Account Abstraction and How it Benefits You

Account Abstraction and How it Benefits You

Account Abstraction is a buzzword right now in the web3 ecosystem. If you're still lost in the haywire, then read along. I'll help you establish an understanding of account abstraction in a nutshell.

Account abstraction in simple terms, means the separation of concerns between a user's wallet, and their private key. Currently, the only way a user can perform any transaction on the Ethereum blockchain is by signing the transactions with their private key. This means if you lose your private key, you cannot access, or make any transaction on that account. By extension, you are the sole custodian of your private key.

There are only two types of accounts in Ethereum:

  • Externally Owned Accounts: These are your regular wallet accounts. They hold your cryptocurrencies and NFTs. An EOA uses a cryptographic private-public key pair to handle validation for signing transactions on the blockchain. These accounts must also hold some native token(eg. ETH) to pay gas fees for successful transactions. If you lose your private key, you cannot communicate with the blockchain on that account.

  • Contract Accounts: These are on-chain and hold the smart contract logic and data. They can be programmed to execute any arbitrary logic. Functions in a smart contract can only be called by an EOA or another smart contract. They can also hold tokens and native tokens.

The problem with private keys

As humans, we tend to forget. There have been countless experiences of everyday people losing their private keys including web3 experts. Managing a wallet's private key has always been both a concern and a strong deterrent to the adoption of Web3. This means that despite the potential of web3, one is always at risk of losing all their funds. The problem account abstraction solves is majorly the issue of self-custodial keys. Imagine having a wallet that cannot lose your assets, even when your private key is compromised.

Account Abstraction to the rescue

Account abstraction is implemented by the introduction of a smart contract wallet. The leading proposal for a smart contract wallet is the ERC 4337. This standard enables user wallet accounts to become smart contracts on EVM blockchains. This means, the wallet can be programmed, hence, not tied to the same limitations that bound EOA. The ERC 4337 standard is generally accepted above other solutions because it does introduce any breaking change to the Ethereum protocol. It implements account abstraction at the application layer.

Advantages of smart contract wallets

  1. Custom Wallet Schemes: EOA by default uses a public-private key pair for validation. It implements the elliptic curve digital signature algorithm(ECDSA) which is a safe cryptography but with a smart contract wallet, you can basically code your own algorithms or switch to a better scheme. This makes the wallets more secure with choice expansion.

  2. Multi operations: Smart contract wallet can perform batch operations. For example, receiving an ERC token from a smart contract requires a user to sign approval, then sign again for the transfer. But with ERC 4337 standard, such operations can be batched and executed in one single call thereby improving user experience. You don't have to sign multiple transactions to perform a simple token swap.

  3. Paymaster: Developers can integrate features that allow gasless transactions with a user's smart contract wallets. Users, on the other hand, can also have another smart contract wallet pay gas fees on their behalf, as well as pay for others. This feature is really critical because it can help onboard more people into web3, by allowing dApps to pay for users' gas fees on their platform.

  4. Dynamic Access: Users can allow only the transfer of small amounts from their smart contract wallets. Higher transfers will then require a whitelisted wallet signature. This pattern improves security and greatly eliminates asset theft. Users can define different ways of interacting with their wallets.

  5. Future Proof: Smart contract wallet has been a yearning for the core Ethereum team since the inception of Ethereum. There have been about 4 proposals before the ERC4337, and what makes this the most appealing is its implementation without affecting the Ethereum protocol.

  6. Social Recovery: Users can set pre-defined account(s) that can be used to recover their accounts in the case of private key loss.


Account abstraction unlocks a whole level of security, user experience, and interaction with the web3 world. The concept of account abstraction implemented by smart contract wallets removes the current caveat associated with wallet accounts and allows for more innovation. An example of a wallet application that implements a smart wallet account is Argent X.

Furthermore, account abstraction enables a seamless experience as you do not have to worry about the underlying operations that go with owning a crypto wallet. Instead, you can use it like you would use any familiar technology. Everyone can enjoy the same benefits of flexibility, security, and most importantly, ease of use, irrespective of their knowledge level in the web3 ecosystem.