ERC-4337: Understanding Account Abstraction

Shaan Ray
Published in
4 min readAug 28


Account abstraction is a blockchain technology that enables users to replace their traditional blockchain accounts with smart contracts. As an ERC Standard, it applies to Ethereum and to all EVM-based blockchains, including Artirbum, Avalanche, and Polygon.

Two types of accounts exist on EVM-based blockchain platforms: Externally Owned Accounts (EOAs) and Smart Contract Accounts (‘Smart Accounts’).

Externally Owned Accounts (EOAs)

Users on most current blockchains and EVM-based systems have EOAs. They access and transact from their accounts using an external private key paired with their public key. There are multiple ways to store these private keys: hardware, software, and paper wallets. Using the wallets to store the keys safely can often confuse some new users.

When these accounts are set up, a private key is generated for the user to keep secret, and so are ‘seed phrases’ to help users recover their accounts if they misplace their private key. Users should store these seed phrases securely.

An EOA must initiate all blockchain activity. All activities on a blockchain platform, such as conducting transactions or calling smart contracts to perform their logic, must be initiated from an EOA. And every transaction costs money in the form of Gas fees.

Limitations of Traditional Accounts (EOAs)

Every action on the blockchain requires gas fees. EOAs cannot do anything until a quantity of ETH is transferred into them to make transactions. Funding new accounts to start transacting is one of the biggest hurdles that first-time users must overcome. Some experts believe this is the primary impediment stopping the large-scale adoption of Web3-based solutions.

Additionally, if you lose or forget your private key and seed phrases, there is no way of recovering the account — in which case, all the money in it is permanently inaccessible. There are several painful examples of this.

How many accounts would you have lost by now if you couldn’t click forgot password and follow a backup mechanism?

Smart Contract Accounts

Smart contract accounts are the second type of account on Ethereum. Smart contracts are one of the most powerful features of blockchain technology. A smart contract is a digital contract in which the terms of agreement between users or program logic is set in code. A smart contract can also be programmed to self-execute when a set of predefined conditions are fulfilled.

Smart contracts can be programmed to trigger other smart contracts or create new events when executed. Smart contracts can also hold assets, NFTs, and cryptocurrencies within them. These assets can be distributed upon execution when a set of conditions are met based on the code defined in the contract.

With smart contracts, developers can implement ‘access’ rules of their choice. Meaning that they can use a range of custom mechanisms through which a user can access their account.

Account Abstraction

Account abstraction allows users to use smart contracts as their primary accounts. It essentially turns EOAs into smart contract-enabled accounts.

Smart contracts can hold complex logic pertaining to various aspects of the user experience, such as the user accessing the account, conducting transactions on the platform and much more. It has the potential to completely change the user experience on the blockchain for the better because it will make accessing and using Web3 apps much more straightforward.

There have been several previous attempts to create account abstraction, but it was finally made possible by ERC 4337.

ERC 4337

ERC 4337 first started as an Ethereum Improvement Proposal (EIP). It was co-authored by Vitalik Buterin, Yoav Weiss, Kristof Gazso, Dror Tirosh, Shahaf Nacson, and Tjaden Hess. Four key benefits of ERC 4337 to the Ethereum network that the co-authors observed are:

  • It preserves the ethos of the ecosystem — decentralization
  • It requires no hard fork and can be adopted without any consensus protocol changes
  • It supports signature schemes that are user-friendly, more efficient, and quantum-safe
  • It removes user experience friction by creating gas abstraction, i.e., allowing users to pay network fees by ERC-20 tokens or request third parties to cover their fees altogether.

More details about the team, participating members, and the protocol can be found here. Readers interested in more technically advanced details about this protocol and the abstraction process can learn more here.

ERC 4337’s primary benefit is that it simplifies the creation and use of wallets.

Benefits of Account Abstraction

Account abstraction does away with the need to remember seed phrases and private keys. Developers can define their own safety rules with smart contract wallets. For example, account recovery can be done through external biometric verification solutions or social mechanisms with a trusted group of friends.

These new accounts can allow for gas fees to be paid with any token or even to pay for someone else’s gas fees. Projects eager to onboard new users can subsidize or even completely offset the initial gas fees required by new users.

A range of logic varying in complexity can be implemented through smart contracts. This can enable things like batch payments — where several complex or lengthy actions can be batched together, signed, and paid for all at once. It can also enable automatic payments, which weren’t previously possible on blockchain platforms due to the requirement of user signatures for each action.

Overall, the primary benefit of account abstraction is that it simplifies things and enables the development of very user-friendly apps, especially for beginners. It also helps prevent the loss of crypto wallet access and the loss of crypto itself.


By moving users from Externally Owned Accounts to Smart Contract Accounts, account abstraction may enable much friendlier user experiences, avoid all the pitfalls and unrecoverable accounts of the past and pave the way to large scale adoption of Web3 applications.

Shaan Ray

Helping you identify and invest in Emerging Technologies early on so you can innovate and grow exponentially. Follow Lansaar Research for the latest in emerging technologies and new business models.



Shaan Ray

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