Published on Jul 13, 2023

Complexity Condensed: Ethereum Account Abstraction

Breaking down Ethereum Account Abstraction in less than 1,000 words.
Complexity Condensed

Whether you’re a miner, developer or user, you’ve probably gotten at least one scoff, blank stare or eyeroll when you’ve talked about Ethereum. Well, it’s time to tell those folks who “just don’t get it” to take several seats. 

Blockchain is finally ready to enter the mainstream, thanks to Ethereum’s recent protocol changes enabling the rollout of smart accounts, also known as “account abstraction”. 

Announced by Ethereum security fellow Yoav Weiss at this year’s WalletCon, the new ERC-4337 standard will enable smart contract-based accounts on every Ethereum Virtual Machine (EVM) compatible network. This upgrade will accelerate the widespread adoption of blockchain technology with a simplified user experience (UX) that doesn’t compromise security.

What is Ethereum Account Abstraction?

Blockchain isn't very user-friendly, which makes it hard to onboard new users. Despite its obvious benefits, reaping the rewards of decentralization hinges on a deep understanding of how the underlying technology works. Newbies no longer have to feel like they’re tiptoeing into a members-only club with a giant copy of “Crypto for Dummies” in their hand. Account abstraction eliminates the secret (and highly technical) handshake required to set up and use wallets, and interact with the Ethereum network.

How Does Ethereum Account Abstraction Work?

Currently, there are two types of Ethereum accounts:

  1. Externally Owned Accounts (EOA)

EOAs are used to initiate transactions and the default for most blockchains. Users control these using a signer, or pair of cryptographic keys:

  • Public key - The account address
  • Private key - A secret code (a seed phrase is one example) used to sign off on transactions, stored in a wallet

The issue with EOAs is they put an account’s security entirely at the mercy of human error, without fail safes like your mother’s maiden name or the name of your first pet to fall back on. The inherent link between your signer (the authorization required to spend your tokens) and account (the object holding all your tokens) means forgetting your signer or entering the wrong one loses you all your tokens. It also means that if anyone else gets ahold of your signer, they can access all of your tokens. If there’s anything the entire history of the internet has taught us, it’s that we humans are terrible at managing passwords.

  1. Contract Accounts (CA), or Smart Contracts

Unlike EOAs, smart contracts aren’t managed by human users. They’re self-executing programs that run on the Ethereum blockchain and are controlled entirely by logic written in code (instead of a private key). These are activated when instructed by an EOA and once deployed, they act independently and execute according to their code.

Smart contracts are customizable and flexible in functionality, but can’t execute on their own – They can only respond to transactions initiated by an EOA, or another smart contract responding to an EOA. Essentially, all blockchain transactions need to originate from an EOA. 

This is where account abstraction comes in. It allows smart contract-based customization so users can manage their wallets in a way that works best for them. 

Source: CodeZeroes

Why Account Abstraction Matters

ERC-4337 enables self-custodial “smart accounts” that contain their own logic, giving users full control of how they manage their assets. No more wallet setups that require jumping through technical hoops. No stressing over forgotten seed phrases. A simpler UX and better security mean mass adoption’s now possible.

“The next billion users are not going to write 12 words on a piece of paper,” said Weiss. “We need to give them better usability, they shouldn’t have to think about cryptographic keys.”

What This Means for You

Source: Medium / Cryptonator

ETH Gone Mainstream

Managing cryptocurrency will be as easy to use (and just as secure) as mainstream finance apps… But without any bank or third party acting as a middle man to sign off on transactions.

As as user, account abstraction will let you: 

  • Recover your wallet with a social login 
  • Store cryptographic keys on your phone’s hardware security module
  • Use two-factor authentication or biometrics to secure your wallet
  • Schedule automatic payments (to pay monthly subscriptions, for example)
  • Set a spending limit on your transactions
  • Use DApps without having to pay gas fees for every single transaction

DApps, democratized

Developers, you can now build blockchain-enabled apps without requiring your users to learn anything about crypto or download a wallet. Account abstraction means your user base can now expand from a few million (at best) to the rest of the world. 

Here are a few things you can do with ERC-4337:

  • Sponsor transaction fees for your users
  • Enable security features
  • Authenticate users with a social login
  • Recover accounts
  • Bundle smaller transactions together 
  • Let users pay gas or sponsor their transactions when they use your service

Smart contract-based wallets are already available, but further updates to Ethereum’s protocol are ongoing to make them as user-friendly as possible and enable even more. 

“When these wallets gain traction and users get used to this great usability, it’ll be easier to promote this change in Ethereum itself,” said Weiss. “It’ll be a game-changer for the ecosystem.”

Want to learn more about Account Abstraction. Read more on and check out Ethereum’s roadmap to create a more scalable, secure and sustainable network.

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