ERC-4337 — The Rise of Smart Accounts
At the #Walletcon2023 which happened during the Ethereum Denver Conference, there was a surprise launch of smart accounts enabled by the ERC-4337 standard.
To the more technical audience, this is what was referred to as account abstraction under the ERC 4337 standard, and it is simply the launch of smart accounts.
At Fifty Finney, we had previously done a deep dive into account abstraction; Account Abstraction — A pivotal step in ensuring Ethereum’s adoption. Hence, this piece would serve as an update on the progress made so far.
The core contracts for ERC-4337, also known as "account abstraction" by blockchain developers, have passed an audit by Open Zeppelin and will be accessible on every Ethereum Virtual Machine (EVM) compatible network, including Polygon, Optimism, Arbitrum, BNB Smart Chain, Avalanche, and Gnosis Chain. Ethereum Foundation security researcher Yoav Weiss made this unexpected announcement at WalletCon in Denver.
The new ERC-4337 standard now allows wallets on the Ethereum blockchain to function similarly to smart contracts and perform autonomously as hard-coded into the wallet's logic.
With the new capability, users no longer need to memorise seed phrases.
The Ethereum Foundation has been funding several teams to design the new ERC-4337 standard for over two years. The announcement marked a major landmark in ensuring the mainstream adoption of Ethereum and crypto. While smart contract wallets from Argent and Gnosis had previously offered the same capabilities that the new ERC-4337 standards now bring, these solutions rely on centralised relays to handle gas payments, while ERC-4337 completely decentralises the system.
So what are some benefits of smart accounts enabled by the new ERC-4337 standard?
Benefits of the ERC-4337 Standard
Eradication of Seed Phrases
It offers a better wallet recovery choice, essentially a substitute to the seed phrase substitute. We know how difficult it is to expect anyone to write down and safely retain 12–24 words. ERC-4337 permits "more normal" recovery choices that align with conventional banking.
Hence, you can delegate beneficiaries and next of kin or account managers who can access your wallet in case of your demise or when you lose access to your wallet. Additionally, you can now access your account using the biometric features available on your smartphone or computer, like traditional finance apps and neo-banks.
Furthermore, activating 2FA for these smart accounts is simple, something that many people have been requesting for a while.
If a user changes their mind while trying to recover an account, they can also establish delay timers before a recovery.
Fee Delegation
Delegating payment of costs is possible thanks to account abstraction. The on-boarding process can be seamless by having projects pay for gas costs for users.
Imagine you can have protocols sponsor your cost. This infinitely improves the user experience and allows crypto project access to a new tool to entice users to drive adoption.
Transaction Bundling or Multicall
Before the ERC-4337 standard, each transaction you can approve and perform on the Ethereum blockchain requires a new transaction. Abstraction allows users to complete all transactions with a single click, sparing them time, money, and unnecessary stress.
Hasu has a good tweet on how this drastically improves the user experience on the Ethereum chain:
On the reverse side, users can wallet revoke access to crypto protocols in a single bundle. This drastically improves the security of wallets and users.
Session Keys
Additionally, within a specific application, you can pre-approve transactions for a specific time. Think about using a decentralized market or playing a game. You can now sign one transaction at the beginning of your use for a certain amount of time and transact seamlessly, rather than signing via a wallet each time you want to purchase or sell something in-game or interact with the blockchain.
Subscription Feature
Before the ERC-4337 standard, you had to approve a transaction each time you wanted to transfer tokens or ETH. This made it difficult to implement a subscription model. With the introduction of smart accounts enabled by the ERC-4337 standard, subscriptions can now be directly integrated into wallets.
Services Using the ERC-4337 Standard
At the Ethereum Denver Conference, several teams displayed their services being built using the ERC-4337 standard. Some of these projects include:
Stackup: Stackup is building an infrastructure that makes it easy to build custom wallets and web3 transaction flows using the ERC-4337 standard.
Alchemy: Alchemy has a wide suite of Web3 APIs to build decentralized applications (DApps). The Alchemy team announced it is building a suite of products to support the easy creation of smart wallets.
Biconomy: Biconomy provides their custom built Software Development Kit (SDK) features for anyone building with the ERC-4337 standard to take advantage.
Candide Wallet: Candide wallet is a ERC-4337 powered wallet, implementing several improvements promised by the new standard.
Final Words
At Fifty Finney, we are excited to see the progress of the Ethereum blockchain with the introduction of the ERC-4337 standard. Previously, analysts and market commentators estimated that account abstraction would take a year or more
However, we are pleased to see the rapid implementation of the ERC-4337 standard.
We look forward to providing you with more updates on steps taken by the Ethereum foundation to leap frog adoption of Ethereum and cryptocurrencies.
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