Asset security has always been the most important issue in blockchain investments, and wallets are used to store assets. If there is a problem with the wallet, not only will all assets be lost, but they may also be extremely difficult to retrieve. In digital currencies, just like various tokens, there are a wide variety of wallets with different names, such as cold wallets, hot wallets, hardware wallets, and so on. As an essential tool, every newcomer will choose a wallet they like. Some may not even know what type of wallet they are using and just sign up for it haphazardly. After actually using it, they find it much more complex compared to the convenient payment methods of Web2, but since asset transfer is troublesome, they are reluctant to switch.
I believe many of you have experienced such problems as mentioned above, whether it's yourself or your friends. So, is there a wallet that is both convenient, easy to use, and secure? Before starting our topic, please seriously think about the wallet that you currently use the most - is it really easy to use?
Recently, a piece of news about ERC-4337 and account abstraction (AA) caught my attention. It is reported that in March 2023, the Ethereum standard ERC-4337, which achieves account abstraction on the protocol without any consensus-layer changes, has been officially deployed on the Ethereum mainnet. You may wonder, what is ERC-4337 and how does it concern me? This short piece of news may not be as sensational as Ethereum forks or the listing of a new token, but for wallet designers and developers, it is nothing short of a bombshell! The account abstraction goal achieved by ERC-4337 means that the Ethereum network can support more programming languages and types of smart contracts. For users, using a smart contract wallet or smart account to replace externally owned accounts (EOAs) has become a reality; For wallet developers, it opens the door to user-friendly encrypted wallet designs, enabling encrypted wallets to have a wider range of use cases.
So, why is ERC-4337 so amazing? How should we understand "Account Abstraction（AA）"? Why does everyone need it?
ERC-4337 was proposed by Ethereum co-founder Vitalik Buterin and other developers in 2021 for establishing account abstraction. However, it was deployed on the Ethereum mainnet in March 2023, heralding user-friendly encrypted wallet designs. Why did Vitalik and his team devote a lot of effort to developing ERC-4337? If we want to analyze the reason, we need to know the main types of accounts on Ethereum and their advantages and disadvantages firstly.
In Ethereum, account abstraction aims to combine features of the protocol’s two existing account types: Externally owned accounts (EOA) and smart contract accounts. Unlike the Bitcoin network’s Unspent Transaction Output (UTXO) module, the Ethereum protocol uses an account-based model. That means the Ethereum protocol keeps track and updates accounts’ available balances as transactions are confirmed. The two types of accounts in Ethereum have their functionalities. EOAs are owned and controlled by users, while smart contract accounts are smart contracts that are deployed on the network. Both accounts can receive, hold, and send ether or tokens.
Most existing crypto wallets on Ethereum, such as MetaMask, are EOAs, meaning they are limited by the rules set around EOAs. These limitations include solely relying on private keys to access accounts and requiring all transactions to be signed. Because of this, wallet setup procedures and private key security measures are usually complex and not user-friendly. If users lose their seed phrase, it usually means losing access to the wallet. However, EOA is easy-to-use and has good privacy, and only requires keeping the private key safe to conduct transactions on the Ethereum network, so most Web3 beginners will choose this type of wallet.
Smart contract wallets such as UniPass and Safe are managed by smart contract accounts instead of EOAs and can achieve the same goal. However, as a wallet that centers around smart contracts, once vulnerabilities and errors in the contracts are exploited by attackers, it may lead to asset losses and other security issues. At the same time, developing a smart contract wallet is more difficult compared to an externally owned account (EOA).
In response to the advantages and disadvantages of the above two types of wallets, and based on practical situations, users often hold multiple wallet accounts to manage their digital assets as Ethereum 1.0 requires each account to be an Ether account. If a new smart contract is to be created, a new account must be created first, and Ether must be transferred into that account to pay for part of the smart contract fees. This greatly limits the flexibility of Ethereum and, because multiple accounts exist simultaneously, exacerbates network congestion, leading to low transaction efficiency.
So, going back to the original question, do you think the wallet you are currently using the most is user-friendly? I believe both EOA and smart contract wallets have some inconveniences to varying degrees. But, ERC-4337 eliminates such limitations by combining the functionality of the two types of accounts, making it easier to deploy the required wallet features.
ERC-4337 achieves account abstraction, which creates a new type of account by separating "transaction verification" and "transaction execution" by allowing accounts to exist as smart contracts. This transforms each account into a smart contract with its logic, and provides seamless compatibility, thus addressing the issues of EOA. This approach enables "personalized account customization", giving ordinary users a secure safety net and a smoother user experience without sacrificing their self-sovereignty. Ethereum needs this update to make wallet usage more user-friendly. For example, if a wallet's private key is lost, the account abstraction feature makes it easy to recover the wallet account without worrying that it cannot be found once it is lost.
With the abstract account feature, what changes can users experience? First, users can create "multi-signature wallets" that allow a group of users to access an account and require multiple users to sign a transaction as an additional security measure. Second, users can authorize transactions with numerous different keys. Third, users can change the signers of an account every week. Fourth, users can recover their accounts without relying on mnemonic phrases, such as through social connections. Finally, users no longer need to reserve extra ETH to pay gas fees for other ERC-20 tokens.
Currently, the core contract of ERC-4337, "Account Abstraction," has passed the secure audit by Open Zeppelin, and Vitalik is actively working to make it compatible with various Ethereum Virtual Machines (EVMs). However, due to the higher cost of smart contract wallets compared to EOA wallets, the cost of the AA function is even more pronounced. So, someone always needs to pay, whether it's end-users or applications subsidizing user activity. Therefore, the promotion of AA wallets still requires more support.
In the numerous Ethereum Virtual Machines (EVMs), KCC (KuCoin Community Chain), as the public chain of KuCoin, a leading global exchange, has strong technical support and resource background and has been closely following the development of AA accounts. According to Leandre’s tweet, a core member of the KCC GoDAO said that the official v0.5 version of the ERC-4337 EntryPoint contract was deployed on the KCC mainnet and testnet as early as March 30th, providing more flexibility and advanced capabilities for developing Account Abstraction on the KCC ecosystem. Following the version update, KCC announced the launch of the ERC-4337 Bundler service and V6.0 EntryPoint contract on April 23rd. This service will help developers focus more on developing AA wallets, while also helping Web2 users better enter the web3 world. At the same time, KCC has also partnered with Unipass, a pioneer of the ERC-4337 wallet. Unipass has integrated with KCC on-chain projects to improve the infrastructure of the AA track in the KCC ecosystem. This move undoubtedly reduces users' barriers to entry to Web3 and greatly improves the on-chain interaction experience.
The launch of AA wallets is a revolutionary change in the cryptocurrency industry, marking the beginning of a new era of intelligent accounts. I sincerely hope that more innovative and practical functions like this will emerge, and with the support of ambitious and powerful projects like BSC and KCC, quickly become popular, allowing Web3 to move towards a direction that is increasingly accessible to every ordinary person and truly make geek culture mainstream.
The entrance of Web 3.0: https://www.kcc.io/
The official website of Unipass Wallet: https://unipass.id/