Ethereum Rolls Out Account Abstraction Across the Entire Blockchain

After a long period of development with no updates, Ethereum has unexpectedly announced the launch of Account Abstraction at the ETHDenver conference.

Ethereum Rolls Out Account Abstraction Across the Entire Blockchain. Source: WalletCon

At WalletCon, part of ETHDenver – the annual Ethereum community conference in the US – Ethereum developers surprised everyone by announcing the deployment of ERC-4337, also known as Account Abstraction.

What is Account Abstraction? A Simple Explanation of Ethereum’s “Abstract” Keyword

Ethereum divides user accounts into two types: External Owned Accounts (EOA) and Contract Accounts (CA).

EOAs are wallets that users obtain when signing up for a non-custodial wallet service like MetaMask, WalletConnect, Argent, Rainbow, Coin98 Wallet, and others. These wallets provide the owner with a public key (the wallet address) and a private key (the password to access the wallet and initiate transactions). Losing the private key means losing access to the wallet.

In contrast, CAs are controlled by code through smart contracts, allowing for multiple tasks and complex functions. CAs are the addresses of DeFi smart contracts, liquidity pools, token lock/unlock contracts, and more.

Recognizing the complexity and barriers of current wallet usage, Ethereum founder Vitalik Buterin proposed Account Abstraction in June 2022.

Account Abstraction’s Goal: Unifying EOA and CA

The aim of Account Abstraction is to merge EOA and CA into a unified solution that combines the advantages of both types of crypto wallets. Simply put, Account Abstraction transforms a user’s wallet into a smart contract.

This new feature offers several useful functions for Ethereum users, including:

• Integration with hardware wallets: Enables transaction authentication via 2FA, facial recognition, or fingerprint scanning.
• Social recovery: Allows wallet recovery in case of private key loss.
• Alternative transaction fees: Enables payment of transaction fees using tokens other than ETH.
• Multisig transactions: Supports multi-signature transactions for added security.
• Diverse signature algorithms: Uses various algorithms for signature encryption.
• Privacy protection: Eliminates relayers, enhancing user privacy without relying on third parties.
• Arbitrage tool: Can be used for arbitrage (profit from price discrepancies).

Challenges Ahead

Despite its benefits, Account Abstraction still faces some challenges. It needs a user-friendly interface to improve the user experience and must address issues related to gas fees.

According to Ethereum’s development team at ETHDenver on the evening of March 1, Account Abstraction has been deployed on the Ethereum network. ERC-4337 can be added to the blockchain without requiring a full network upgrade because it is an add-on smart contract, not a change in the core code. This smart contract can also be implemented on other EVM-compatible blockchains.

Ethereum has revealed that several non-custodial wallet developers will announce support for Account Abstraction soon, starting with Safe on the evening of March 1.