Cadence’s Account Abstraction Plan

3 min readJan 11, 2024

Overview

Traditional EOAs serve as a barrier to entry for new crypto users. Setting them up and securing private keys is confusing, not to mention the security challenges associated with securing these private keys and signing transactions offline. There is also no flexibility with EOAs; they are not programmable and therefore cannot implement custom logic.

ERC-4337 fixes the shortcomings of EOAs with the creation of smart accounts, customizable smart contracts that replace the EOA on behalf of the user.

So how does a traditional AA flow work?

Instead of an EOA sending a transaction directly to a node’s mempool, user operations are submitted on behalf of the user. User operations, or userOps, represent transaction metadata; once signed by the user, they are sent to a bundler who bundles up multiple userOps into a single transaction and submits this transaction to a node (gas is only paid for one tx).

These userOps are sent to a singleton Account Abstraction (AA) entry point contract which loops through them all and executes them one by one. The userOp itself defines what specific function, and corresponding logic, will be executed on the user’s smart account wallet. There is also an optional paymaster step, where a third party entity can pay gas fees on behalf of the user, in a token of the user’s choice.

How is Cadence using Account Abstraction?

Cadence will be at the forefront of account abstraction as it is a core component of our architecture.

Cadence’s goal with Symphony is to abstract ALL base layer infrastructure from the user. This includes wallets, signing transactions, bridging and even chains

First of all, users will no longer have to worry about creating EOAs and securely storing private keys. Cadence will handle smart account deployment (using CREATE2 to guarantee the same address on every chain), and users will no longer be required to store their own private keys. They will be able to choose between a variety of traditional sign-in mechanisms. Additionally, users will be able to configure social recovery mechanisms should their private key be lost or compromised.

Beyond social recovery, Account Abstraction will enable a third-party solver to execute and fund trades on behalf of the user’s smart account wallet.

This is a major development as it enables chain abstraction while unifying liquidity across different protocols.

From the user’s perspective, they simply open a position, while behind the scenes its executed across networks and protocols

Due to AA, the user is always in control of the trade and fully non-custodial.

Additionally, the AA’s paymaster mechanism allows the user to decide what currency they would like to use for paying gas fees (we can even make fiat an option). Discounts would be provided for CAD tokens for gas fees. Moreover, gas fees will be lower because userOps are bundled into a single transaction.

Currently 98% of perpetuals are done on centralized exchanges. This opens up a massive opportunity for disruption. The gap is largely due to liquidity and UX (2 issues that are at the core of Cadence’s solution). However, what is often forgotten is CEX features

Looking forward, Cadence will also utilize session keys to provide or enable services such as liquidation protection, dollar cost averaging, automated trading strategies, risk management tools, etc. Session keys allow third parties to sign and execute userOps on behalf of the user’s smart account wallet within a specified time interval or within specified constraints, all configurable by the user.

Account Abstraction has been a substantial innovation of the last year. Cadence, taking this innovation a step further, employs Account Abstraction in a pioneering way by optimistically facilitating trades on behalf of users while also bringing trading mechanisms to users. This approach sets a new benchmark in user-centric decentralized transactions.