TLDR: Account Abstraction (AA) is a method of authentication that eliminates the need for private and public keys to access accounts. Instead, it relies on smart contracts to verify the account's identity.
In simpler terms it's like how, in Web2, data abstraction hides all the complex stuff and makes everything run smoother. Take high-level programming languages for example, developers can write code without losing sleep over the nitty-gritty details of how the hardware functions. It's like speaking a language without having to know every single word in the dictionary. Plus, this saves time and enables more complex operations.
Similarly in the world of Ethereum, AA brings two different types of accounts in Ethereum, and makes it one.
According to Ravindra Kumar, founder of non-custodial wallet Frontier, AA is still a concept in Ethereum, but lots of teams currently are working on creating their very own versions of it like Starknet and zkSync. “There are lots of possibilities to it, like enhanced security, social recovery, multi-signature out of the box,” he added.
To understand how AA works, one needs to know the two types of Ethereum accounts.
As of now Ethereum has two types of accounts: Smart Contracts and Externally Owned Accounts (EOA).
The idea of Ethereum Account Abstraction is to merge the strengths of the two types of accounts and make it one. Simply put, account abstraction would mean that regular users switch from EOAs to CAs.
Using AA in smart contract wallets can make them more flexible, but it also increases the risk of attacks. Upgrading to a new standard can introduce bugs and security risks, the Web3 authentication platform Dynamic shared in its blog. The wallets also require a global entry point contract that needs to be well protected. Additionally, there may be issues with higher gas fees and lack of cross-chain compatibility.
On the other hand, MPC (Multi-Party Computation) wallets can be used alongside AA to provide a secure key management system. The benefits of AA may outweigh the risks, depending on each individual's needs and risk tolerance. Nonetheless, it's worth keeping an eye on the developments happening with AA so that you can make the most informed decision about your crypto wallet.
Shagun is the founder of Makeraves, a global PR agency that specializes in emerging tech and Web3 companies. As a former tech journalist, she loves to geek out on the latest tech trends. When she's not busy running her PR biz, she loves nothing more than empowering women in tech.
This is not financial advice. If you don't want to spend money investing in crypto or Web3 — you don’t have to. The intent of this article is to help others educate themselves and learn.