In what could improve how account abstraction works on the Ethereum blockchain, Vitalik Buterin, the co-founder of Ethereum, along with other developers, has proposed Ethereum Improvement Proposal (EIP) 7702.
Account abstraction is a crucial aspect of Ethereum’s architecture, allowing for greater flexibility and innovation in how transactions are processed on the network. It does this by introducing programmable smart contracts as wallets.
Traditionally, users interact with the blockchain through externally owned accounts (EOAs) controlled by private keys, which can be complex and less secure. Account abstraction separates the control of assets from the account used to hold them, allowing for multi-signature wallets, social recovery mechanisms, and granular access control, significantly improving security.
The EIP-7702 proposal will allow users to batch multiple transactions into one transaction. The result is cheaper transaction fees as gas fees are reduced. EIP-7702 would also enable one account to pay the gas fees for transactions originating from another account. This will make the network more accessible for users.
“One common example is an ERC-20 approval followed by spending that approval, a common workflow in DEXes that requires two transactions today,” the proposal reads. “Advanced use cases of batching occasionally involve dependencies: the output of the first operation is part of the input to the second operation.”
Another implication of this proposal is that it will introduce a way for wallet administrators to grant limited permissions to subkeys. With this users will access only specific applications or functionalities within a wallet which will boost security.
For instance, a user might be allowed to spend “ERC-20 tokens but not ETH,” or the user could be limited to spending only a small amount of their total balance each day.
With EIP-7702, there’s a new feature where one account, let’s call it account X, can pay for a transaction on behalf of another account, say account Y.
Account X might receive payment in a different type of digital token (like ERC-20 tokens) for providing this service, or it could be a service operated by an app that handles transactions for its users without charging them.
Although the functionalities of EIP-7702 are similar to EIP-3074, however, it raises concerns about compatibility in the future. It introduces two opcodes, AUTH and AUTHCALL, which may become unnecessary if all users eventually transition to smart contract wallets.
This transition is expected because quantum computers could eventually compromise the security of ECDSA, the signature algorithm used by externally owned accounts (EOAs).
EIP-3074 also encourages the development of an “invoker contract” ecosystem, which could become distinct from the “smart contract wallet” ecosystem. This could potentially divide efforts and create fragmentation within the Ethereum community.
Read also; Vitalik buterin reimagines what memecoins could be in a new blog post and then he shares his thoughts on how quantum threats can be tackled in blockchains.
