Web3 might look like a steep hill to climb for newcomers; wallets are the key to the blockchain on web3, but the user experience can be quite intimidating sometimes. From creating wallets, storing private keys, purchasing and transferring gas, gas fees, and signing every action performed on decentralized apps, it would feel like building Rome in one day.

This is where ERC-4337 and account abstraction come in.

What is ERC-4337’s Account Abstraction?

ERC-4337’s account Abstraction is a method created to enable users to access and interact with decentralized apps in an easy and more simplified way. It is a blockchain technology that allows users to hold their assets in smart contracts instead of using externally owned accounts (EOAs) as their default accounts.

Many possibilities come with this Ethereum update, such as easy recovery of wallets, transactions that do not require signing to give a go for your every move, and team wallets. With these updates, web3 becomes a green field of grass. It basically becomes safer, user-friendly, and faster.

Before we go into how account abstraction works, it is important we establish an understanding of Ethereum accounts. Both externally owned accounts (EOAs) and smart contract accounts are Ethereum accounts. Let’s take a look at them individually to get a grasp of what they entail.

Externally Owned Accounts (EOAs)

Externally owned accounts are wallets on the blockchain owned and controlled manually by users with private keys from outside the blockchain. This private key provides access to assets in the account.

The most important element of the EOA is the seed phrase, which is a string of 12, 18, or 24 random words generated when setting up a wallet. This seed phrase is then

used to generate the private key, which is then used to sign transactions.

The seed phrase is the failsafe in case users lose their private key and can’t access their assets. Therefore, users should keep their seed phrase offline to keep it safe from hackers and any kind of cyber theft.

Contract Accounts

Contract accounts are smart contracts that function as crypto wallets. They are separate accounts that form a means of interaction between various Ethereum smart contracts and contact stakeholders.

Contract accounts have a feature where various logic can be coded into the smart contract to customize transactions and enable an additional layer of automation to the execution of predefined actions or conditions. Contact addresses do not have seed phrases and, therefore, do not need a private key.

Some Differences between Externally Owned Accounts and Contract Accounts

Externally Owned Accounts

-Allow account creation with wallets.

-The address is extracted within 20 bytes of the public key hash.

-Require private key.

Contract Addresses

-Need EOA or an existing smart contract.

-Addresses are calculated when the contract is deployed.

-There is no private key.

As mentioned above, contract accounts need users to maintain an EOA with an ETH balance, and this is because they can only carry out instructions when a transaction from an EOA sets off the smart contract code. This is where account abstraction comes in.

How Account Abstraction Works

Account abstraction allows for the creation of smart accounts, which are independent smart contracts that can carry out transactions without an EOA. Any custom operation or function that can be defined in the context of smart contract code can be implemented in smart accounts.

The way account abstraction works is quite simple. Smart accounts use a “pseudo-transaction” object called UserOperations instead of sending regular transactions as EOAs do. The UserOperations object represents an operation that is to be carried out by the user.

The UserOperation object consists of multiple data elements that define the type of transaction, the token, the limit, the gas price, the signature used to validate the transaction, and other metadata. Whenever a smart account sends out unconfirmed UserOperations, they are stored in an area called the alt-mempool.

In the waiting area, these requests are then picked up by a bundler into a single transaction known as a bundle transaction, similar to nodes verifying regular transactions.

The bundle transactions are then sent to a global smart contract known as the Entry point, where every UserOperation goes through validation and is executed by calling a function called the validateUserOp.

After this, each smart contract wallet must then incorporate another function and carry out the operation provided by the Entrypoint contract.

Benefits of Account Abstraction

Some of the benefits of account abstraction include the following:

Beginner Friendliness

For newcomers who may be unaccustomed to the workings of blockchain, the technicalities of EOAs could look like a charging bull towards them. With the complexities of seed phrases and private keys, new users risk losing their keys to hackers and cyber theft; with account abstraction, users don’t have to worry about private keys and seed phrases.

Seamless Accounts and Multi-User Operations

Account abstraction allows easy adaptations and integration across diverse blockchain networks, including those compatible with the Ethereum Virtual Machine, such as Polygon, Avalanche, Arbitrum, etc.

Automation and Customization

Externally Owned Accounts (EOAs) do not allow users to customize or automate transactions, as each transaction must be signed individually. Account abstraction paves the way for automated payments and other automated processes.

Increased Security

Account Abstraction allows for different security upgrades, such as multi-signature control, the ability to freeze accounts, transaction limitations, and whitelist creation.

Challenges Account Abstraction May Face

Gas costs

Account abstraction is somewhat expensive. Having more control over the conditions of smart contract transactions and a better user interface comes with a cost. Smart contracts operate on high computational power, unlike EOAs, and therefore require more gas fees.

Adoption Challenges

Many users have already embraced EOAs, which have become akin to their comfort zone. However, when they encounter a second and unfamiliar path in the context of abstracted wallets, it may require some time to adjust and become accustomed to this new approach.

Conclusion

As Web3 continues to develop, various ways to bring more users on board into a friendly ecosystem are being developed. Most of them haven’t been perfected but are in the works. Account abstraction is one of those measures being put in place to promote a better user interface, user experience, and security in the web3 digital landscape.