Everything About Account Abstraction: AA on Base, Fantom, Bitcoin. VCs’ new funding opportunities & EIP-4337 explained

Everything About Account Abstraction: AA on Base, Fantom, Bitcoin. VCs’ new funding opportunities & EIP-4337 explained

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March 1, 2023

Welcome to our weekly rundown on account abstraction, where we explore the latest developments in this innovative technology that is revolutionizing the way we interact with the blockchain.

Base: Coinbase + AA

Coinbase has finally launched its layer-2 Ethereum network, Base.

The network will be incubated inside Coinbase, but there are plans to fully decentralize it later. It will be powered by Optimism’s stack, joining it as the second main stack member.

According to Jesse Pollak, head of protocol at Coinbase, Base’s code will be completely open source:

“We’re also excited about what’s called account abstraction, which is an ongoing effort to make it easier for users to have more powerful wallets. This will allow users to pay for gas in whatever currency they want, even if the base cost is in Ethereum.

He also assures that AA is “something really powerful that will start to appear next year.

In addition to that, Blockchain development teams Gelato and Safe are working together to bring their Account Abstraction infrastructure to Base. This will enable developers to use smart contract wallets as “first-class citizens” rather than Externally Owned Accounts (EOAs) from the outset.

Base’s transaction fees are significantly lower than those of Ethereum, making deploying smart contract wallets and sponsoring transactions practical at a larger scale.

Fantom’s AA

Juan Angel, head of marketing at Fantom Foundation, and Michael Kong, CEO/CIO, have spoken on the upcoming Fantom features:

  1. account abstraction;
  2. fast confirmation times and consistent uptime;
  3. economic abstraction and gas subsidies;
  4. Fantom ecosystem funding.

The speakers said AA allows users to log in to their crypto wallet using web2 login methods such as username/password, face ID, and social media authentication.

“Navigating the DeFi landscape will become much(!) easier for new users. And Fantom will be ready for them!

Fantom developers expect the FTM account abstraction to break down the DeFi entry barrier so that DEX protocols can gain a significant share of the CEX market in the future. (After the crash of FTX, DEX statistics have since fluctuated but have not closely matched CEX inflow/outflow volumes.)

Crypto Daily published the list of AA benefits

As the crypto news website writes, “account abstraction is the missing key to mass adoption and ease of interaction with the blockchain.

So what are the main advantages in their opinion?

  • Chance to create an account without requiring a seed phrase.
  • Users can recover accounts simply by using their email addresses.
  • The ability to pay transaction fees with ERC-20 tokens means users will no longer need ETH or any network’s native token.
  • You can batch transactions, which allows you to perform multiple transactions simultaneously and save on gas bills.
  • Smart contract wallets include session keys, which means users no longer need to log in multiple times.
  • Far more control over a wallet’s security.

Also, the article’s author said they are looking forward to the introduction of EIP-4337 since it eliminates the need for an additional relayer service, making smart contract account transactions native to the blockchain.

What do venture capitalists fund after FTX’s collapse?

Web3 generalist fund Shima Capital, an active firm backed by hedge fund billionaire Bill Ackman, is particularly interested in consumer and infrastructure projects, according to general partner Yida Gao:

“We support new network protocols such as account abstraction, a proposed way to rewrite how smart contracts work to provide new capabilities such as asset recovery, stable user identities, and fraud protection systems.

Gao expressed optimism about the potential for assisting entrepreneurs working within the vast market, both in terms of consumer-facing products and the underlying infrastructure of the Web3 ecosystem.

ConsenSys is on the lookout for AA specialists

ConsenSys, a company behind the market-leading wallet MetaMask, has acquired HAL to augment its development teams. And most likely, their expansion will only continue.

In the last two years, ConsenSys has witnessed the modularity and maturation of the Ethereum ecosystem. Hence, the company continues to look for good acquisition opportunities.

It actively monitors many of the most interesting projects in niches, such as wallet security, account abstraction, various aspects of MEV, layer-2 scalability, privacy, Web3 components, and more.

Ethereum Foundation’s grants for AA teams

The Ethereum Foundation has announced the launch of a new grant round to promote development, research, and education around AA.

The grant application window opens on February 27th, 2023, and closes on March 31st, 2023. Ideas and projects at any stage of development are welcome, including those in the idea phase, proof-of-concept, work in progress, and fleshed-out project.

Proposals must be in English, and open-source, with a free and permissive license. The budget for proposals will be capped at $50,000.

The selection criteria will be based on potential impact, relevant experience, documentation clarity, contribution to the wishlist areas, and the potential of long-term contribution.

EIP-4337: explanation we all have been looking for

John Rising, the co-founder of Stackup, has shared his own understanding of how EIP-4337 works. Like most of us, Rising spent days, if not weeks trying to get what makes this Ethereum Improvement Proposal so essential.

Finally, the Stackup team managed to come up with an ultimate picture that can help newcomers get into this topic much faster:

Bitcoin’s account abstraction

AA has long been an Ethereum dream and has recently become a hot topic across all blockchain communities.

However, Bitcoin has come with account abstraction since its genesis. Thus, all the essential features promised by AA can be deployed on Bitcoin without any protocol changes and with little additional complexity.

So, Bitcoin devs claim their network has had AA from the start as it bundles all account/UTXO handling. To confirm this, they list some of the most famous AA features that have been implemented on the Bitcoin blockchain:

  • Sponsored transactions;
  • Different signature schemes;
  • Vault;
  • Recurring payments;
  • Multisig;

Other AA features can be added in a similar way.

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