What You Need to Know About Account Abstraction

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“user experience sucks”

It’s true. Crypto user experience does suck.

But I’m sick of hearing it.

So let’s talk about the thing that will dramatically improve user experience.

Account Abstraction (AA).

You know those pesky seed phrases? Wouldn’t it be nice if you didn’t have to worry about them? Well, thanks to Account Abstraction (AA), it is time to say goodbye to seed phrases.

In fact, the whole wallet landscape is changing.

We have two kinds of accounts in the Ethereum world—externally owned accounts (EOAs) and smart contracts. We have used EOAs for wallets, and they require private and public keys to send and receive transactions. Smart contracts are controlled by code, not by private keys. The benefit of this is that it offers functionality - any custom login that you can code can be be added to this account. But there’s a problem. Smart contract can’t initiate transactions. This requires a private key.

Smart accounts are a new type of wallet. They are smart contracts that function as accounts. Smart accounts rely on code instead of private keys to secure and recover wallet information.

Hang on a sec.

Didn’t we just say that smart contracts can’t initiate transactions?

And now we’re suggesting that these smart accounts (which are really smart contracts) can function as wallets?

How does that make sense?

Don’t worry! You aren’t losing your mind. Getting around the issue is the whole point of account abstraction.

Let’s take a closer look.

Familiarity and decentralization. That’s what we get with Account Abstraction. Smart accounts make crypto/blockchain interactions feel familiar while preserving decentralization.

Before we go into how it works, let’s briefly touch on a few benefits.

Simple Sign Up: No more seed phrases or weird Chrome extensions. A new smart account can be created with your email address.

Frictionless Transactions: Transactions can be initiated seamlessly without complex approvals or multiple transactions to do one action.

Gas Abstractions: AA allows for gas to sponsored and/or paid in currencies other than the native token of the chain.

Security and Wallet Recovery: Most people don’t know how to handle seed phrases securely. Removing these public and private keys can increase security. And, perhaps more importantly, AA allows us to implement account recovery so that it is harder to lose access to funds permanently.

Increased Functionality: The EOAs we use today can be thought of as the Bitcoin blockchain. They are really good at sending and receiving assets; but they can’t do much else. Smart accounts are like Ethereum. They allow for expressivity and increased functionality. Any logic that can be written in code can be added to a smart account. The possibilities are endless.

Easy sign up, no gas fees, wallet recovery, functional wallets.

That all sounds incredible.

But how do we get there?

Getting rid of EOAs is no easy feat. And in truth, we can’t get rid of them completely. However, we can ensure that 99% of users never need to use an EOA again.

Here’s an outline of how submitting a transaction with Account Abstraction works:

Step 1: Ever heard of a UserOperation? In the Account Abstraction world, users create UserOperations. These are pseudo-transactions that contain all the pieces of information that represent the users’ intent. While normal transactions require a private key to be authenticated, UserOperation authentication is programmable and flexible. The UserOperation is submitted to a mempool that is specifically for UserOperations. This is basically just a collection of all UserOperations. They wait there for Step 2…

Step 2: A bundler is the bridge between UserOperation and actual transactions. Bundlers monitor the UserOperation mempool, collect multiple UserOperations, and combine them into a single transaction. Yes, bundlers do require EOAs. They build transactions and submit them to a smart contract onchain (discussed in the next step). In an AA ecosystem they are the only participants that need EOAs.

Step 3: The Entry Point contract is aptly named. It is a one-of-a-kind smart contract that accepts transactions from bundlers. In this contract, the transactions are authenticated and executed.

There are two other components of Account Abstraction. They both increase functionality and flexibility of the system.

A Paymaster is a smart contract that gives us the ability to control who pays for gas fees and how they do it. This allows for sponsored gas fees and the option to pay for gas in any other currency. Sounds pretty incredible, hey? A paymaster isn’t strictly required, but it adds this extra magic, so it comes highly recommended.

An Aggregator makes it easier to handle the verification of signatures. That may sound complicated, so here’s what it means. This smart contract can accept multiple transactions that are each signed in their own way. Then, it can generate one signature that verifies all the received signatures. This saves on costs and makes the bundlers’ work easier.

If you’re still reading this, thank you!

I appreciate the time you’ve given me, and I hope that this helped you better understand Account Abstraction.

Wishing you all the best,

Mordi

Founder @ Arena Studios

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What you need to know about Account Abstraction

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