Introducing ERC-4337 and account abstraction: Ethereum's game-changing new standard

The crypto space has witnessed a remarkable variety of new token standards and exciting innovations. For example, the emergence of BRC-20 brought new possibilities to the Bitcoin network.

Now, Ethereum has ERC-4337, which promises exciting new possibilities for the Ethereum ecosystem and wider Web3 adoption. Read on to find out more.


  • Enhances Ethereum wallets: ERC-4337's smart wallet agreements offer adaptable protection and features, allowing for versatile management of wallets through account abstraction.

  • Subsidizes transaction fees: Enables subsidies for transactions, ultimately cutting expenses and increasing accessibility to Ethereum.

  • Supports ERC-20 for fees: Provides the option to pay transaction fees using ERC-20 tokens, expanding the range of choices beyond solely relying on Ether (ETH).

  • Prioritizes privacy: Combining signatures improves privacy and security, safeguarding personal information while conducting transactions.

  • User-friendly innovations: Using elements such as biometric identification and time-based social recovery enhances convenience and protection. This streamlines the process of accessing and retrieving wallets without requiring intricate protocol modifications.

What are ERC-4337 and account abstraction?

ERC-4337 is an Ethereum standard that gives you access to smart wallet contracts. Smart wallet contracts allow you to program your wallet for greater security and usability through what's called account abstraction. Account abstraction upgrades the Externally Owned Account (EOA) — an Ethereum account required to interact with the Ethereum network — so it can be controlled by smart contracts. The result? Greater flexibility to program your own security rules, simpler account recovery should you lose your keys, and the option for social recovery.

ERC-4337 also allows for subsidized transaction fees, which means that you may have your transaction costs partially or fully covered by external sources. This opens up possibilities for more affordable and accessible transactions on the Ethereum network.

Another significant feature of ERC-4337 is the ability to pay transaction fees with ERC-20 tokens. This means that instead of paying fees exclusively in Ether (ETH), you can use other tokens built on the Ethereum blockchain to cover transaction costs. This introduces a new level of flexibility and convenience should you hold various ERC-20 tokens in your wallets.

Preserving privacy

Alongside usability, one of the most significant aspects of ERC-4337 is its privacy features, which address concerns about data confidentiality. These features enable you to engage in transactions while safeguarding your privacy and sensitive information. To achieve this, the token standard incorporates aggregated signatures, which enhance security and reduce transaction costs by combining multiple signatures into a single, more efficient signature.

ERC-4337 goes beyond technical advancements by introducing user-friendly wallet features. These features include biometric authentication, allowing you to access your wallet using fingerprint or facial recognition to simplify the login process and enhance security.

Meanwhile, time-locked social recovery provides a safety net for wallet access, allowing you to recover your account with the assistance of trusted friends or family members if you lose access to your wallet. What makes ERC-4337 even more remarkable is its implementation as an ERC standard, rather than requiring a complex protocol update.

This streamlines the adoption process, saving time and effort while providing compatibility with existing Ethereum infrastructure. As a result, the features of ERC-4337 are more readily available to all users, fostering Ethereum's growth and attracting newcomers to the world of cryptocurrencies.

The origins of account abstraction

Account abstraction, an intriguing concept in the Ethereum ecosystem, has been the subject of deliberation and exploration for several years. In 2016, Vitalik Buterin presented EIP-86, a proposal to enable smart contracts to initiate and authorize transactions. However, EIP-86 was never rolled out because it would have required changes to the Ethereum consensus layer.

In 2020, EIP-2938 and EIP-3074 were introduced, allowing smart contracts to be used as accounts. But similar to EIP-86, these two proposals would also require changes to the Ethereum consensus layer.

In response, ERC-4337 was proposed in 2021, presenting a solution that enabled account abstraction using a separate mempool. As a result, this approach required no consensus layer modifications.

The Ethereum community welcomed the introduction of ERC-4337, appreciating its ability to support account abstraction while maintaining the stability and integrity of the network.

Potential drawbacks of ERC-4337

ERC-4337 does have some limitations when observing its impact on the Ethereum network.

Higher gas fees

Gas fees are a primary drawback. Transactions using the ERC-4337 standard may incur higher gas costs than regular transactions, potentially making them less affordable for certain users. Gas fees are a fundamental part of Ethereum's blockchain, serving as the mechanism for allocating resources and preventing spam and abuse. However, the increased gas costs associated with ERC-4337 could create barriers to adoption and usage, limiting accessibility and hindering widespread acceptance of the standard.

It's crucial to balance the cost of transactions and the benefits offered by ERC-4337 to guarantee its viability and inclusivity within the Ethereum ecosystem.

Centralization concerns

Another challenge for ERC-4337 is the potential for increased centralization. The standard relies heavily on smart contracts to manage accounts, which raises the possibility of a few developers and organizations gaining control over the underlying infrastructure.

This concentration of power contradicts the decentralized principles that Ethereum aims to uphold. Centralization can introduce risks such as limited transparency, biased decision making, and reduced user trust. Therefore, it's essential to make sure the development and governance of ERC-4337 remains inclusive, transparent, and open to community participation.

Added complexity

The arrival of ERC-4337 may bring increased complexity to the Ethereum ecosystem. The standard introduces new concepts and features that may be more challenging for developers to understand and apply effectively. This complexity could lead to errors and security vulnerabilities, potentially compromising the overall stability and security of the Ethereum network.

Mitigating the drawbacks

Many believe it's possible to address the drawbacks of ERC-4337 by providing comprehensive documentation, educational resources, and developer support. These actions can help developers to effectively navigate the complexities of ERC-4337 and create secure and robust applications.

What's next?

As Ethereum continues to push boundaries, other blockchains may need to incorporate similar features to remain competitive. This competition could drive innovation, benefiting users by creating a more dynamic and diverse ecosystem of blockchain platforms.

We're proud to be a part of a collaborative effort in building ERC-7579, along with Rhinestone, Biconomy, and ZeroDev. ERC-7579 tackles a common problem — the complexity and rigidity of existing standards, notably ERC-6900.

While ERC-6900 advanced the development of modular smart accounts, ERC-7579 sought to simplify the approach further. It focused on standardizing essential interfaces for smart accounts and modules, offering developers greater flexibility and creativity without the burden of heavy restrictions.

The buzz surrounding ERC-7579 is due to the urgent demand in the blockchain arena for a consistent standard that can reduce division and enhance the compatibility of smart accounts.

The success of ERC-7579 hinges on its compatibility with ERC-4337 for account abstraction. This harmonization of standards allows smart accounts to seamlessly communicate with different decentralized applications (DApps), providing users with a uniform and user-friendly experience, irrespective of the technology used.

Before ERC-7579, smart accounts functioned independently, posing difficulties for developers to create modules that could work on different platforms.

The final word

The blockchain space continues to evolve with notable innovations such as ERC-4337 on Ethereum, which promises enhanced usability and wider Web3 adoption.

This standard introduces smart contract wallets with customizable security and simplified account recovery. It also uses ERC-20 tokens for transaction fees, making it more accessible and user-friendly without complicated protocol changes.

The development of ERC-7579 seeks to simplify blockchain standards by focusing on essential smart account interfaces. By improving compatibility and effectiveness between various platforms, ERC-7579 can effectively work alongside ERC-4337.

These developments mark a significant stride towards creating a more cohesive and accessible blockchain network, and could significantly strengthen Ethereum's position in the blockchain space.

Articles connexes
Afficher plus
Afficher plus