ERC-4337 is a new standard that enables smart contract functionality for Ethereum wallets, also known as smart accounts. It allows users to interact with the Ethereum network without having to manage their own private keys or pay gas fees. However, despite its potential benefits, the feature has not gained much traction among users and developers.
ERC-4337, also known as account abstraction, is an Ethereum Improvement Proposal (EIP) that was authored by Ethereum co-founder Vitalik Buterin and six other contributors. It was first proposed in 2021 and finalized in 2023.
The main goal of ERC-4337 is to allow users to use smart contracts as their primary accounts, instead of externally owned accounts (EOAs) that require private keys and Ether for transactions. This way, users can enjoy the following advantages:
- Better usability: Users do not need to worry about seed phrases, gas fees, or transaction signing. They can use biometric authentication, social recovery, or other methods to access their accounts.
- More flexibility: Users can customize their accounts with arbitrary verification logic, such as multi-signature, timelocks, or spending limits. They can also use session keys to play blockchain games without constant approvals.
- Enhanced security: Users can store their keys on standard smartphone security modules, making them de facto hardware wallets. They can also use two-factor authentication or other security features to protect their accounts.
How does ERC-4337 work and who supports it?
ERC-4337 works by introducing a new type of object called UserOperation, which describes a transaction to be sent on behalf of a user. Unlike a regular transaction, a UserOperation does not contain a signature or a gas price, but rather a nonce, a gas limit, and a tip. The tip is the amount of Ether that the user is willing to pay to a bundler, a special type of node that packages UserOperations into transactions and submits them to the network.
The bundler is responsible for paying the gas fees and verifying the UserOperation against the user’s account contract, which contains the logic for validating and executing the UserOperation. The bundler can also apply reputation scoring and throttling mechanisms to prevent spam or abuse from malicious users.
ERC-4337 is compatible with every Ethereum Virtual Machine (EVM) network, including Polygon, Optimism, Arbitrum, Binance Smart Chain, Avalanche, and Gnosis Chain. However, the adoption of the feature depends on the support from wallet providers, dapp developers, and bundlers. So far, only a few projects have announced their plans to integrate ERC-4337, such as Argent, Gnosis Safe, and Gelato Network.
What are the challenges and opportunities for ERC-4337?
ERC-4337 is a promising feature that could improve the user experience and security of Ethereum wallets, but it also faces some challenges and limitations. Some of them are:
- High gas costs: On the mainnet, the gas costs for UserOperations could be prohibitive, especially for small or frequent transactions. This could discourage users and developers from using ERC-4337, unless they switch to cheaper networks or layer 2 solutions.
- Screen security: While storing keys on smartphone security modules is more secure than storing them on software wallets, it is still less secure than using dedicated hardware wallets. The screen of the smartphone could be compromised by malware or phishing attacks, exposing the user’s keys or transactions.
- Bundler centralization: The bundler role is crucial for the functioning of ERC-4337, but it also introduces a potential point of failure or censorship. If there are not enough bundlers, or if they collude or malfunction, the UserOperations could be delayed, rejected, or manipulated. Users need to trust the bundlers to handle their UserOperations correctly and fairly.
On the other hand, ERC-4337 also offers some opportunities and possibilities for the Ethereum ecosystem. Some of them are:
- Mass adoption: ERC-4337 could lower the barriers to entry for new users, who may find the current wallet system too complex or intimidating. By simplifying the wallet interface and abstracting the technical details, ERC-4337 could make Ethereum more accessible and user-friendly for the mainstream audience.
- Innovation: ERC-4337 could enable new use cases and features that are not possible or practical with the current wallet system. For example, users could create team wallets, charity wallets, or DAO wallets with custom rules and permissions. They could also use aggregated signatures, such as BLS, to save gas and increase privacy.
- Competition: ERC-4337 could create a new market for bundlers, who could compete for users by offering different services, fees, or incentives. Users could choose the bundler that best suits their needs and preferences, or switch between them as they wish. This could foster a healthy and diverse bundler ecosystem.
ERC-4337 is a new standard that allows users to use smart contracts as their primary accounts on Ethereum, without having to manage their own private keys or pay gas fees. It has many potential benefits, such as better usability, more flexibility, and enhanced security. However, it also has some challenges and limitations, such as high gas costs, screen security, and bundler centralization. The adoption of ERC-4337 depends on the support from wallet providers, dapp developers, and bundlers, who could also benefit from the opportunities and possibilities that ERC-4337 offers.