstraction wallet. What Buterin said was a “preferred method for securing a wallet.” Social recovery lets you get back into your account through addresses already allowed, like those of trusted family and friends, hardware wallets like Ledger and Trezor, or even Argent’s own Argent Guard service.
Benefits of account abstraction
Users of Web3 can gain a lot from account abstraction. For example:
Elimination of seed phrase reliance
ERC-4337 also lets you make safe wallets that don’t need seed words. ERC-4337 adds wallet security and logins that are easier to use, like biometrics, two-factor authentication, and other methods that are common in traditional banking. These are easy to use and could help them become more popular.
Removing human error with smart contract wallets
Intelligent contract wallets make human mistakes much less likely, improving operations’ total accuracy. Taking away accounts also makes a Bitcoin network safer. Thieves have difficulty taking money from a specific account because the user’s private key is only used to approve the execution of a smart contract and not to control the assets in the direct report.
Seamless compatible chains
ERC-4337 makes it possible to aggregate changes across various blockchains, a valuable feature easily. Polygon, Avalanche, Arbitrum, and other networks that support the Ethereum Virtual Machine provide access to it.
Shared accounts and multi-user operations
With EOA wallets like MetaMask, a single seed word controls who has full access to an EOA. This means a person can give someone full access to their crypto wallet or not give it to anyone. There’s no middle ground. With account abstraction wallets, you could make a system that needs at least two signatures for a transaction. Additionally, there are ways to add people who can only make certain payments to a set of wallets within a specific time.
Future of account abstraction
Account abstraction modifies cryptocurrency and Web3 wallet accounts for the better. It moves away from the current simple EOA account approach, which lets small mistakes cause significant losses. Instead, it imagines a future where intelligent contracts allow users to change their accounts to fit their wants better.