ERC-4337 is an Ethereum standard that allows for account abstraction within the protocol without requiring any changes to the consensus layer. As of March 2023, it has been deployed on the Ethereum main net. This standard enables users to transact and create contracts using a single contract account, providing a streamlined experience. With the introduction of ERC-4337, there is potential for developing more user-friendly crypto wallet designs, which could help promote wider adoption of cryptocurrencies. Details are as follows:
What is ERC-4337?
Account Abstraction is a blockchain technology that allows users to use smart contracts as their accounts. Before the invention of smart contract accounts, only Externally Owned Accounts (EOA) were controlled by an external private key. On most of the EVM (Ethereum Virtual Machine) supported blockchains, EOA is used to trigger transactions.
Most of the EOAs have limitations, such as solely relying on private keys to access accounts and requiring all the transactions to be signed, which makes it not user-friendly. If a user loses the private key, it means losing access to the wallet.
ERC-4337, also known as account abstraction, removes such kind of limitations. Smart contract accounts can help us have a better user experience by combining the features of both EOA and Contract accounts into one. Unipass is one of the examples of ERC-4337 compatible wallets.
How does an ERC-4337 work?
The ERC-4337 protocol is designed to improve the efficiency and functionality of transactions in a blockchain network. It introduces several new features and concepts to achieve this goal.
One of the key innovations in the ERC-4337 protocol is the use of UserOperation objects. These objects are higher-level pseudo-transactions that bundle multiple transactions together. Users submit their UserOperation objects to a separate mempool, which differs from the regular transaction mempool. Bundlers then package these objects into a single transaction included in a block. Bundlers incur gas costs for bundling transactions and earn fees from individual UserOperation executions. They use fee-prioritization logic, similar to validators, to select which objects to include in a transaction.
In addition to UserOperation objects, the ERC-4337 protocol introduces new functionalities, such as the EntryPoint security gateway. The EntryPoint handles the verification and execution logic for transactions, providing an extra layer of security and flexibility.
The protocol also includes the use of Paymasters and Aggregators. Paymasters are sponsor accounts that can fund and facilitate transactions on behalf of Contract Accounts. This feature can be helpful when Contract Accounts do not have enough funds to cover transaction fees or require additional security measures to complete transactions. Aggregators, on the other hand, serve as validating agents for Contract Accounts. They verify signatures and further transaction details on behalf of Contract Accounts, reducing the workload and improving security.
Figure 2. Overview of UserOperation lifecycle (Image courtesy of Vitalik Buterin)
What are the Goals of ERC-4337?
Streamlining User Accounts on the Ethereum Network: Users can now enjoy functionalities of both contract account and EOA into one (smart contract account).
Decentralization: The standard enables any bundlers to participate, making the network more decentralized. This ensures that there is no centralization of power and that the network can function more democratically.
Faster Adoption of Scalability Upgrades: ERC-4337 is designed to enable more rapid adoption of upgrades focused on scalability. This is achieved by avoiding changes to the Ethereum consensus layer, which can be time-consuming and complex.
Expanding the Possibilities of Blockchain Technology: ERC-4337 allows various innovative use cases, such as aggregated signatures, daily transaction limits, emergency account freezing, whitelisting, and privacy-preserving applications. These use cases can enable new possibilities for blockchain technology.
More Efficient Transactions on Ethereum: By enabling bundlers to package UserOperation objects into a single transaction, ERC-4337 can save time and gas. This can make transactions more efficient and cost-effective for users.
How ERC-4337 Can Revolutionize Crypto Wallets for Users?
ERC-4337 can potentially revolutionize the crypto wallet user experience and drive increased adoption. Here are some key benefits that ERC-4337 could provide:
Streamlined wallet setup: The hassle of writing down seed phrases could become a thing of the past. ERC-4337 allows for quick and easy wallet setup with just a few clicks, removing a significant barrier for new users.
Enhanced account recovery: With multi-factor authentication and account recovery, users no longer worry about losing their seed phrases. This added security feature makes wallet management worry-free.
User-friendly wallet functions: ERC-4337 enables various customized services, including auto-pay, pre-approved, and bundled transactions. These features make managing digital assets more straightforward and more accessible.
Improved security: By reducing the possibility of human error, ERC-4337 could lead to more secure wallets. Users will no longer need to hide their seed phrases under their mattresses, making it harder for bad actors to steal their digital assets.
Gas flexibility: ERC-4337-powered wallets can pay gas fees with ERC-20 tokens and beyond. This flexibility allows developers to create wallets that enable users to pay gas fees in various tokens, including fiat.
Overall, ERC-4337 is a vital standard that enables greater functionality, decentralization, and innovation in the Ethereum ecosystem and has the potential to make managing digital assets more accessible and user-friendly while increasing security measures. With these improvements, we may see a surge in the mass adoption of cryptocurrencies.
Final Thoughts
The jargon associated with crypto wallets, such as seed phrases, private keys, and public keys, can be intimidating for new users. Using crypto wallets remains a challenging process for many. To facilitate adoption, it is essential to simplify the average user’s crypto interface as much as possible.
ERC-4337 establishes the technical framework for innovative crypto wallets. This allows developers to transform the primary interaction point between users and crypto. It will be interesting to observe the impact that ERC-4337 will have on user experience and the crypto industry as a whole in the coming years.
References
1. https://eips.ethereum.org/EIPS/eip-4337
2. https://medium.com/infinitism/erc-4337-account-abstraction-without-ethereum-protocol-changes-d75c9d94dc4a
3. Discussion forum: https://ethereum-magicians.org/t/erc-4337-account-abstraction-via-entry-point-contract-specification/7160
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