ERC-4337: How account abstraction transforms the user experience on Ethereum

The real stakes for users

Have you ever lost access to your crypto wallet because you misplaced your secret phrase? Or had to manage two separate accounts for a single transaction? These frustrations highlight the limitations of the current Ethereum system. It is precisely to address these issues that ERC-4337 was created and launched in March 2023 on the Ethereum mainnet.

Understanding the Issue: EOA versus Smart Contracts

Today, Ethereum relies on two distinct types of accounts. Externally owned accounts (EOA) are controlled solely by private keys - simple but rigid. Smart contract accounts, on the other hand, offer programmable logic but require users to manage two simultaneously: one for funds, the other to pay for gas.

The result? A complicated user experience and increased security risks related to key management.

ERC-4337: Merging Benefits into a Single Account

Initially proposed as EIP-4337 in 2021 by Vitalik Buterin and the Ethereum developers, this standard introduces a radical change: a single smart contract account can now manage transactions, token interactions, and contract deployments. It operates above the Ethereum consensus layer, without modifications to the protocol itself.

The system operates through an ingenious mechanism:

• UserOperations: a new type of transaction, submitted to a separate mempool
• Bundlers: special actors who collect and aggregate UserOperations into standard Ethereum transactions
• EntryPoint: a smart contract acting as a secure execution gateway

This architecture allows for flexible transaction validation and completely abstracts the gas payment for the end user.

Unlocking Innovative Use Cases

ERC-4337 opens the door to previously impossible features:

• Social Recovery: recover an account via trusted contacts rather than a secret phrase
• Multi-factor authentication: add layers of security without complicating usage
• Batch Transactions: execute multiple operations in a single transaction
• Gas payment in ERC-20 tokens: no need to have ETH on hand to pay fees

Tangible Benefits for the Average User

For everyday use, ERC-4337 really changes things:

Ease of Access: faster and more accessible wallet creation, without struggling with secret phrases.

Enhanced Security: drastic reduction of risks from human error (accidental exposure of keys, lost secret phrases). Two-factor authentication and social recovery mechanisms significantly reduce access loss.

Financial flexibility: payment of gas fees via third-party payers or by using any ERC-20 token, not just ETH.

Custom Wallets: automated payments, pre-approved transactions, whitelists - everything becomes programmable.

Why ERC-4337 Avoids Protocol Changes

Previous approaches like EIP-2938 attempted to modify the consensus layer itself. ERC-4337 takes a different path: operating entirely above the base protocol, as smart contract standards and infrastructure. This allows for faster adoption, without the complexities of a consensus upgrade.

At the same time, bundlers ensure the decentralization of processing - multiple actors can freely participate instead of a single centralized relay.

Economic and Technical Impact

By bundling UserOperations into single transactions, bundlers reduce gas fees and improve overall throughput. This optimization directly benefits users through lower costs and smoother experiences.

Where do we stand today?

Since its official launch in March 2023, the adoption of ERC-4337 continues to grow. Some technical and ecosystem challenges persist, but the trajectory is clear: crypto wallets are gradually becoming more accessible, secure, and feature-rich.

ERC-4337 represents a significant step towards wider adoption of crypto. By removing major frictions that hinder new users, this standard lays the foundation for a truly usable crypto experience in everyday life.