Cointime

Download App
iOS & Android

ERC-4337 and The Possibilities of Smart Contracts

In recent times, the Ethereum blockchain has made headlines for significant upgrades. It began with the migration from a proof of work to a proof of stake consensus. Following the shift in mechanism, the chain needed validators to stake their tokens to support on-chain transactions. With its new consensus mechanism, owners of ETH could stake their tokens to support the blockchain.

However, participating in staking meant losing control over your cryptocurrencies. To resolve this issue, the web3 company announced the Shanghai update. This hard fork will enable ETH holders to unstake their tokens for the first time. Although this initiative was scheduled for March, it will likely take effect by April.

What Makes the ERC-4337 Ethereum Standard Different?

In truth, this is not the first time Ethereum has made significant modifications to its blockchain. As mentioned above, there have been several updates in the past. So, what makes this particular upgrade different?

Well, a blockchain is completing a significant upgrade to its blockchain without having to shut down operations or incur any form of downtime. In the past, every form of an update means tampering with the Ethereum Protocol. However, the ERC network has become so scalable that the developers can effect changes without making in-depth adjustments.

However, the high point is not just that web3 companies can expand the possibilities of their blockchain without having to touch its components. The major detail is what Ethereum achieved with theirs.

For those who are not aware, ERC-4337 Ethereum Standard converts regular user accounts into smart accounts. This implies that holders can do way much more than they normally could with accounts held on this blockchain. In fact, the team is taking “true ownership” to a whole new level.

For example, players will no longer be over-reliant on features like seed phrases, private keys or individual transaction approval when using third-party platforms like Metamask. Instead, they will perform more than one task, and complete multifactor authentication via code.

Before now, blockchain wallet accounts were overly segregated. Probably due to limited scalability, Ethereum had to over-compartmentalize the different aspects of transactions. There were separate sections for cryptocurrencies, cash, debit card or coupon. This process made management very difficult and only those accustomed to the technicality could use these accounts.

The ERC-4337 Ethereum standard changed the entire process. In simpler terms, there will be less complexity and people will be able to manage their accounts in one place. This process is referred to as “Account Abstraction”.

Thanks to this account extraction procedure, users can now recover lost or stolen funds. It is without a doubt that lost or stolen digital assets are the bane of DeFi. People have lost significant funds because they forgot their keyphrase or access details. With this smart contract, users can now utilize social recovery and a multisig wallet.

For the record, ERC-4337 is an Ethereum Standard, not a Token Standard. This means that it does not follow the rules that guide the development of cryptocurrencies on blockchain protocols.

Smart Contracts and the Possibilities

Before now, blockchains were very limited. For example, Bitcoin did not have any use case outside of cryptocurrency. Ethereum brought a significant amount of scalability by allowing for other use cases. This formed the foundation for further growth.

Many other blockchains followed this footprint and began expanding on the possible use cases. Chainlink, for example, developed an oracle that connected web2 to web3. This process enabled the integration of traditional tech with decentralized technology.

Zenith Chain recently migrated from the proof of stake to the proof of staked history. This process helped to improve our security architecture and efficiency.

One common ground for the cases above is that the different networks above had to change integral parts of their networks. This process can be very tasking and cause companies to pause their operations. With this initiative by Ethereum, those days will fast become a thing of the past.

Considering that firms can incorporate better features into their blockchain without tampering with the internal architecture is a very significant improvement. All they need to do is ensure that their chains are scalable and can work with smart contracts. Once they meet this requirement, they can simply develop smart contracts that can fulfil or fix specific deficiencies.

For a very long time, people have called for blockchains o improve asset recovery. Statistics show that an average of 1500 BTC is lost daily due to issues regarding digital asset safety and control. Despite the demands, nobody believed that the solution will come from smart contracts instead of actual integral chain protocols.

Closing Thoughts

The entire process goes to show the limitless potential that blockchain can achieve. Even better, these things are possible without having to alter integral structures or halt operation. Like with the proof of stake migration, it is expected that many more web3 firms will incorporate the use of smart contracts to fix existing problems. We may just be in for another paradigm shift.

Comments

All Comments

Recommended for you

  • U.S. Congressman Mike Flood: Looking forward to working with the next SEC Chairman to revoke the anti-crypto banking policy SAB 121

     US House of Representatives will investigate Representative Mike Flood's recent statement: "Despite widespread opposition, SAB 121 is still operating as a regulation, even though it has never gone through the normal Administrative Procedure Act process." Flood said, "I look forward to working with the next SEC chairman to revoke SAB 121. Whether Chairman Gary Gensler resigns on his own or President Trump fulfills his promise to dismiss Gensler, the new government has an excellent opportunity to usher in a new era after Gensler's departure." He added, "It's not surprising that Gensler opposed the digital asset regulatory framework passed by the House on a bipartisan basis earlier this year. 71 Democrats and House Republicans passed this common-sense framework together. Although the Democratic-led Senate rejected it, it represented a breakthrough moment for cryptocurrency and may provide information for the work of the unified Republican government when the next Congress begins in January next year."

  • Indian billionaire Adani summoned by US SEC to explain position on bribery case

    Indian billionaire Gautam Adani and his nephew, Sahil Adani, have been subpoenaed by the US Securities and Exchange Commission (SEC) to explain allegations of paying over $250 million in bribes to win solar power contracts. According to the Press Trust of India (PTI), the subpoena has been delivered to the Adani family's residence in Ahmedabad, a city in western India, and they have been given 21 days to respond. The notice, issued on November 21 by the Eastern District Court of New York, states that if the Adani family fails to respond on time, a default judgment will be made against them.

  • U.S. Congressman: SEC Commissioner Hester Peirce may become the new acting chairman of the SEC

    US Congressman French Hill revealed at the North American Blockchain Summit (NABS) that Republican SEC Commissioner Hester Peirce is "likely" to become the new acting chair of the US Securities and Exchange Commission (SEC). He noted that current chair Gary Gensler will step down on January 20, 2025, and the Republican Party will take over the SEC, with Peirce expected to succeed him.

  • Tether spokesperson: The relationship with Cantor is purely business, and the claim that Lutnick influenced regulatory actions is pure nonsense

     a spokesperson for Tether stated: "The relationship between Tether and Cantor Fitzgerald is purely a business relationship based on managing reserves. Claims that Howard Lutnick's joining the transition team in some way implies an influence on regulatory actions are baseless."

  • Are we finally ready for a gas limit increase?

    There has been growing discussion around the possibility of increasing Ethereum’s gas throughput, either by raising the gas limit or reducing slot time. The key argument in favor of this is that the hardware requirements for running a validator have steadily decreased over the past four years.

  • Cointime August 17th News Express

    1.VanEck and 21Shares Solana ETF Form 19b-4 Suspected to be Removed from CBOE Website

  • Ethereum network gas fee falls back below 1 gwei

    According to Etherscan data, the current Ethereum network gas fee has fallen below 1 gwei, currently at 0.937 gwei.

  • Cointime August 10th News Express

    1. The U.S. Internal Revenue Service has released a new draft of the crypto tax form, which no longer requires filling in wallet addresses and transaction IDs

  • Ethereum ACDC #139: Pectra's Devnet 2 upgrade is under debugging, and the release date of Devnet 3 is still to be determined

    Christine Kim, Vice President of Galaxy Research, summarized the main content of the 139th ACDC conference call. The debugging of Pectra's upgraded Devnet 2 is currently underway, and the release date of Devnet 3 is yet to be determined. Developers will hold weekly testing update meetings starting from Monday to better coordinate the release of Pectra's Devnet. The decision to include EIP-7688 in Pectra's upgrade has been postponed again.

  • Ethereum network gas fee drops to 1 gwei

    According to Ether­scan data, the current gas fee on the Ethereum network has dropped to 1 gwei.