On March 1 2023, ETH developers announced that EIP-4337 (Ethereum Improvement Proposal 4337) was deployed. This proposal allows for Account Abstraction (AA), which in short, allows smart contract to be wallets thus expanding wallet’s functionality to anything that can be coded into a smart contract.
A little history lesson: AA has been proposed since 2016 with EIP-86, these other proposals required consensus-layer change which was very difficult to pass. EIP 4337 relies on higher-layer infrastructure thus achieving AA without consensus-layer changes.
What is Account Abstraction:
Right now, when you think of a wallet on Ethereum, you’re likely thinking about an Externally Owned Account (EOA) which is a cryptographic pair of keys (private and public) where having the private key gives you the ability to sign to transactions
AA allows users to create smart contract wallets instead of EOAs. Since the contract is code, you can for example: define tiered permissions (i.e. 3 of 5 signatures to sign transactions), 2fa, expiration on keys, batch transactions, social recovery, transaction limits, apps can pay the transaction fee for end users, etc.
How is it implemented?
TLDR: mainstream users don’t deal well with seed phrases, seed phrases that allow you to do everything and if lost, nothing. Account Abstraction is an important step in making wallets more mainstream-friendly.
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