Currently, the world of Blockchain is getting evolve constantly with new protocols and updates being introduced to enhance the technical capabilities. Introducing users to the world of crypto is quite a daunting task, as the concept of smart contracts and the usage of wallets make it difficult for non-developers to navigate the space.
So, Ethereum is looking to revolutionize this experience with its new protocol - ERC 4337 and EIP-4337 simply called 'Supercharges'. This blog will delve deeper into those seven alphanumeric terms called "ERC 4337" connected with account abstraction, explaining each topic as clearly as possible, together with a real-world example. So Let's get started.,
ERC4337 is the short-term for Ethereum Request for Comment 4337. This protocol is an upgrade done by Ethereum that permits Account Abstraction. This newly launched protocol was proposed by Ethereum co-founder Vitalik Buterin and others initially proposed EIP-4337 in September 2021 and declared at ETH Denver on March 1, 2023.
These protocols allow users to create more advanced smart contracts and decentralized applications that can interact with multiple accounts without the necessity of multiple transactions. Let's see the example of How the ERC4337 account abstraction feature can facilitate our work via smart contracts.
(i) Every time a technical change is proposed to the Ethereum Ecosystem, it starts as an Ethereum Improvement Proposal which is denoted as EIP.
(ii) Once it is accepted and authorized by the on-chain governance model, it transforms an Ethereum Request for Comment (ERC).
Let's imagine a Decentralized prediction market, where participants or we can say users can make bets on the outcome of an event, like the winner of any game like sports or the outcome of the election. When comes to the traditional prediction market, a central authority of the game plays the role of intermediate and manages the payouts and bets. Right!
However, In the Decentralized Prediction Market, smart contract plays a central authority role and manages the payouts and bets transparently, also there is no need to depend on trust in third-party.
When comes to the ERC-4337 account abstraction feature, a single smart contract plays as an owner of multiple user accounts, which enables efficient and more facilitated management of payouts and bets.
Ethereum Account Abstraction aims to merge features of the protocol's two existing account types:
(i) Externally Owned Accounts (EOA)
(ii) Smart Contract Accounts
The opportunities for what can be created with these ERC4337 Account Abstractions are endless. With this new feature, developers can create ease-to-use and average user's accessible smart contracts.
The benefit of ERC-4337 can be represented as a history of concepts related to account abstraction.
(i) Proposed in 2016-17
(ii) Empower Smart Contracts to initiate and approve transactions.
(iii) The owner of the wallet needs to sign off on transactions
(i) Proposed in 2020
(ii) Create a new type of top-level account that utilizes smart contract implementation and address-specific creation
(i) Proposed in 2020
(ii) Deliver Self-Executing Smart Contracts
Consider as if the consensus layer of smart contracts plays a backend role, and the execution layer acts as a frontend of the Ethereum Ecosystem. In 2021, EIP 4337 was proposed and authorized in 2023. The primary reason behind this time duration is it ensured zero consensus layer protocol changes.
Hope you have little knowledge about ERC-4337. It's the perfect time to trace the stimuli behind people embracing the "audited" version onto the Ethereum Mainnet.
(i) Current crypto wallets existing in Ethereum such as Metamask, imToken are Externally Owned Accounts (EOAs) powered by third parties.
(ii) The entire control to manage the user account is on the user's private key.
(iii) You can say goodbye to your account and its assets if you lose the private key.
(iv) ERC-4337 strives to alter this by creating accounts that are associated with robust smart contracts.
(v) Transaction fee payment was previously handled by centralized relays, but thanks to ERC-4337 and account abstraction, even this function has become decentralized.
To see Why this ERC4337 is important, it's crucial to understand why it was proposed and authorized in the first place. Compared to Unspent Transaction Output (UTXO) Module in Bitcoin Network, the Ethereum network has an account-based model which indicates that the protocol of Ethereum keeps track of and updates the account's available balances as transactions are verified.
As we mentioned above in the account abstraction topic, there are two types of account types, namely - EOA and Smart contract Accounts. Right! These two types of Ethereum accounts have their own functionalities.
(i) EOA - Owned and Controlled by Users
(ii) Smart Contract Accounts - Deployed on the Ethereum Network
Both account types are sent, receive and hold Ether or tokens.
Metamask - This indicates this wallet is limited by the rules set around EOAs.
Example of Smart Contract Accounts:
UniPass and Safe - This wallet are managed by Smart contract accounts rather than EOAs. But this wallet can achieve the same goal.
When comes to ERC4337, it combines both account's functionalities in one, which makes it easier to deploy preferred wallet features without any limitations.
UserOperation - Higher-layer Pseudo-transaction object which transmits similarities to rollups as both involve different versions of the idea of bundling. In ERC 4337, various users' UserOperation objects into a separate Mempool.
ValidateUserOp - It is a New function, that enables a wallet to be a smart contract at the same time.
EntryPoint - It is a new contract that is also introduced to serve as a security gate for the enactment of these new functions.
Goals that ERC-4337 Aims to Achieve
>> Account Abstraction
>> Save Time and Gas
>> Avoid Consensus Changes
>> Enable Innovative use cases
In general, ERC-4337 provides a good number of the features that traditional banks typically provide to their clients, all without requiring that the financial institution be trusted. Because of this, ERC 4337 may result in an enormous rise in the usage of wallets and NFTs. This protocol upgrade could be a turning point for the market, by making it easier to store, buy, secure, and retrieve assets.
ERC-4337 has made it much easier to trade in NFTs, create new smart contract wallets, subscribe to cryptocurrency newsletters, and play Web3 games. Most significantly, you don't need to be a techie to do any of this. So that in the future, It won't be an exaggeration to say that things will get much more effortless and obtainable for a normal user.
This upgrade of Ethereum's ERC-4337 and EIP-4337 Account Abstraction will likely drive a new wave of users into the world of crypto and blockchain. It is crucial to prioritize security measures to lessen risks. Overall, we are eager to observe how this upgrade will impact the growth of Blockchain technology.
Maticz - the top-notch Token Development Company has a strong understanding of the creation of tokens, technical aspects, and token standards like ERC-4337. We have a proficient team of experts who have technical knowledge in the blockchain field, which makes your idea to the next level with cutting-edge technologies. Are you the one who wants to create your token with ERC-4337? then fill out the form below to get a callback from one of our business experts.
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