Original author: Colin Chan, Binance Research

Compilation of the original text: Deep Tide TechFlow

Account abstraction is very popular recently.

In the past July, nearly 300,000 smart contract accounts were created. At the same time, players in the market are also eager to try:

OKX and others have launched smart contract wallets, StarkNet and zkSync also have native support for AA solutions, Cyber ​​Connect and Lens are also making efforts...

Jump out of the discussion of what AA is, how is AA currently developing, what is the ecological landscape, feasible use cases, and the ins and outs of development? From various articles and analysis, we often only get fragmented impressions, but cannot systematically grasp the panorama of the track and technology.

In the past two days, Binance Research has released an account abstraction report, which systematically describes and analyzes the above issues. Since the report is long, Shenchao has interpreted and refined the report to help everyone better understand the core ideas and conclusions.

key points

• With the introduction of ERC-4337, Account Abstraction (AA) can now be supported on the Ethereum mainnet without changes to the core consensus layer.

• StarkNet and zkSync have already launched native account abstraction solutions, and wallet providers such as Argent and Bravoos are also looking to provide these solutions.

• Use cases such as traditional institutions Visa are also pioneering in this space, and Lens Protocol and CyberConnect are also adopting account abstraction, which are proven to demonstrate the realized and potential benefits to encourage users to join the Web3 environment.

AA technical realization

• Regarding the classification of Ethereum accounts, such as the difference between EOA and AA, I will not go into details here. If necessary, you can view the original text of the report.

• The general technical implementation of AA: can be understood through the key components in the diagram below, which interact to allow developers to build smart contract wallets that are compatible with on-chain dApps.

  The summarized process is as follows:

• On the front end, users interact with an abstraction layer that translates user actions into underlying transactions.

• The EntryPoint smart contract is responsible for verifying user signatures and processing transactions initiated by the abstraction layer.

• The Paymaster contract is responsible for paying transaction fees for user actions.

• On-chain applications interact with user actions just as they would with normal externally owned accounts.

AA ecological map

The AA ecosystem has continued to expand over the past year as developers recognize the need for a clearer user experience and friendlier interactions between users and wallets, applications, and end users.

By implementing AA, this helps in ways that enhance existing infrastructure and expand the possibilities for users to participate in on-chain activities. Progress in this area can be broadly categorized into two parts, Infrastructure and Social. The specific players are shown in the figure.

Participating roles in the infrastructure sector:

• Blockchain: AA-enabled EVM-compatible blockchain and zk-rollup scaling solution.

• Wallet Provider: A wallet that utilizes AA to provide users with specific functions.

• Payment: The fee abstraction capability is provided through the Paymaster contract, and users do not need to own the native token of the blockchain to perform digital transactions.

Participating roles in the social sector:

• Gaming/NFTs: Adopt AA and token standards such as ERC-4337 and ERC-6551 to improve the on-chain gaming experience and expand the utility of NFTs.

• Social Media: Combined with forms of AA such as Signature Abstraction, allowing users to continuously use Web3 wallets to interact with social networks.

Market acceptance of AA

• Key: The ERC-4337 EntryPoint contract was officially deployed on March 1 this year. Since then, trading activity and the total number of ERC-4337 smart accounts have surged, especially in July.

• The number of smart accounts has increased steadily, with nearly 300,000 accounts created in July, and the corresponding user operation activities have increased sharply.

• Most AA activity is driven by Polygon. This is due to the launch of the social network CyberConnect, where all accounts are ERC-4337 wallets.

AA Use Cases at a Glance

To understand the use cases for AA, the report highlights key infrastructure projects implementing new capabilities using token standards such as ERC-4337 and ERC-6551. With the fundamental goal of improving end-user UX, these projects aim to drive practical adoption of blockchain technology.

Payment use cases based on Paymaster

• Paymaster is a component of ERC-4337. It is commonly understood as an intermediary that can receive tokens used by users and convert them into blockchain native tokens to pay handling fees.

• Related cases are as follows:

• VISA: Visa demonstrated a solution using the Paymaster contract to abstract away basic blockchain interactions and improve the on-chain user payment experience through a self-hosted smart contract wallet. Currently, this case is still in the proof-of-concept stage, but the purpose is to reduce the friction for users to conduct transactions through their wallets. Users can pay gas fees with any token, and Paymaster will cover the gas costs, exploring the future of digital transactions for consumers. development potential.

• In addition, VISA also has other initiatives aimed at allowing users to pay gas fees using their visa card.

• Other uses of the Paymaster contract:

• Steady growth overall, with Optimism leading the way. This is related to the Beam wallet launched on OP at the end of July, which allows users to pay fees with the coins used in transfers, rather than the blockchain’s native tokens.

• In the chart below, the total gas amount of the Paymaster contract has increased significantly, indicating that the demand for these intermediary services is growing to simplify the user experience.

Use Cases for Wallet Management

• By integrating AA into existing wallet solutions, these accounts are enhanced into smart contract wallets with programmable logic, providing new features such as batch transactions and social recovery.

• Wallet management solutions that support AA are as follows:

• Safe：

  
  

• The introduction of a multi-signature solution requires multiple authorized entities to sign the same account instead of a separate private key.

• The recent integration of the ERC-4337 standard via a pluggable interface provides developers with modules to build and create wallets.

• A signature abstraction is introduced, allowing users to customize the rules for authorizing wallets to initiate transactions according to their preferences. For example, to guard against suspicious activity, users can specify spending limits to reject transactions of a certain size.

• Argent:

• The concept of social recovery is introduced, allowing users to recover lost or forgotten private keys.

• Users can nominate “guardians,” other wallets or accounts they trust, as backup for restoring their wallets.

• Alternatively, users can perform off-chain recovery using an email address and mobile phone number, introducing the familiar two-factor authentication mechanism.

• Braavos:

• The smart wallet launched on Starknet takes the form of signature abstraction.

• Users can access the wallet using their phones biometric features, such as facial or fingerprint recognition.

• Use Cases for Delegated Transactions

• Delegable Accounts leverage AA to allow users to delegate signing authority to an approved external contract. The account contains relevant rules customized by the user based on their preferences, and then interacts with the applications mentioned in the rules without having to manually approve each transaction.

• VISA’s automatic payment solution:

• Users can approve automated payments for utility and subscription bills while taking full control of the wallet.

• This delegation effectively abstracts signature verification and changes user interaction within the app for a more user-friendly experience.

• Social use cases for Lens:

  
  

• Allow users to delegate signing permissions to dispatcher wallets to perform posting, commenting and changing profiles;

• Users can continuously interact with dApps without requiring approval each time;

• The dispatcher also pays the gas fee for these transactions, eliminating the need for users to hold native tokens for in-app interactions

• This move led to a period of increased usage

• Token Binding Account Use Case

• ERC-6551 introduces the Ethereum standard for Token-Binded Accounts (TBA), giving NFTs the ability to function as a smart contract account and become its own wallet through permissionless registration. This implements an integrated mechanism that allows owners to host NFTs in TBA.

• In the past month, TBA accounts have surged:

• Through abstraction, existing NFTs are greatly empowered to achieve the following capabilities:

• Enable multi-layered ownership of assets

• Making NFTs interoperable across ecosystems

• Lower fuel costs to make transactions more affordable

• NFT gets its own digital identity

• Use case: Sapienz street culture

• The Sapienz project brings the ERC-6551 standard to digital street culture.

• Users receive a customizable character that is unlocked based on the NFTs they own.

• Characters are customizable avatars that users get. This avatar is an avatar representing the user, and the user can unlock different appearances of this avatar according to the NFT they own. They can equip characters with different decorations and personalize them to their liking.

AA Key developments worth noting

• Smart contract wallets, which currently rely on relayers run by intermediaries to convert user-signed messages into typical Ethereum transactions

• Therefore, the new L2 chain provides a viable alternative to AA for developers to experiment with, such as:

• zkSync is the first EVM-compatible chain to implement native AA at the protocol level.

• Similarly, zk-rollup solution StarkNet also implements AA.

• Optimistic rollups such as Optimism and Coinbases Base also implement the AA form.

• AA-related proposals and agreements:

• From the introduction of AA to the current adoption, a list of key events in half a year: