An Externally Owned Account (EOA) functions by giving the user access to the account using a private key. Your personal signature and access pass to the blockchain account are contained in this key. You may communicate with apps and send and receive transactions using EOAs.

Features of EOAs

1. Seed phrase: EOAs often call for seed phrase setup, which is a mnemonic phrase that serves as both your account's access point and private key that you must either memorize or save safely.

2. Communication with smart contract accounts: EOAs are able to communicate with smart contracts, handle ETH balances, and send and receive transactions

3. Doesn’t require funding in order to be deployed on-chain.

EOAs are sold as hardware wallets (Trezor, Ledger, GridPlus) or software wallets (MetaMask, Trust Wallet, Rainbow).

Smart Contract Accounts

Smart Contract Accounts (SCAs), also known as Smart Accounts (SAs), differ from EOAs in that they are address keys and smart contracts (code) that are immutably connected to the blockchain. Thus, by utilizing Account abstraction (AA) and its advantages, this account type is able to carry out intricate tasks (on top of normal transactions).

Features of SCAs

1. Features like transaction batching, account/social recovery, multisig management, fee payment in stablecoins or other tokens, and savings on gas can be activated.

2. Enable plug-ins and SDKs for the EVM ecosystem integrations.

3. Initial funding is required for on-chain implementation.

UIs are combined with contract account capabilities to produce adaptable crypto management solutions. They may also be used with hardware wallets (or any other kind of account) to add an additional degree of security and/or privacy by turning on multiple signer features. Examples of SAs include Argent, Ambire (formerly AdEx), and Safe (spun from Gnosis).

Differences Between EOAs and SCAs

1. Account recovery is only available for accounts using smart contracts.

2. Control: Smart Contract Accounts follow rules encoded in the blockchain, whereas EOAs are guided by private keys.

3. Security: using smart contract accounts, users can combine various layers of protection, whereas user responsibility for EOAs governs security.

4. Creation: When the private key and the seed phrase are connected via the wallet user interface (software or hardware wallet), an EOA is started. When the address's corresponding smart contract deploys on-chain (fees apply), the smart contract account activates.

5. Gas fees: Smart Contract Accounts can have a variety of features for cost reductions or savings, however EOAs require gas dollars for Mainnet (ETH).

6. Functionality: On the Ethereum Mainnet, EOA is a fundamental tool for transfers and dApp engagement. On the other hand, Smart Contract Accounts provide a more flexible toolset with programmable logic and sophisticated Web3 and DeFi capabilities.