Making Ethereum More User-Friendly: A Look at ERC-4337 and Smart Accounts

It's already HERE, the newest ERC Standard was launched to the Ethereum mainnet in March of this year.

In very simple words, ERC-4337 is a proposal that makes it easier for people to use Ethereum by simplifying the transaction process and eliminating the need for users to manage complicated cryptographic keys. Instead of using a private key to control your account, ERC-4337 allows you to use a smart account, which is governed by code and is more customizable. This change makes it possible to do more complex transactions on the Ethereum network and helps to make it more flexible and compatible with other technologies.

ERC-4337 uses something called Account Abstraction (AA) to achieve its goals. AA separates the process of making transactions on the blockchain from the underlying technology that supports it. This is done by moving certain verification processes from the core protocol level (consensus layer) to the smart contract level (execution layer) using the Ethereum Virtual Machine (EVM). Basically, when you create a transaction using ERC-4337, you can tell Ethereum to send the transaction to a smart contract instead of a regular account. The smart contract can then do things like move money around, just like a regular account can.

This is a important step forward towards enabling mass adoption because they enable the Ethereum network to become more flexible and capable of supporting more complex use cases. Prior to ERC-4337, only regular accounts controlled by private keys could send transactions in Ethereum, which limited the types of transactions that could be conducted on the network.

The ability to integrate with other technologies is also an important factor in the development of the Ethereum network. As blockchain technology continues to evolve, it is becoming increasingly important for blockchain networks to be able to work with other technologies, such as IoT devices or traditional financial systems. By making Ethereum more interoperable with other technologies, ERC-4337 can help to expand the range of applications that can be built on top of the network.

Account Abstraction (AA) has several potential use cases that can benefit users. With AA, users can use two-factor authentication, set monthly spending limits, use session keys, and time-locked social recovery. Additionally, AA allows users to store cryptographic keys on their smartphone security modules, turning them into hardware wallets.

Bundlers, which are a part of ERC-4337, pay for transaction fees and are compensated by the user's contract account or a third-party paymaster. This simplifies the onboarding process for new users and eliminates the need for them to learn complicated seed phrases or the technical process of setting up a wallet.

Moreover, AA allows dApps to implement new features and enhance the user experience, which can lead to higher retention rates. Some of these features include:

• Seedless logins - which allows users to create wallets without the need to understand or manage private keys. Instead, users can log in to their account using a username and password, which is more familiar and easier to manage for most of them. The private key is still used behind the scenes to secure the account, but the user doesn't have to worry about managing it themselves.
• Social recovery
• Batched transactions
• Sponsor transactions
• Pre-authorized payments

All these features are made possible by moving the validity conditions of a transaction from the core protocol level to the EVM smart contract level.

Overall, ERC-4337 is setting the stage for new and innovative crypto wallets. Developers can use this technology to create wallets that change the way people interact with crypto. It's really exciting to think about the potential impact ERC-4337 will have on the user experience and the crypto industry as a whole. Keep an eye on this technology, as it will undoubtedly shape the future of crypto in the years to come.

To get a more technical reading about ERC-4337, I leave here the link to Vitalik's (Ethereum founder) medium article, published in September 2021.

ERC 4337: account abstraction without Ethereum protocol changes | by Vitalik Buterin | Infinitism | Medium