What is Account Abstraction?

Introduction

Account abstraction is a blockchain system paradigm in which smart contracts exclusively hold assets, not externally-owned accounts (EOAs).

The Status Quo:

• Today there are two account types on Ethereum: Contract Accounts and Externally Owned Accounts (EOA are regular user accounts).
• For anything to happen on-chain, a transaction must be initiated and paid for by an EOA.
• The way you control an EOA is through its private key. You use this private key to create a signature proving to the blockchain that it’s your account and that you have authorised an action on it.

Account abstraction in a blockchain system refers to separating the control of an account from its associated private key. This allows an account to be controlled by a smart contract rather than simply a private key. The smart contract representing the account will still likely require signatures from one or more private keys in order to perform certain activities, but others can be delegated to the smart contract based on predefined logic.

This powerful concept enables developers to build complex decentralised applications that were not possible before. With account abstraction, smart contracts can interact with other smart contracts in a trustless and secure manner without the need for a central authority to mediate the transaction.

Account abstraction also allows for new types of transactions to be created. For example, with account abstraction, a smart contract can pay transaction fees on behalf of a user, or a smart contract can bundle multiple transactions together, reducing the overall transaction cost.

The Benefits

The introduction of account abstraction has the potential to revolutionise the way we interact with blockchain systems. It allows for a more flexible and efficient blockchain ecosystem supporting a wide range of decentralised applications.

One of the most significant benefits of account abstraction is that it creates more sophisticated smart contracts.?Therefore, this means that smart contracts can execute more complex logic, interact with other smart contracts, and even hold assets on behalf of users. An example of this is an experiment conducted by VISA using the StarkWare platform. VISA used the account abstraction feature available natively in the StarkWare zero knowledge rollup platform to enable auto payments for self-custodial wallets (a feature similar to direct debit or standing order). Read more about:

Account abstraction also enables more sophisticated and secure self-custodial wallets and wallet recovery. Examples of this include Argent, and Braavos.

Braavos is particularly interesting in that it leverages account abstraction to use the private key stored in a mobile phone secure element to sign blockchain transactions. The iPhone, for example, has a secure element holding a private key that requires biometric identification to sign a transaction, which is used to sign Apple Pay transactions today. This key is not a standard blockchain account key, but account abstraction allows a smart contract to validate this key and therefore use it to sign blockchain transactions.

The Risks

Despite the benefits of account abstraction, there are also some potential drawbacks to consider. For example, it can make tracing the flow of funds within a blockchain system more challenging. It can also introduce new attack vectors that malicious actors could exploit.

To mitigate these risks, it is essential to implement robust security measures and conduct thorough testing before deploying any smart contracts that use account abstraction.

Conclusion

In conclusion, account abstraction is a powerful concept that has the potential to revolutionise the way we interact with blockchain systems. It enables developers to build more sophisticated wallets and create new types of transactions. While some potential risks are associated with account abstraction, with careful planning and implementation, it can be a valuable tool for building decentralised applications.

Other Resources

About Applied Blockchain

Applied Blockchain is a software development studio specialising in applications of blockchain technology and cryptography.

Since its founding in 2015, our company has developed blockchain-based products for some of the largest companies in the world, including Shell, United Nations, Toyota, and some leading blockchain companies, including Ledger, Algorand, and Chainlink.

With our expertise in blockchain technology, we guide businesses and deliver innovative, best-in-class solutions for business-to-business and business-to-consumer transactions, trading, and financing (DeFi).

We advise on the most effective and robust data privacy techniques based on many years of experience testing, building, and experimenting with the most advanced cryptographic technologies.

Additionally, we are building key infrastructure components to support blockchain applications and solutions.