Authored by Kiwi Yao, researcher @OKX Ventures
2023 marked a pivotal year for account abstraction (AA), driven by the introduction of the ERC-4337 Ethereum standard. This innovation unlocked smart wallet contracts and expanded capabilities for network users. But what lies ahead for AA?
Key Market Participants in Account Abstraction
Today, the AA market comprises two primary groups:
Smart Contract Wallets
- Features: Social login/recovery, gas abstraction, transaction batching, third-party service integrations (e.g., fiat ramps, DeFi protocols).
- Examples: Unipass (ERC-4337 compatible), Visa (exploring AA on StarkNet), and emerging early-stage projects.
Infrastructure Providers
- Modular solutions like bundlers and paymasters.
- Leaders: StackUp, Biconomy (ERC-4337 SDKs), and Pimlico (52% market share in user ops).
Spotlight: StackUp
- Bundler: Open-source Go implementation supporting private/searcher modes.
Paymasters:
- Verification Paymaster: Off-chain gas payments (e.g., credit cards).
- Deposit Paymaster: Gas fees via ERC-20 tokens.
- Profitability: Earned 1,057 USD in July 2023, dominating Arbitrum with 5 ETH in August.
👉 Explore how StackUp optimizes AA infrastructure
Spotlight: Pimlico
- Alto Bundler: TypeScript-based, Chainlink-integrated for ERC-20 pricing.
- Profitability: 637 MATIC on Polygon (July 2023).
Spotlight: Biconomy
- SDK: Simplifies user ops for DApp developers.
- Market Share: 15.07%, mostly on Polygon/Avalanche.
AA-Related EIPs and Innovations
Core Standards:
- ERC-6551: NFT tokenization protocol complementing AA.
- EIP-6662: User-friendly wallet authentication.
- ERC-6900: Modular AA for flexible smart contracts.
Optimizations:
- ERC-1271/6492: Signature verification improvements.
- EIP-7204/7197: Custom token standards for AA wallets.
ERC-4337 Roadmap
- Short-Term: Expand market synergy with L2s.
- Medium-Term: Modular bundlers/paymasters, UX refinements.
- Long-Term: Potential enforced EOA-to-AA migration.
Future of AA Infrastructure
Market Trends
- Growth Potential: 310x increase if AA adoption matches EOAs.
- Challenges: Low infrastructure adoption due to ERC-4337’s evolving state.
Product Innovations
- Opportunities: Permissionless modular tools, DApp SDKs, independent account layers.
- Monetization: Focus on high-value use cases (e.g., DeFi/GameFi integrations).
👉 Discover the future of AA infrastructure
FAQs
1. What is account abstraction?
AA enables smart contract wallets to manage transactions without EOAs, enhancing UX and flexibility.
2. How does ERC-4337 benefit users?
It standardizes smart wallets, allowing features like social recovery and gas sponsorship.
3. Which chains are leading AA adoption?
Polygon, Optimism, and Avalanche currently lead in AA infrastructure deployment.
4. Can EOAs migrate to AA wallets?
Yes, via proposals like ERC-7377, though full migration remains long-term.
Disclaimer: This content is informational only and not financial advice. Crypto assets are volatile; assess risks carefully. OKX Web3 Terms apply.