Everything About Account Abstraction: Vitalik Buterin's EIP-7702…

Everything About Account Abstraction: Vitalik Buterin's EIP-7702 for EOAs, Wallet UX Enhancements, Yoav Weiss on Centralization Risks, and ERC-4337 Core Devs Calls #30 & #31

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May 15th, 2024

We are welcoming you to our weekly digest! Here, we discuss the latest trends and advancements in account abstraction, as well as bring some insights from Etherspot’s kitchen.

The latest news we’ll cover:

Vitalik Buterin Proposes EIP-7702 to Enhance EOAs
Further Discussion with Vitalik about the Future of EOA/AA
How Ethereum EIP-7702 Boosts Wallets UX
Yoav Weiss Discusses Centralization Risks with EIP-3074
ERC-4337 Account Abstraction Core Devs Call — Meeting #30 and Meeting #31

Please fasten your belts!

Vitalik Buterin Proposes EIP-7702 to Enhance EOAs

Vitalik Buterin, along with other Ethereum developers, have drafted EIP-7702 as a new transaction type to improve Externally Owned Accounts (EOAs). This proposal offers an alternative to EIP-3074, with functionalities that allow transaction batching, fee sponsorship, and temporary smart contract wallet capabilities for EOAs during transactions.

According to the draft, EIP-7702 introduces a contract_code field and a signature feature that temporarily converts EOAs into smart contract wallets to perform complex transactions.

This would enhance usability and security by enabling transaction batching, sponsored transactions, and privilege de-escalation. For instance, it could allow subkeys to spend only ERC-20 tokens or access certain parts of a wallet balance.

The goal of EIP-7702 is to address forward-compatibility concerns and avoid the creation of separate invoker contract ecosystems, aiming for a unified smart contract wallet approach.

This standard seeks to prepare for an “endgame” scenario where all EOAs transition to smart contract wallets, potentially driven by advances in quantum computing.

Vitalik notes that despite its potential, EIP-7702 faces challenges similar to those of EIP-3074, including trust in code and the risk of centralization. The standard is currently in the draft stage, with ongoing discussions about its implementation and implications alongside other standards like ERC-4337.

Further Discussion with Vitalik about the Future of EOA/AA

The “Future of EOA/AA Breakout Room #2” call on May 7th began with Vitalik Buterin introducing EIP-7702 as a new alternative to EIP-3074.

Much discussion revolved around the advantages of 7702 over 3074. It is seen as more forward-compatible with standards like ERC-4337 and the overall account abstraction roadmap.

Integration with 4337 bundles, batching, and sponsorship seem more straightforward with 7702 than with 3074’s invoker contracts.

There was debate around whether fields like chain ID and nonces should be enforced at the protocol level in the signature or left up to wallet implementations to manage. Some argued for flexibility by not mandating them, while others raised security concerns around long-lived signatures without nonces. Ideas like using a “max nonce” were proposed as potential compromises.

The client teams indicated that 7702 seems implementable for the upcoming Ethereum upgrade, but more time is needed to review it, especially for integration with the ERC-4337 infrastructure like bundlers.

Overall, 7702 received significant interest as a promising alternative path forward, but teams stressed the need for more analysis given its recency.

How Ethereum EIP-7702 Boosts Wallets UX

Another perspective has been shared about EIP-7702 with a focus on how the new proposal will affect Ethereum-based wallet UX.

EIP-7702 aims to advance the user experience of traditional Ethereum wallets by enabling features typically reserved for smart contract wallets. This new transaction type allows users to temporarily transform traditional wallets into smart contract wallets during transactions by utilizing the contract_code field.

This integration strategy promises to incorporate the benefits of smart wallets — like transaction batching and social recovery tools — without the forward compatibility issues associated with previous proposals.

Vitalik further explains that the contract code for EIP-7702 could use the existing ERC-4337 wallet code, ensuring a smooth transition and compatibility with future Ethereum standards.

Safe co-founder Lukas Schor has endorsed this approach, appreciating its potential to simplify complex wallet operations while aligning with Ethereum’s long-term goals.

Yoav Weiss Discusses Centralization Risks with EIP-3074

In a detailed reply to Sam Wilson’s comments in the AA Mafia Telegram group, Yoav Weiss from the Ethereum Foundation expressed concerns about potential centralization risks associated with EIP-3074. He highlighted that the requirement for users to sign transactions multiple times could lead to a poor user experience and greater reliance on centralized relays.

Weiss contrasts this with ERC-4337, where the user signs a UserOp once, and complex operations are handled off-chain, reducing dependency on relays. This approach, according to Weiss, better preserves Ethereum’s decentralization by minimizing central points of control.

He also pointed out that EIP-3074 facilitates functionalities like batching and gas sponsorship but requires using a centralized relay for practical implementation. This could compromise Ethereum’s principle of decentralization.

Weiss fears that reliance on a small number of service providers to manage these relays could lead to a loss of censorship resistance, unlike the current model, in which services like Infura or Alchemy can be bypassed by running a personal node.

Furthermore, Weiss highlighted issues of permissioned innovation and privilege separation under EIP-3074, where the invoker has full access to a user’s account. This increases the risk of centralization and security vulnerabilities.

According to Weiss, EIP-3074’s design could enforce a gatekeeper role for wallets, restricting innovation and user choice in the ecosystem.

Overall, Weiss advocates for a system that maintains Ethereum’s decentralized ethos, supporting alternatives that avoid these centralization and security pitfalls while advancing the network’s technological capabilities.

ERC-4337 Account Abstraction Core Devs Call — Meeting #30 and Meeting #31

This video covers the 30th core developers call discussing the progress and challenges around ERC-4337 for Account Abstraction. The key points discussed include:

There is a need for a specification around the conditional endpoint required by rollup teams like Scroll and Linea. This endpoint allows bundlers to check if their bundle will revert on-chain before submitting, preventing fund loss.

The team also raised concerns about introducing EIP-3074 (the new OPCODE for contract wallets). Many feel it could slow down full account abstraction adoption and have unresolved security implications. The core team plans to voice these concerns in the upcoming RollCall.

The path forward for compatibility between ERC-4337 and the proposed EIP-3074 was discussed. While theoretically possible, the team wants to wait until after EIP-3074’s potential testnet inclusion before dedicating resources.

Overall, the discussion centered around refining ERC-4337 while carefully evaluating the implications of EIP-3074 to maintain strong security guarantees and decentralization for account abstraction.

In the 31st Core Devs Call meeting, the team provided updates on various implementations and testing of account abstraction technology across different platforms.

The shared mempool testing on the Sepolia testnet has not revealed any new issues. A single client bundler implementation is running on Arbitrum Sepolia, with a few initial hiccups now resolved.

The team is working to update the estimation method (estimateUserOperationGas) to match the latest spec, allowing missing gas limits and gas prices as valid inputs.

Efforts are underway to implement EntryPoint v0.7 support, and an overhaul of the EIP-7562 documentation and specs is in progress to streamline testing and ensure alignment with the latest changes.

Overall, the meeting covered the current status, ongoing tasks, and plans for improving testing, documentation, and EntryPoint v0.7 implementation for the AA technology.

You can watch the meeting recording here.