欧博娱乐What is Account Abstraction? Definition, Compo
by Crypto & Blockchain Writer
Mensholong Lepcha
Mensholong Lepcha
Crypto & Blockchain Writer
Mensholong is an experienced crypto and blockchain journalist, now a full-time writer at Techopedia. He has previously contributed news coverage and in-depth market analysis to…
All Articles By Mensholong Lepcha
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Natalie Medleva
Educational Content Editor
Natalie is Techopedia's editor specializing in educational content. With a deep passion for technology and crypto industries, her expertise lies in transforming complex concepts into…
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Updated on 7 October 2024
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What is Account Abstraction in Blockchain?
Account abstraction is a technology that enables users to use smart contracts to manage wallet accounts and allows decentralized applications (dApp) to pay gas fees on behalf of their users.
In simple terms, account abstraction is a solution that looks to improve crypto user experience (UX) by eliminating the need to create traditional externally owned accounts (EOA) which are complicated to set up, use and maintain.
In this definition, we explain why account abstraction in crypto is important.
Key Takeaways
Account abstraction is a solution that looks to improve crypto user experience.
The technology introduces smart wallets that can be set up using passkeys and without having to download browser extensions and mobile apps.
Account abstraction also enables gasless transactions.
Coinbase introduced smart wallets in June 2024. These wallets are created onchain and powered by smart contracts.
Ethereum L2 chain Starknet implements native account abstraction, which means that all accounts on Starknet are smart accounts.
Table of Contents Table of Contents
What is Account Abstraction in Blockchain?
Key Takeaways
History of Account Abstraction and Its Importance
Components of Account Abstraction: How Does Account Abstraction Work?
Account Abstraction Wallets
Benefits of Account Abstraction
Real-World Applications of Account Abstraction
The Bottom Line
FAQs
References
Show Full Guide
Table of Contents
What is Account Abstraction in Blockchain?
Key Takeaways
History of Account Abstraction and Its Importance
Show Full Guide
Components of Account Abstraction: How Does Account Abstraction Work?
Account Abstraction Wallets
Benefits of Account Abstraction
Real-World Applications of Account Abstraction
The Bottom Line
FAQs
References
History of Account Abstraction and Its ImportanceIn order to understand what is account abstraction in Web3, we need to talk about UX problems that crypto users have been facing for years.
A first-time Web3 user needs a self-custodial crypto wallet to explore the world of decentralized finance (DeFi). The issue here is that there are too many friction points related to crypto wallet use resulting in many crypto investors shying away from the DeFi world.
Firstly, the management of crypto wallet seed phrases is seen as a tedious process. Every EOA crypto wallet requires users to safely secure a 12-word or 24-word seed phrase during setup.
Secondly, new users are not used to the concept of gas fee payment. But without paying gas fees, users cannot initiate onchain transactions. The need to acquire native tokens to pay for gas is a deterrent to DeFi adoption.
To solve these crypto UX problems, Ethereum (ETH) core developers proposed an Ethereum Improvement Proposal (EIP) named ERC-4337 in September 2021 to introduce account abstraction.
According to ERC-4337, the key goal of account abstraction is to completely remove the need for users to have traditional EOA wallets. Smart contracts wallets containing arbitrary verification logic are to be used instead.
One million Alchemy smart accounts have now been deployed onchain pic.twitter.com/Yki9bJyqsj
— Alchemy (@AlchemyPlatform) May 28, 2024
Components of Account Abstraction: How Does Account Abstraction Work?Here is a technical explanation of how account abstraction works on Ethereum.
According to ERC-4337, account abstraction introduces a new type of transaction called UserOperations which are not sent to the traditional Ethereum mempool before being finalized. Instead UserOperations transactions are sent to a different mempool meant specifically for them.
Here network participants known as Bundlers group multiple UserOperations transactions and send them to be verified.
ERC-4337 also introduces a smart contract known as the EntryPoint contract. This contract verifies and executes UserOperations transactions sent to it. Only one EntryPoint contract can exist on a chain.
Once verified, the transactions are included in the next Ethereum block by bundlers.
As we discussed earlier, account abstraction uses smart contract wallets instead of EOA wallets. Smart wallets are created by a smart contract called Account Factory contract.
Additionally, account abstraction also uses an optional smart contract account called Paymaster which enables applications to sponsor gas fees on behalf of users.
Paymaster enables gas abstraction on Ethereum. They also allow users to pay gas fees in ERC-20 tokens instead of native ETH tokens.
Smart contract wallets or smart wallets used in account abstraction are designed to function similarly to traditional EOA wallets like MetaMask.
Users can send tokens to their smart wallets as long as they know their correct wallet address. These wallets are also designed to be compatible with all blockchains that use the supported virtual machine (VM) (eg. EVM and SVM).
A key benefit that smart wallets offer over traditional EOA wallets is that users do not need to download a browser extension or a mobile app to set up a smart wallet.
Instead, smart wallets can live on your browser and can be set up and accessed using passkeys that are stored in your device.
Benefits of Account AbstractionHere are the benefits of account abstraction:
Real-World Applications of Account AbstractionHere are the real world applications of account abstraction.
Coinbase Introduces Smart WalletsIn June 2024, crypto exchange Coinbase introduced smart wallets that are created onchain and are powered by smart contracts. The company touted the smart wallet launch as a means to bring “a billion people” onchain due to its improved UX benefits.
Coinbase smart wallet can be created at the click of a button. Users can access their smart wallets using Face ID, Touch ID, Yubikey or Google Chrome profile.
The wait is over. Smart wallets are here. pic.twitter.com/jtXUNu1dq3
— Coinbase Wallet 🛡️ (@CoinbaseWallet) June 5, 2024
Starknet Implements Native Account AbstractionEthereum layer two (L2) chain Starknet (STRK) is known to implement native account abstraction, which means that all accounts on Starknet are smart accounts. Starknet does not support EOAs. All the infrastructure and decentralized applications on Starknet are designed and built for account abstraction.
In addition to fee abstraction, Starknet enables signature abstraction which gives users the freedom to customize account permissions.
Account Abstraction here, Account Abstraction there, but what does it really enable?
Well, we already have plenty of in-production AA-based features on Starknet, with much more to come over time 👨🍳
Here’s the power of Starknet’s native account abstraction.
1️⃣ 1-Click… pic.twitter.com/F8BIx7gMai
— Starknet 🐺🐱 (@Starknet) July 15, 2024
Gasless Stablecoin TransfersCoinbase offers gasless transactions on USD coin (USDC) and EURC stablecoin transfers on Ethereum L2 Base mainnet and Base Sepolia testnet.
Users can transfer these stablecoins without having to worry about acquiring native ETH tokens to pay for gas.
Coinbase's Smart Wallet now supports gasless USDC sends on Base 🚀
free, instant, global payments will materially increase economic freedom in the world
this mission got me into crypto. job's not finished but exciting to see progress
— nick.base.eth 🛡 (@Nick_Prince12) June 11, 2024
The Bottom LineBy removing friction points and concealing the complex underlying mechanism of blockchains, account abstraction aims to make Web3 as seamless as the Internet that we know today.
As the crypto industry looks to enter its next phase of growth, UX-focused technologies like account abstraction are crucial if cryptocurrency and decentralized finance is to see mass adoption. We hope that Techopedia’s account abstraction definition helps you understand how you can improve your crypto experience.
FAQsWhat is account abstraction in simple terms?
Account abstraction meaning in simple terms is a technology that looks to improve crypto user experience by eliminating the need of using traditional EOA wallets and replacing them with smart wallets.
What problems does account abstraction solve?
Account abstraction looks to improve crypto user experience by eliminating the need to create a traditional EOA wallets that can be complicated to set up, use and maintain which ultimately increases friction points for new crypto users.
What is the main purpose of account abstraction in the blockchain context?
The main purpose of account abstraction is to make blockchain use simple. It is done by offering users an easier way to set up crypto wallets and enabling gasless transactions.
What is meant by abstraction?
To “abstract” means to remove or extract something. In the context of crypto, account abstraction removes friction points that crypto users faces when setting up wallets and making onchain transactions.
References
ERC-4337: Account Abstraction Using Alt Mempool (Eips Ethereum)
Alchemy on X (X)
Coinbase Wallet (Wallet Coinbase)
Coinbase Wallet 🛡️ on X (X)
Starknet 🐺🐱 on X (X)
nick.base.eth on X (X)
Related Terms
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Mensholong Lepcha Crypto & Blockchain Writer
Mensholong Lepcha Crypto & Blockchain Writer
Mensholong is an experienced crypto and blockchain journalist, now a full-time writer at Techopedia. He has previously contributed news coverage and in-depth market analysis to Capital.com, StockTwits, XBO, and other publications. He began his writing career at Reuters in 2017, covering global equity markets. In his spare time, Mensholong enjoys watching soccer, finding new music, and buying BTC and ETH for his crypto portfolio.
All Articles by Mensholong Lepcha
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