Unlocking the Crypto User Experience: A Look into ERC-4337's Smart Account Standard

For those of you who have ever used a self-custody wallet and transferred funds on-chain, then I think you'll agree that the whole setup is bonkers. It's complex, nerve-wracking, and possibly quite lonely if your experience was anything like mine - I had no crypto friends to turn to when I did this. It's reserved for the small portion of society that either isn't fazed by the risks or has swallowed the blue pill and are ready to dive head-first into the Matrix.

Crypto adopters worldwide can probably agree that the user experience must improve considerably if we are to welcome the next billion people to the network. We can't have people burning seed phrases onto fireproof metal plates and hiding them in frozen soup at the bottom of their freezer as a form of security forever. We're just too used to fingerprints and facial recognition tech, and isn't crypto, after all, meant to be technological advancement?

That's why the deployment of Ethereum standard ERC-4337 this month is such a big deal. This improvement is a huge step towards unlocking big pieces of functionality and improving the user experience in crypto, breaking down the barriers to mainstream adoption. In this article, I will explain what ERC-4337 is, how it can be used, and what the future implications of this upgrade are.

What is ERC-4337?

ERC-4337 was deployed on March 2nd and is a new standard that has been in development since the birth of Ethereum in 2015. It is also known as "account abstraction" and re-coined as "smart accounts" to make it sound less confusing. But don't let the names distract you. Essentially, it means that smart accounts can be created, allowing users to control their wallet using a smart contract. The benefits of this are that smart contracts are far more versatile in their ability to execute actions than standard self-custody wallets are. Standard wallets can give or revoke permission and sign transactions, but they can't execute conditional permission such as ‘if this, then do this”. Smart accounts can. This improves the overall user experience and security options for users. For example:

1. Users no longer have to use a seed phrase to recover their wallet. Their private keys can be saved using the infinite options within smart contract logic. This could be anything including using your smartphone’s security system to protect the private keys. Lost the private key? Smart accounts can facilitate its recovery in a decentralized and highly secure manner.

2. Normally, every single transaction on a wallet usually requires approval, and this can become a painstaking process, especially if you're using a ledger. With smart accounts, users can batch transactions together, set daily/monthly spending limits that don't need approval, and set up recurring payments like subscriptions.

3. Users can define specific access rules depending on a whole host of factors. It simply requires setting the logic the users require. For example, a "session key" can be created so that every time a user plays a specific game, they're not required to constantly approve every transaction required in-game.

4. Gas fees: dApps can set a logic whereby they sponsor user gas fees to attract more users.

These are just some of the use cases for this technology, but the possibilities are endless! Unsurprisingly, the co-author of ERC-4337, Yoav Weiss, said, "It gives you the same features a bank would without having to trust a bank." I would go one step further and say it gives you all the features of a bank without needing the permission of a bank.

ERC 4337 is a much-needed piece of blockchain infrastructure that will greatly improve the user experience. The more familiar and secure web3 can feel to the average person, the more confident they will be in dipping their toes into this space. Despite the high drama from the markets in recent days and the impending regulatory challenges, web3 developers continue to quietly build the vital infrastructure that will tip us into mass adoption. It’s simply unstoppable. Blink, and you’ll miss it!