Here’s why ‘Account Abstraction’ is a game-changer for Ethereum (ETH) in 2023 – and what opportunities it opens up for users and developers
With the new feature enabled, every owner of a noncustodial Ethereum (ETH) wallet can significantly increase their functionality and secure their experience with Ethereum (ETH) and EVM-enabled blockchains.
EIP 4337 goes live on Ethereum (ETH): Highlights
Yesterday, March 1, 2023, the developers of Ethereum (ETH) announced that the account abstraction mechanism included in the Ethereum Improvement Proposal (EIP 4337) had been stress tested, audited and deployed on the main network.
- In discussion since 2016, Account Abstraction is one of the most ambitious design changes to Ethereum (ETH);
- EIP 4337 is co-developed by the Ethereum Foundation and a number of hard-hitting Web3 teams: Stackup, Biconomy, Alchemy; OpenZeppelin has completed its security audit;
- It blurs the line between external accounts (wallets) and contract accounts (smart contracts) and introduces a new instrument in Ethereum: smart accounts;
- This update is of paramount importance for the security, operability and mass adoption of the Ethereum (ETH) blockchain;
- Besides Ethereum (ETH), this update is going live on all EVM-enabled blockchains: Polygon Network (MATIC), BNB Chain (BSC), Ethereum L2 networks, etc.
With EIP 4337 enabled, Ethereum (ETH) users can turn their non-custodial wallets into full decentralized banks. This protects new users from losing access to their ETH wallets due to seed phrase issues.
What is EIP?
Ethereum Improvement Proposals (EIPs) are descriptions of standards on the Ethereum (ETH) network: core protocol specifications, client APIs, and contract standards. Major network upgrades are associated with the implementation of the main network of this or that EIP.
Ethereum (ETH) enthusiasts submit their proposals for discussion and consideration; the complete approval cycle consists of eight phases. Some sophisticated EIPs have caused heated debates and been discussed for years.
EIP 20 (introduction of ERC-20 tokens on Ethereum), EIP 721 (non-fungible token standard) and EIP 1559 (dynamic transaction fee model with periodic token burning events) are among the most crucial EIPs since inception of Ethereum (ETH).
What are EOAs and CAs on Ethereum?
Ethereum, a very first blockchain network with support for smart contracts (programmable blockchain), has two types of accounts in its design. Simply put, much like traditional banking and payment apps, an Ethereum (ETH) account is where cryptocurrency is stored.
External accounts (or EOAs) can store cryptocurrency but are not able to send transactions themselves. Users must authorize transactions with private keys. Crypto wallets like MetaMask are classic examples of EOA.
In contrast, contract accounts are software that can perform financial transactions. They are controlled by a code and not by private keys. Smart contracts – building blocks of the DeFi and NFT protocols – are “contract accounts” (CA) by design.
What is EIP 4337 or Account Abstraction (AA)?
EIP 4337 is an upgrade of the Ethereum (ETH) network design; it’s implemented as an additional layer on top of the Ethereum (ETH) mainnet, so it didn’t need a hard fork to go live. With Account Abstraction, Ethereum (ETH) users can easily turn their wallet into a smart contract and overload them with additional features.
A “smart account” is a new type of wallet that becomes available with EIP 4337. First and foremost, average users will be able to turn their accounts into multi-signature storage. This will eliminate the need for account owners to be responsible for private keys.
The Ethereum Foundation points out that EIP 4337 will allow the results of off-chain calculations to be used on-chain, which is a real game-changer for making Ethereum (ETH) feature-rich:
ERC-4337 attempts to do the same thing as EIP-2938, but by extra-protocol means. Users are expected to send off-chain messages called user operations, which are collected and bundled into a single transaction either by the block proposer or by a constructor producing bundles for block proposers. The proposer or the builder is responsible for filtering the operations to ensure that it only accepts paying operations. There is a separate mempool for user operations, and nodes connected to this mempool perform ERC-4337-specific validations to ensure that a user operation is guaranteed to pay a fee before transmitting it.
Since the early days of EIP 4337 operations – as revealed by John Rising, Stackup co-founder and voice upgrade proponent – the new feature has a solid infrastructure base and is available on all major EVM-enabled blockchains.
How EIP 4337 Will Change Ethereum (ETH) Forever
EIP 4337 already ranks first among the largest and most ambitious EIPs in Ethereum (ETH) history. With EIP 4337 enabled, the Ethereum (ETH) experience for a new generation of users and developers will be different.
EIP 4337 for security
Regarding private key management, EIP 4337 allows different users to authorize transactions from a single account. Thus, Ethereum (ETH) holders can integrate their wallet with a smartphone to streamline key management and add an additional recovery instrument for their coins.
EIP 4337 for usability
When it comes to smart contracts, EIP 4337 paves the way for 100% gas-free contracts: now developers can hard-code the ability to use a particular wallet as a gas payment source. Previously, such a design required all transactions to be authorized with private keys.
EIP 4337 for mass adoption
All enthusiasts, supporters and developers of EIP 4337 are sure that it will make Ethereum (ETH) user experience more beginner-friendly. The Ethereum (ETH) toolkit is getting more feature rich than ever. Now it allows for more sophisticated and quirky designs that would have been impossible without “smart accounts”.
Conclusion: What’s next for account abstraction in EVM?
As such, the activation of EIP 4337 is a major milestone for Ethereum (ETH) in 2023. Although it now seems overshadowed by the highly anticipated Shanghai upgrade (and its economic promises), the Account abstraction is as important to Ethereum (ETH) tooling as EIP. 721 and EIP 1155.
In the meantime, this story is far from over: at Vitalik Buterin roadmap are long-term goals for Account Abstraction. Mandatory conversion to EIP 4337-compliant accounts and censorship-resistant practices would be the next steps in AA development for Ethereum.
