Please fasten your belts!
Over 1 million smart accounts have been deployed
Alchemy reports over 1 million smart accounts were deployed, with 960,000 created in Q4 2023.
The surge, attributed to ERC-4337’s launch at Walletcoin in March 2023, signifies a rapid adoption, surpassing initial expectations.
The data shows a 194% increase in user operations in Q4, with significant contributions from platforms like Grindery, FanTV, and Cyberconnect.
While user retention is low, the technology’s potential for diverse app experimentation is high.
In this light, account abstraction is seen as a critical phase in infrastructure development, promising accelerated app development. The introduction of paymasters, allowing users to pay gas fees with ERC-20 tokens or have them subsidized, has seen widespread adoption, with over 97% of user operations in Q4 utilizing a paymaster, showcasing the demand for transaction fee flexibility.
EIPs to watch in 2024
As Ethereum approaches the Dencun hard fork in Q1 2024, several eagerly anticipated Ethereum Improvement Proposals are in focus:
- EIP-4844, also known as Proto-Danksharding, is a significant EIP aimed at reducing the cost of data availability across all layer-2s. It’s considered a transformational enhancement that could lower rollups gas fees by up to 100x.
- Account abstraction is also a key area of development with ERC-4337 and its extension, ERC-6900, introducing smart contract wallets with gasless transactions and secure social logins. ERC-7579 further enhances this framework, likely improving wallet security as well as efficiency and making blockchain interactions more user-friendly and versatile.
- EIP-1153, involving transient storage opcodes, aims to introduce a mechanism for handling temporary storage during smart contract execution, significantly reducing gas costs and contributing to scalability.
- EIP-4788 proposes to include the Beacon Block Root in each EVM block. It enhances the alignment between the execution and consensus layers of Ethereum.
- EIP-5656 is set to introduce the MCOPY opcode, optimizing memory copying operations in smart contract execution.
- Finally, EIP-6780 aims to restrict the SELFDESTRUCT opcode, addressing issues related to state management and security vulnerabilities.
Highlights from ERC-4337 Account Abstraction Core Devs meeting #25
This time, the team discussed critical updates and considerations for bundler’s p2p protocol.
They addressed the need to include chain IDs in ENR, amending the P2P spec accordingly. The idea of a mempool subnet was considered for removal from the spec, with discussions on merging other PRs, pagination-based approaches, and error handling to mitigate confusion.
Focus was directed towards specific PRs, notably PR 20 concerning a strict no-sign signature policy and PR 18 dealing with gossip propagation issues.
Defining what is canonical was a central point of discussion. The definition and prioritization of canonical mempools were debated. The team also considered spec test adjustments.
For more insights, please click the preview below 👇
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Ethereum contract accounts on rollups get more efficient with bundle compression
Ethereum’s future lies in contract accounts on rollups, promising fast, cheap transactions and secure accounts using best-practice cryptography.
This upgrade enables easy-to-use passkey backups, eliminating seed phrases. The primary cost on Layer 2 is calldata, with ERC-4337 previously being expensive. However, bundle compression is solving this issue.
The BundleBulker contract, simple and permissionless, allows bundlers like Pimlico, ThirdWeb, and Alchemy to use their IInflators for compression. The DaimoOpInflator exemplifies this by packing, templating, and stateful compression — reducing byte size significantly. This permissionless setup means any app can write its own inflator for use.
Early results show that bundle compression dramatically reduces bytes per transfer, making contract wallets more efficient than legacy wallets.
While rollup compression is useful, bundle compression at the app layer allows for application-specific templating and stateful lookups.
Using ERC-4337 with another contract in front offers standard ops, censorship resistance, and security through the battle-tested EntryPoint contract.
Concerns about vulnerabilities in the inflator are mitigated as wallets sign over the uncompressed op, and any issues only cause liveness problems, not security errors. This separation ensures that security-critical validation remains intact.
State diffs and theoretical optimizations for zkrollups aren’t likely to be in production soon due to risks of undiagnosable hacks. Thus, production rollups will continue posting calldata for the foreseeable future.
Vitalik Buterin aims to rediscover Ethereum’s cypherpunk roots
Vitalik Buterin is calling for a revival of Ethereum’s initial “cypherpunk” vision with the core values of decentralization, open participation, censorship resistance, and credible neutrality.
In a blog post, Buterin reflects on how Ethereum’s original concept as a public decentralized, shared hard drive faded around 2017 with a shift towards financialization.
He stresses the need for Ethereum to re-embrace its cypherpunk roots, advocating for non-financial applications and highlighting the emergence of technologies like rollups, zero-knowledge proofs, and account abstraction as means to support these values.
Buterin points out that while the crypto ecosystem can be built in ways that do not adhere to cypherpunk values, such as creating highly centralized layers or storing NFTs on centralized platforms, resisting these trends is crucial to preserving the unique value of the crypto space and avoiding the replication of the existing web2 ecosystem with added inefficiencies.
Zyfi released paymaster for zkSync
A recent announcement from Zyfi highlights a significant release — a paymaster leveraging zkSync’s native account abstraction.
Users can now send tokens to a wallet without needing ETH and broadcast custom transactions while paying gas with any token.
This development addresses a common issue in the cryptocurrency community where users couldn’t complete transactions due to insufficient gas.
Now, with Zyfi, users have the flexibility to use any ERC-20 token to pay for gas. This enables a range of activities such as liquidity pooling, borrowing or lending, purchasing NFTs and swapping tokens.
🐞This newsletter is sponsored by TransactionKit
Looking for an Account Abstraction infrastructure to streamline the user experience of your dApps? Elevate your project’s potential with Etherspot — leverage AA Prime SDK, ERC4337 Skandha Bundler, and Paymaster Service.
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