Smart accounts, enabled by the release of the new ERC-4337 standard, are now available on ethereum and promise to help mainstream adoption by finally making crypto user-friendly.
Ethereum Foundation security researcher Yoav Weiss will make a surprise announcement today at WalletCon in Denver that the ERC-4337 core contract dubbed “account abstraction” by blockchain developers has been audited by Open Zeppelin and Virtual Machine (EVM) compatible networks will be available on every Ethereum, including Polygon, Optimism, Arbitrum, BNB Smart Chain, Avalanche, and Gnosis Chain.
Weiss told Cointelegraph that new users will no longer need to learn complicated mnemonic phrases or the technical process of setting up a wallet to enter the decentralized crypto world.
"The next billion users aren't going to write 12 words on a piece of paper. The average person isn't going to do that," he said. "We need to provide better usability for them, they shouldn't have to think about encryption keys." Account abstraction also enables unique cryptographic keys for cryptocurrencies to be stored on standard smartphone security modules, upgrading them to de facto hardware wallets. However, screens are still a security concern compared to traditional hardware wallets, and gas costs can be prohibitively high initially on mainnet although other EVM chains and layer 2 fees are low enough to make this viable.
It also supports the use of two-factor authentication; signing transactions on your phone using fingerprint or facial scans; setting monthly spending limits on accounts; and using session keys to play blockchain games without constantly approving transactions.
Users who lose their phones or devices can use time-locked social recovery of their accounts with a group of trusted friends or even business services. The standard has been in development for two years, with the team receiving funding from the Ethereum Foundation. While smart contract wallets from Argent and Gnosis offer similar functionality, these solutions require centralized components called relays to pay gas fees, and ERC-4337 decentralizes the entire system.
Weiss is one of the lead authors of Ethereum Improvement Proposal (EIP) 4337, along with Ethereum co-founder Vitalik Buterin and five other members. Buterin first unveiled the concept nine years ago, he said, “and it took us this long to get here, even before ethereum launched.”
Prior to this, there had been many proposals to enable account abstraction, but all would have required a hard fork of Ethereum and had given way to more urgent upgrades such as Merge. ERC-4337 is an alternative that uses a decentralized infrastructure called a "bundler". In very simple terms, the process works like this: a smart wallet signs a "user action" which is triggered to a special mempool, which is basically just an organized queue of transactions (albeit not the same as Ethereum different from normal memory pools).
Binders are like miners or validators, taking user actions from the mempool and returning the desired results to the wallet. The bundler also pays the required gas (transaction fee), which is compensated by the user's contract account or a third party called a "paymaster". This can be a decentralized application (DApp) or a wallet provider.
The first production-grade bundlers deployed on mainnet are from wallet and infrastructure provider Stackup, but more are coming soon. "It's permissionless; anyone can run the bundler," Weiss said. "It's not censorable."
Smart accounts, or account abstractions, are becoming a key theme in crypto in 2023. The technology has been natively integrated into StarkWare and zkSync's zk-Rollup layer 2 solution, and Visa designed an automated cryptographic bill payment system that utilizes it. Another advantage of account abstraction, Stackup co-founder John Rising tweeted this week, is that projects can use simple, understandable language to attract new users, rather than arcane technical jargon.
