Why account abstraction is important and a practical pathway to achieving it

A majority of wallets today, such as MetaMask and Ledger nano, revolves around the use of a private key to sign transactions on the blockchain. However, the current experience of these wallets include several high friction points that might be slowing the adoption of cryptocurrencies for the average consumer.
Although this is a non-exhaustive list, we can start to see some of the more obvious UX hurdles in the wallet space that might be preventing wider crypto adoption. However, this is also the type of problems account abstraction aims to solve. Put simply, account abstraction allows us to implement all sorts of arbitrary and complex logic into our wallets compared to what’s currently possible with just a standard private key or seed phrase.
Account abstraction gives users the comfortable experience of traditional finance with the speed and efficiency of blockchains, without requiring custody. We believe this is the step change in user experience required to onboard the world to Web 3.0.
To date there has been a bunch of proposals for achieving account abstraction on Ethereum such as EIP-2938 and EIP-3074. These proposals however require a consensus layer change at a time where a majority of core development is being focused on the merge and then on shard chains to improve scalability. This is of course the right thing to do, since without scalability, blockchains (let alone account abstraction) won’t be feasible due to high transaction fees.
However a recent proposal is ERC-4337 and it sets out a standard for achieving the goal of account abstraction without consensus layer changes. This means it can be developed and adopted today without diverting core developers away from the Eth2 roadmap.
ERC-4337 proposes a bunch of systems that work together to enable a seamless wallet experience. An explanation of the implementation can be found in the EIP, but the five major parts are:
Let’s say you’re based in Australia and you wanted to send $1000 to a friend who’s based in the US. Through the traditional system you’d have to pay a bunch of fees and wait multiple days before your friend can receive the funds. However using the combination of scalable blockchains and account abstraction we can actually achieve an experience that’s 10x faster, better, and cheaper. Let’s see how this works using ERC-4337.
While all this complexity is happening in the backend, the user experience for you becomes incredibly simple. You’ve effectively managed to send $1000 USD in a single click to your friend while also paying for the transaction fee in the same currency (while not holding or knowing anything about ETH). If this was also done on a layer 2 network, then it would’ve been settled in seconds for less than a dollar in fees!
This article only outlines a short introduction to ERC-4337. For those interested in doing a deeper dive, be sure to read the original article by Vitalik Buterin and also the EIP proposal itself.
Account abstraction can also solve many more UX problems with todays crypto wallets. Besides just gas-less transactions, it could power other big features like social recovery, multi-sig, and abstracting away seed phrases. At Stackup, we’re committed to making Web 3.0 more accessible and we think account abstraction will play a significant role in achieving that goal.