The potential of ERC-4337 or ‘smart accounts’

The hotly anticipated “smart accounts” were revealed at WalletCon in Denver in March 2023. Also known as ERC-4337 or “account abstraction,” these accounts are expected to make a huge impact on the amount of newcomers to the crypto industry.

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Before getting into the benefits of ERC-4337, we have to understand that wallet creation was – and still is – challenging and confusing for non-crypto users. It creates barriers to entry that not everyone is willing to break. Newcomers to the industry face a raft of challenges, from securing seed phrases to sending their first transactions and hoping they go through. In other words, it is not very user-friendly for beginners.

Now, the newest Ethereum upgrade aims to break down some of those barriers and make wallet creation and use more accessible and easier. These are some of the major benefits that ERC-4337 can solve:

- Recovering lost private keys: ERC-4337 enables a “social recovery system” that allows users to restore the access to their wallet if they lose their private keys

- Securing wallets without seed phrases: Users can choose to use 2FA (two-factor authentication) and biometrics to secure their wallets. This makes crypto wallets more secure and user-friendly by not having to keep and remember all those difficult seed phrases

- Automated trading: With ERC-4337, users can set a monthly spending limit, AI trading, and adjusting yield farming positions. These features make trading much easier and more accessible

- Gasless transactions: NFT collections and their DAOs have the chance to sponsor gas fees, meaning that transaction fees will be lower, or even zero

The acceptance of NFTs can also take huge steps forward thanks to the Ethereum upgrade, which will make them easier to buy, store, secure and recover. ERC-4337 proposes features that traditional banks already offer, but in this case, users do not need to trust financial institutions. In order to secure mass adoption of the smart accounts, experts and developers have to learn how to connect with those who are not in the crypto space by communicating in an easier way, with less jargon.

Sources: cointelegraph.com, nftnow.com