Vitalik Buterin Unveils Strategy to Simplify Crypto Wallets

Updated: 19 July 2023

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At the Ethereum Community Conference (ETHCC) held in Paris, Vitalik Buterin, Ethereum’s co-founder, discussed the elegance of modern account abstraction. Unlike prior upgrades, this doesn’t mandate any alterations to the foundational protocol. Since 2015, even preceding the official launch of Ethereum, developers have been fine-tuning account abstraction. Their goal is transitioning from Externally Owned Wallets (EOAs) to wallets grounded in smart contracts. Achieving this would equate managing a cryptocurrency wallet to handling an email account.

This transition implies users could feasibly retrieve their seed phrase, which is the private key for transaction signatures, with the same ease as resetting an email password. Ethereum’s latest upgrade is denoted as EIP-4337, alternatively titled Account Abstraction Using Alt Mempool. This enhancement lets individuals devise non-custodial wallets through programmable smart contracts. Such advancements pave the way for convenient wallet recovery, reduced transaction fees through signless transactions, and the introduction of team wallets, or multisignature wallets.

We aim for blockchains to provide you with funds even before you complete registration

Buterin postulated that this upgrade might spearhead global Web3 adoption. “We aim for blockchains to provide you with funds even before you complete registration,” Buterin articulated. The vision he emphasizes is for users to seamlessly accept any non-Ethereum token, such as a stablecoin, using their smart contract wallet, all while addressing gas fees without the necessity of ETH conversion or possession.

To propagate these wallet kinds and their associated transactions, the newest account abstraction version would sanction the deployment of “paymasters”. These allow users to settle gas fees with whatever token is under transaction. Furthermore, EIP-4337 also introduces signature aggregators. These facilitators allow numerous signers to coalesce, but only a singular signature is utilized per transaction.

Emphasizing its significance, Buterin conveyed that signature aggregation, especially within rollups, could be monumental due to the pronounced signature impact on these layer 2 resolutions. Solutions for Ethereum layer 2 scaling like Optimism or Arbitrum consolidate transactions and authenticate them externally to the Ethereum mainnet. In essence, account abstraction with signature aggregation fosters more substantial data compression, culminating in economical computation. Buterin estimates this could slash costs by a factor of 86.

EIP-4884: Proto-Danksharding

However, Ethereum’s innovation doesn’t end here. Another upgrade dubbed Proto-danksharding, recognized as EIP-4884, is in active development. This has rapidly emerged as a core development area, laying the groundwork for a novel data kind set to significantly trim expenses and amplify data efficiency. EIP-4844’s fundamental role can be encapsulated in this mnemonic phrase: “EIP-4844 bolts blobs onto blocks”. This transitionary upgrade is the precursor to full-fledged danksharding anticipated in the future, positioning Ethereum as a dominant player in the global transactional network realm.