Ethereum Launches Smart Accounts through ERC-4337 - Making Crypto User-Friendly
Do you know? Ethereum has launched smart accounts through its new ERC-4337 standard. It provides an innovative solution to help the mainstream adoption of cryptocurrencies. The smart accounts are expected to transform the way new users onboard into the decentralized crypto world.
Let’s dig deeper into the blog and get the details about this new standard, its benefits, features, and implications for the future of cryptocurrencies.
Smart Accounts - Working Mechanism
Smart Accounts or Account Abstraction is a technique that aims to decentralize the entire system. This process involves a smart wallet that endorses a user operation, which is then sent to a special mempool (an orderly queue of transactions). Bundlers are similar to miners or validators. They retrieve user operations from the mempool and deliver the intended outcome back to the wallet.
Additionally, bundlers pay the gas fee required and receive compensation from the user’s contract account or a third-party. This technology allows users to convert their smartphones into hardware wallets in practice. But, the screen is still a security concern compared to conventional hardware wallets.
Smart Accounts - Highlighting The Benefits
The new ERC-4337 is expected to revolutionize the crypto space by making them more user-friendly. The account abstraction standard enables users to avoid the complicated process of setting up a wallet and remembering long seed phrases.
This technology also allows 2FA, signing transactions using fingerprints, or face-scan, monthly spending limits, and session keys for blockchain games. Moreover, users who lose their phone or device can use time-locked social recovery of their account via a group of trusted friends or even a commercial service.
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Account Abstraction vs. Smart Contract Wallets
Account abstraction provides a decentralized infrastructure called bundlers to pay for gas fees, while smart contract wallets from Argent and Gnosis require centralized components called relays. The technology has already been incorporated natively into zk-Rollup layer 2 solutions from StarkWare and zkSync, and Visa has designed an automated crypto bill payment system that makes use of it.
Challenges of ERC-4337 on Mainnet and Alternatives on Other EVM Chains and Layer 2s
ERC-4337 on mainnet has some challenges such as high gas costs and security issues, but it is expected to be viable on other EVM chains and Layer 2s that have low enough fees. The bundlers are permissionless, allowing anyone to run them, making the system uncensorable.
The Future of Smart Accounts and Their Impact on Crypto Adoption
Smart accounts are shaping up as a key theme for crypto in 2023, providing a huge win for crypto adoption and security. It enables users to avoid using words like 'gas' or 'nonce' to accurately describe what's happening, making it more understandable to the general public.
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