ERC-4337 and Beyond: Advancing Account Abstraction

Account abstraction in blockchain transforms user interactions by replacing traditional accounts with programmable smart contracts, enhancing security and usability through features like customizable transaction rules and gas fee flexibility. The introduction of ERC-4337 standardizes this approach on Ethereum, facilitating advanced smart contract functionalities and modular development while maintaining compatibility and decentralization across the ecosystem.

James Patrick Dempsey

Updated on

Jun 26, 2024

James Patrick Dempsey

Updated on

Jun 26, 2024

Reviewed by

Reviewed by

Reviewed by

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  • Evolution in User Interaction: Account abstraction shifts from traditional accounts to smart contracts, empowering users with customizable security features and transaction rules, enhancing usability.

  • ERC-4337 Implementation: Introduces a pragmatic approach on Ethereum, enabling advanced wallet functionalities and flexible fee payments, maintaining compatibility and decentralization.

  • Strategic Advantages: Promotes easier onboarding, fosters modular development, and lowers entry barriers with innovative transaction fee options, driving mainstream blockchain adoption and application sophistication.

What is Account Abstraction in Crypto?

Account abstraction is a new concept that changes how users interact with cryptocurrencies and decentralized applications (dApps). At its core, account abstraction allows users to utilize smart contracts as their accounts, replacing the traditional externally owned accounts (EOAs) that have been the standard since blockchain's inception.

In the current blockchain model, users typically manage their accounts through private keys, which control EOAs. These accounts are simple and limited in functionality, primarily allowing for sending and receiving transactions. However, account abstraction introduces a more flexible and programmable approach to account management.

With account abstraction, user accounts become smart contracts themselves. This means that instead of being controlled solely by a private key, accounts can have complex, customizable logic built into them. 

Account abstraction represents a major step towards making blockchain technology more accessible and user-friendly, potentially accelerating mainstream adoption. By abstracting away the complexities of blockchain interactions, it opens up new possibilities for developers to create more intuitive and powerful decentralized applications.

Benefits of Account Abstraction for Users and Developers

Account abstraction offers advantages for both users and developers in the blockchain ecosystem, revolutionizing how we interact with and build on blockchain platforms.

For users, the benefits are substantial:

  1. Enhanced security: Smart contract wallets can implement advanced security features like multi-factor authentication, social recovery, and spending limits, reducing the risk of fund loss due to private key mismanagement.

  2. Improved user experience: Users can interact with dApps using familiar authentication methods, eliminating the need to manage complex seed phrases or private keys.

  3. Flexible fee payment: Users can potentially pay transaction fees in tokens they already hold, rather than always needing the native blockchain currency.

  4. Customizable account rules: Users can set personalized rules for their accounts, such as daily spending limits or whitelisted addresses for certain transactions.

Developers also gain numerous advantages:

  1. Simplified onboarding: By abstracting away blockchain complexities, developers can create more user-friendly dApps, potentially increasing adoption rates.

  2. Increased flexibility: Account abstraction allows for more complex and feature-rich applications, enabling developers to implement innovative functionalities.

  3. Gas optimization: Developers can batch multiple operations into a single transaction, potentially reducing gas costs and improving efficiency.

  4. Sponsored transactions: Applications can cover gas fees for users, removing a significant barrier to entry for new users.

  5. Modular development: The ability to separate account logic from application logic promotes more modular and maintainable code.

Introducing ERC-4337: The Standard for Account Abstraction

ERC-4337 is an Ethereum Improvement Proposal that implements account abstraction without requiring consensus layer changes to the Ethereum protocol. This approach allows for the creation and use of smart contract wallets with enhanced functionality and improved user experience, all while maintaining compatibility with the existing Ethereum infrastructure.

Key features of ERC-4337 include:

  1. UserOperations: Instead of traditional transactions, users submit UserOperations, which are pseudo-transaction objects that represent their intended actions. These can include multiple operations in a single transaction.

  2. Alternative mempool: UserOperations are sent to a separate mempool, distinct from the regular transaction mempool. This allows for specialized processing without affecting the main Ethereum network.

  3. Bundlers: These are new network participants that collect UserOperations from the alternative mempool, bundle them together, and submit them as a single transaction to the Ethereum network.

  4. EntryPoint contract: This is a central smart contract that acts as the gateway for executing UserOperations. It handles verification and execution of the bundled transactions.

  5. Paymasters: These optional entities allow for sponsored transactions, enabling users to pay gas fees in tokens other than ETH or even have their fees covered by third parties.

ERC-4337 differs from previous account abstraction attempts in several key ways:

  1. No consensus layer changes: Unlike earlier proposals like EIP-86 or EIP-2938, ERC-4337 doesn't require any modifications to the Ethereum protocol itself. This makes it much easier to implement and adopt.

  2. Backwards compatibility: ERC-4337 works alongside existing EOAs and smart contracts, allowing for gradual adoption without disrupting the current ecosystem.

  3. Decentralized approach: The use of bundlers and the alternative mempool maintains Ethereum's decentralized nature, avoiding centralized points of failure.

  4. Flexible account logic: Smart contract wallets can implement custom verification logic, enabling features like multi-signature requirements, account recovery, and spending limits.

  5. Gas abstraction: Through the use of paymasters, ERC-4337 allows for more flexible gas payment options, reducing barriers to entry for new users.

By implementing account abstraction at the application layer rather than the protocol layer, ERC-4337 provides a pragmatic solution to long-standing usability issues in Ethereum. It opens up new possibilities for wallet design and user interaction, potentially accelerating the adoption of blockchain technology by making it more accessible and user-friendly.


Use Cases and Applications of Account Abstraction

Several prominent implementations of account abstraction have emerged in the blockchain ecosystem, with major players like Coinbase leading the charge. Here's an overview of some notable implementations:

Coinbase Smart Wallets

Coinbase has introduced smart wallets as part of their Coinbase Wallet SDK, leveraging account abstraction principles. These wallets are built on Coinbase's Layer 2 network, Base, and are currently in the testnet phase. They offer a passkey-based experience, simplifying user interactions with blockchain applications.

Coinbase Embedded Wallets

In addition to smart wallets, Coinbase has launched embedded wallets based on the "wallet as a service" (WaaS) concept. These allow companies to create customized blockchain wallets for their customers, abstracting away crypto complexities and using familiar email and social login flows.

Safe (formerly Gnosis Safe)

Safe has partnered with Coinbase's Base network to encourage smart account development. They offer developers up to 1 ETH in gas fee credits and modular tooling for building smart accounts using Safe's open-source technology on the Base network.


Stackup provides a suite of open-source tools designed to simplify the implementation of account abstraction for developers. Their solution aims to address the challenges of managing interactions between different components in contract accounts.


Etherspot is actively involved in the account abstraction ecosystem, participating in working groups and contributing to the development of standards like ERC-4337.


ZeroDev offers a platform for building and deploying smart contract wallets, making it easier for developers to implement account abstraction in their applications.

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