Ethereum founder Vitalik Buterin has been working on this technology since 2019. And it’s finally here! Basically, the new ERC-4337 might be a game-changer for all of the crypto industry in the long run!
“Smart accounts” are now enabled by the launch of the new ERC-4337 standard, and they are expected to help make crypto more user-friendly.
I mean, can you really imagine the average person having the time and patience to handle things like wordy seed phrases?
Will they willingly deposit their livelihood’s money into wallets if losing their private key means losing access to all their funds? And will they pay gas fees regardless of how much to carry on their transactions?
Well, it looks like the folks over at the Ethereum blockchain finally heard our prayers and came up with a solution.
In detail, the new Ethereum upgrade was announced at the end of February by Ethereum Foundation Researcher Yoav Weiss at WalletCon Colorado 2023. This was after it passed an audit by Open Zeppelin.
The rumors are true… ERC-4337 has been deployed on mainnet 🚀
🔍 Security audit by @OpenZeppelin
🛠️ Bundlers and paymasters by @stackup_fi, @AlchemyPlatform, @biconomy , @etherspot, @candidewallet, @blocknative & more
🏗️ $300K in grants by @ethereum pic.twitter.com/WOjMvaZe6M
— erc4337 (@erc4337) March 2, 2023
Will the new ERC-4337 standard encourage the non-crypto native masses to venture and adopt the Web3 way of things? And how do you suppose this will happen?
Well, by making things MUCH MORE accessible!
Will the community be bearish or bullish? And will the road to mass adoption start here? Let’s find out all about the knight in shining armor, ERC-4337!
What is ERC-4337?
ERC-4337 stands for Ethereum Request for Comment 4337.
However, when it first came into existence, they called it EIP-4347 (Ethereum improvement proposal 4347).
What does it do?
It avoids the need for a consensus-layer protocol.
Or in plain English and disregarding the confusing techy details… Ethereum wallets will now be able to function as smart contracts or more technically “Smart Accounts”.
The basis behind this new upgrade is known as Account Abstraction, but we non-geniuses probably don’t need to refer to it this way. And significantly, its main focus is enhancing the user’s experience.
What is Abstraction?
This technology allows us to simplify complex ideas or processes, making them easier to understand and use.
And in the case of Ethereum, account abstraction will allow users to use smart contract wallets containing arbitrary verification logic instead of externally owned accounts (EOAs) as their primary account.
In a nutshell, account abstraction is a way for Ethereum users to interact with the network using a single type of account. Consequently, less emphasis will be put on externally owned addresses.
As a result, this allows for a generalized approach to account types, which opens up many new possibilities for use cases.
What problems will ERC-4337 solve?
1) No need for seed phrases to secure your wallet:
“The next billion users are not going to write 12 words on a piece of paper.” What does this mean?
Instead of having to write down and store 12-24 words, via ERC-4337, users will have more Web2-esque recovery options aka normal options.
Now users can have a master key and guardians (other users, other apps, trusted platforms). Think of it like traditional regular banking minus the centralized entity.
If you lose your master key, your guardians can help in recovery. Most importantly, you will not lose any crypto or dear NFT you own forever.
2) Bundled transactions:
ERC-4337 wallets can process automated payments. Meaning, subscriptions are about to become as common in web3 as they are in web2.
Also, if you’re buying multiple NFTs, you can bundle those transactions and execute them in one click.
3) Session-timed signatures:
You can set your wallet to auto-approve txns while using an app. This has a huge impact on gaming since you can set it to auto-approve whenever playing a Blockchain game that might need signatures at intervals.
For example, approve signatures during 30 minutes of gameplay without having to sign every individual transaction. Furthermore, you can probably set approval, execute, and revoke the signature all in one swoop. One signature can do all of it.
4) Custom Limits and 2FA:
You can now set functions as you please and enable 2FA too. Basically, you can set your own spending limit. For example, not spending more than $100 daily can keep you from unnecessary degen plays.
5) External management & sponsored transactions with ERC-4337:
With ERC-4337, wallets can be set up & managed by 3rd parties, without requiring user setup. And those external parties can now pre-pay gas fees via “sponsored transactions”. This enables several features such as credit card purchases and more!
You are basically allowing someone else to cover the gas costs. Can imagine how beneficial this can be in onboarding newcomers? Imagine Metamask sponsoring gas fees for all transactions made on a new wallet.
ERC-4337: The Takeaway
Finally, if you’ve been in crypto long enough, you are probably accustomed to the cumbersome UX and hoops you have to constantly jump through to do regular things.
But the average user is not that Web3-educated. And frankly, they don’t have any time or energy for it. Since this new upgrade emphasizes an improved user experience, it’s automatically bridging the gap between Web3 and the average person.
ERC-4337 will make going into crypto and NFTs easier! Heck, even your Mom and Dad will start buying. So, why aren’t more people talking about the newest Ethereum upgrade?
Unfortunately, the community is too busy freaking out over some other things… Much of the focus in the last week has been on the upcoming Shanghai upgrade recently rescheduled to April.
The Shanghai upgrade will let holders of ether unstake the assets for the first time, giving them greater access to their holdings. Will the ability to unstake mean tons of ETH in the market?
Will it make more investors comfortable with the idea of buying and staking ETH? Add to that the whole unknown fate of NFTs and Ethereum in the hands of Gary Gensler and the SEC… All of it remains to be foreseen!
As always, stay tuned for more!