Have we reached the pinnacle of wallet design?

That's a question I've been asking myself a lot recently.

And if not what remains?

What new systems need to be designed and developed?

Where Are We Today?

I have mixed feeling about "Account Abstraction" i.e ERC-4337.

Ultimately I do believe it was a net positive for the ecosystem. Most notably it brought into focus the importance of smart accounts for the advancement of the Ethereum ecosystem.

But I believe there is still much left to explore and uncover in regards to the potential of smart accounts and what can considered as a Smart Wallet.

The major frontiers I see before us (Ethereum community) are as follows:

1. Delegated Authority

2. Smart Transactions

3. Transaction Firewalls

4. Account Recovery

5. Self-Sovereign Identity

Before diving into these frontiers I want to take a moment to contextualize where I think we stand today. As stated above, I have mixed feelings towards Account Abstraction, primarily because I don't think it was a "10x improvement" to the user experience it was herald as being.

ERC-4337 was an incremental, albeit important, steps towards enshrining smart accounts.

But it didn't drastically change or improve the smart contract wallet experience. Many features within ERC-4337 existed before in projects like Safe and Argent.

The most notable UX improvement arising from Account Abstraction was a Paymaster marketplace. And a clear commitment by the Ethereum community to prevent vendor lock-in for critical Web3 infrastructure i.e. wallets.

But Paymasters don't fundamentally change the smart account experience for non-trivial use cases. Sure it might improve the "embedded wallet" experience, where the concept of a wallet needs to be abstracted away from the incoming user, but when it comes to more serious use cases, especially in regards to Open Finance (a.k.a DeFi) it doesn't move the needle in any serious capacity.

And to illustrate this point, at the time of writing the “value” provided by these paymasters is still very limited.

While UserOperations might be significant (especially on Polygon which I am also inherently suspicious of) the gas paid by Paymasters is still very small when viewed across chains. In other words, there is relatively low-demand for using non-native assets (ETH and MATIC) to pay for gas costs of a transaction.

So if Account Abstraction isn't the 10x improvement we need... what is?

The Path Towards the Perfect Smart Wallet

Smart Accounts and in-turn Smart Wallets are the future.

The benefits are clear.

But why?

Programmability. And an optimized user experience.

Smart Accounts are the obvious path forward, because it becomes possible to build new "abstractions" on top of the core wallet experience. We (the developers) can encapsulate complex patterns that an average user is simply unable to craft and ultimately help unlock the full potential of decentralized systems without compromising on the core tenets of self-custody and self-sovereignty.

But what are the patterns worth capturing?

Delegated Authority:
Ability to authorize leaf accounts to act on behalf of a root account.

Smart Transactions:
Ability to craft rules, conditions and outcome based transactions.

Transaction Firewalls:
Ability to outsource transaction verification/execution to a third-party without losing custody or ownership of a smart account.

Account Recovery:
Ability to recover from a compromised account and/or lost private key.

Self-Sovereign Identity:
Ability to control and manage a digital identity without a centralized authority.

Why these frontiers?

These frontiers represent a “10x improvement” to the core wallet experience.

What’s Next in the Smart Wallet Space?

The might be a bold prediction and maybe even controversial but…

I am of the opinion that today’s standard wallet experience is fundamentally broken.

In so far that it’s the non-optimal route for onboarding millions of users onchain.

For a number of different reasons (security, user experience, discoverability, etc..) interacting primarily with blockchains using a browser based interface is a technological dead-end. Or at the very least a market segment that will be dominated by MetaMask and it’s UNIX like approach to modularity and upgradability via Snaps.

But simply put.

Smartphone wallet browsers and browser extension wallets are not the way forward for *truly* onboarding a billion users into the World of Web3.

I get it - right now you’re probably asking yourself “What’s my evidence that supports this assertion?” and to be completely fair that’s exactly what you should be asking.

And I’ll be honest with you.

I don’t have a mountain of evidence. Or anything I can point to specifically that leads me to this belief. But what I do have is the unshakable belief that we not have crossed the finish line yet.

There is more to uncover. More patterns to discover. More optimizations to make.

More experiences to make better.

And perhaps one of the best way to do this is to re-imagine “What is a Smart Wallet?”

The “iPhone Moment” for Web3

You’re probably familiar (or at-least aware) of the following quote from Steve Jobs.

“Some people say, "Give the customers what they want." But that's not my approach. Our job is to figure out what they're going to want before they do. I think Henry Ford once said, "If I'd asked customers what they wanted, they would have told me, 'A faster horse!'" People don't know what they want until you show it to them. That's why I never rely on market research. Our task is to read things that are not yet on the page.”

It’s a great quote. It opens up your mind. Forces you think outside of the box.

Leading you down a path to ask questions that no one else is asking.

That mentality is missing from the Web3 ecosystem.

We want to give users an overwhelming amount of choices. We want them to navigate a confusing trail of terminology. We want them to play in a dark forest with dangerous predators.

Sure, it was the right place to start. But it’s the wrong place to end up in.

Conclusion

Today’s wallet and blockchain experience is broken if what we want is mass adoption.

ERC-4337 is not the “revolutionary” upgrade it was herald as being.

What we need is Smart Wallets with a verticalized user experience.

And that user experience will be underpinned by the following features:

1. Delegated Authority

2. Smart Transactions

3. Transaction Firewalls

4. Account Recovery

5. Self-Sovereign Identity

A collection of features that improve the core user experience, increase operational security, and introduces features (elegantly) that users didn’t even know they wanted or needed.