What Is Account Abstraction In Crypto?
On Ethereum, there are two types of accounts; externally owned accounts (EOAs) and contract accounts (CAs). EOAs are controlled by someone with private keys and CAs are opperated by code and stored within smart contracts – usually within dApps and DeFi protocols.
Account abstraction merges EOAs and CAs into one standardized contract account. [1]EthHub – Account Abstraction
Why Is Account Abstraction Used?
Account abstraction reduces the number of wallets holding Ether and moves the functionality and logic of wallets from the core protocol to the Ethereum Virtual Machine (EVM).[2]Ismael Darwish/Nethermind.io – The History and Future of Account Abstraction
This turns wallets into smart contracts, each wallet/contract defining what a valid transaction may look like. This greatly improves the functionality and customizability of wallets, as the only requirement needed is to interact with an interface to execute and validate transactions.
Wallets can now be specifically tailored to one’s needs, rather than a one-account-fits-all.
Where Is Account Abstraction Used?
EIP-2938 introduced account abstraction, where a smart contract could be the top level account that pays fees and executes transactions.[3]EIP-2938 – Account Abstraction Although, this EIP has become stagnant.
ERC-4337, Account Abstraction via Entry Point Contract Specification, was introduced 25 days after EIP-2938. It is a proposal that would enable customizability to wallets while voiding the need for consensus-layer protocol changes.[4]Ethereum Improvement Proposals – EIP-4337: Account Abstraction via Entry Point Contract Specification
The benefits of using abstracted contract accounts include creativity in the design of users’ wallets such as multi-sig, social recovery, quantum-safe signature algorithms, upgradeability, and heightened decentralization making it a key feature of Ethereum after it merges into a proof-of-stake consensus.[5]EthHub – Account Abstraction These accounts will most likely be seen within Layer 2 protocols before eventually making their way to Layer 1 protocols on Ethereum in the near future.
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