DeFi
Vitalik Buterin has a new proposal to make Ethereum wallets easier to use – but obstacles remain – DL News
- A new proposal from Vitalik Buterin could help accelerate the adoption of account abstraction.
- Account Abstraction promises to make Ethereum more intuitive and secure to use.
- The update could take place as early as the fourth quarter of 2024.
DeFi on Ethereum is often clunky and unintuitive, with few guarantees for new entrants.
One highly anticipated improvement is account abstraction – a new way for Ethereum wallets to handle transactions.
There is still a problem.
Account Abstraction is incompatible with existing wallets, slowing adoption.
A recent proposal from Ethereum co-founder Vitalik Buterin could change that. Called EIP-7702, the proposal creates a way for existing wallets to use account abstraction, which was previously difficult to achieve.
“This is still a very early proposal, so we need to evaluate all the rough edges,” said Marius van der Wijden, lead developer of Ethereum. DL News.
EIP-7702 adds a new transaction type that allows existing wallets to emulate the functions of account abstraction wallets, Van der Wijden said.
If successful, the proposal will unlock new transaction types, prevent users from losing access to their funds via email recovery, and even facilitate new use cases for the leading smart contract network.
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Van der Wijden said EIP-7702 would likely be included in Ethereum’s next major upgrade – dubbed Pectra – scheduled for Q4 2024.
One step closer to adoption
Account abstraction has been around for a while.
In March 2023, a previous update introduced an Ethereum feature called ERC-4337, which allowed developers to start creating account abstraction wallets.
The lack of support for account abstraction, coupled with the lack of an easy way for users to switch to the new wallet type, has slowed adoption.
At the same time, another proposal, called EIP-3074, introduced a change that would allow those with wallets other than account abstraction to delegate their control to smart contracts, allowing users to access the account abstraction features.
Although EIP-3074 may make it easier to adopt account abstraction, many developers critical as this exposes user funds to increased risk.
The answer could be Buterin’s EIP-7702 proposal.
EIP-7702 aligns the two previous paths to account abstraction – EIP-3074 and ERC-4337 – into “a unified roadmap for account abstraction,” said Alex Jupiter, senior product manager at MetaMask. DL News.
The result is a simplified way for existing wallets to use all of Account Abstraction’s features without the risks of EIP-3074.
New transaction types
On the surface, Account Abstraction wallets work the same as existing wallets. But under the hood, they have the ability to use smart contracts to manage funds, enabling a host of new features that could help increase DeFi adoption.
The most obvious improvement is the ability to schedule transactions, allowing blockchains to replicate services offered by banks and other money transfer services, such as scheduling payments.
Payment provider Visa has already Underlines the potential of account abstraction for automatic payments.
The ability to sponsor transactions is another cool feature unlocked by Account Abstraction. Sponsoring transactions means allowing another party – such as a wallet provider, DeFi protocol or blockchain – to pay a user’s transaction fees.
Scheduling transactions can also help make using DeFi on Ethereum more intuitive.
Currently, when users want to trade tokens on a decentralized exchange or send tokens to another blockchain via a crypto bridge, they must sign multiple transactions at different stages of the process.
With Account Abstraction, everything can be consolidated into a single transaction, allowing for a smoother experience.
Have you lost your private key? Don’t worry
Account abstraction should also make using DeFi more secure.
When a user creates an Ethereum wallet, they receive a private key, usually summarized in a sequence of words called a recovery phrase.
This key is the only way a user can access their funds. If the key is lost, stolen, or if a user’s wallet is accidentally uninstalled or the wallet account is deleted, the funds they control could be lost forever.
With Account Abstraction, it is possible to implement a recovery process in which a user can designate multiple trusted people as recovery agents. This could be an email address or other forms of identification, such as Google Authenticator for two-factor authentication.
The process is similar to create and secure an account in the web2 world, but it is run through a decentralized network.
Tim Craig is a DeFi correspondent at DL News. Do you have any advice? Send him an email to tim@dlnews.com.