Unlocking Ethereum's Full Utility with Smart Accounts and Account Abstraction
How smart accounts and account abstraction can unlock Ethereum’s full utility

The Ethereum community is on the brink of implementing advanced security measures and transaction capabilities through the emergence of smart contract wallets and account abstraction, but the adoption of this technology remains gradual.

Cointelegraph had the opportunity to speak with Lukas Schor, co-founder of Safe, during the ETHGlobal event in London, to delve into the potential of smart contract accounts and account abstraction in unlocking the full potential of Ethereum.

“In a recent blog post, Vitalik Buterin outlined the three transitions that we need to go through, and one of them is the move to smart accounts. This is where we see our role,” Schor explained.

Originally developed as an in-house multisignature wallet by Ethereum sidechain Gnosis, Safe was created to manage a significant amount of Ether (ETH) raised during its initial coin offering.

“At the time, there weren’t any reliable multisig wallets available, so Gnosis founder Stefan George decided to build his own and make it open-source. Soon, the Ethereum community started adopting it and it became the go-to option for multisignature wallets,” Schor stated.

From this, Gnosis Safe was born, but it eventually evolved into a standalone offering, Safe, which now serves as the smart account infrastructure for Ethereum users, layer-2s such as Optimism and Polygon, and exchanges like Bitfinex. With over $100 billion in value secured across more than 7.5 million smart account addresses, Safe is a fundamental player in the world of crypto.

Smart accounts tackle security and UX challenges in the Ethereum ecosystem

Smart accounts offer a solution to long-standing security and user experience (UX) issues within the Ethereum ecosystem. These programmable accounts provide a wide range of capabilities that traditional ETH wallets cannot match.

According to Schor, smart accounts have the potential to significantly enhance adoption by addressing key concerns such as cross-chain interoperability and key management. Their ability to automate tasks and batch transactions can also improve the overall DApp experience.

One of the most notable features of smart accounts is their enhanced security measures. In addition to multisig functionality, users can rotate their signing key without having to transfer assets to a new account. This reduces the risk of potential attacks and increases user confidence.

Smart accounts also bring traditional Web2 concepts, like subscriptions, into the Web3 world. They offer additional security features such as allow and deny lists, as well as the ability to block malicious contracts. This can make the transition to Web3 smoother for non-natives, who can initially use their Web2 social accounts or email addresses and later switch to a more secure setup.

Moreover, smart accounts have the potential to greatly improve the user experience by allowing DApps, exchanges, layer-2 protocols, and other chains to sponsor gas fees. This could make Web3 interactions more seamless and convenient for users.

Overall, smart accounts offer a wide range of benefits and have the potential to revolutionize the way we interact with the blockchain. With their advanced capabilities and enhanced security measures, they are a crucial component of the Web3 ecosystem.

Gradual Adoption of Smart Accounts in the Crypto World

The adoption of smart accounts in the crypto world is a process that follows a “first slowly, then all at once” pattern, according to Safe co-founder. This innovative concept has been in development for six years, indicating a gradual increase in its usage.

One of the main obstacles to adoption is the prevalence of externally owned accounts (EOA) through wallets like MetaMask. However, layer-2 protocols have the opportunity to start from scratch, and the proposed migration EIP-7377 could accelerate adoption by eliminating the need for legacy user optimization.

Safe’s focus has been on specific user groups that would greatly benefit from the added security and flexibility of smart accounts, such as Ethereum ecosystem teams and DAOs. As time goes on, adoption is gradually shifting towards less technical and lower-value use cases. This is evident in the deployment of six million smart accounts by Worldcoin, and it is predicted that 2024 could be a breakthrough year for smart account adoption.

New catalysts, such as Coinbase’s integration of smart accounts, the development of cross-chain smart accounts, and EIP-7377, are expected to drive the migration towards smart accounts in the near future.

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