Cypher Capital Account Abstraction Report: Advantages and Disadvantages, Existing Infrastructure and Outlook

Author: Chairman: Bill Qian, Researcher: Bonan Yuan

Abstract

• What is Account Abstraction (AA)
  Differences between AA, EOA, and CA
  Development history of AA accounts
  Parity Wallet
  Gnosis Wallet
  UniPass
  Implementation principles of AA (ERC4337)
  Differences between AA and MPC
  MPC wallets are still essentially centralized custodial wallets

• Advantages of AA
  Social recovery
  Gas payment on behalf
  Seamless cross-chain
  Security checks

• Current disadvantages of AA
  Each chain/Layer2 needs to be created separately
  High cost of creating AA
  Gas costs several times that of EOA
  Gas fee estimation under ERC-4337 standard
  Dapp compatibility, blockchain explorer compatibility

• Native Account Abstraction (NAA)
  Methods of implementing AA on public chains outside of ETH
  Near
  Aptos / Sui
  ZKsync
  Starknet
  ICP
  Advantages and disadvantages of native AA

• Existing AA infrastructure
  Bundler
  Paymaster

• Significance of AA for large-scale blockchain applications
  AA achieves centralization, usability, and security simultaneously.
  Paymaster transfers user costs
  Higher security

• Prospects of AA
  Using native security chips on mobile/computer devices for hardware wallet security experience
  Cross-chain + AA, chainless experience for users
  Advertising integration, Dapp promotion subsidizing gas
  Full-chain gaming
  Intent-based transactions

What is Account Abstraction (AA)

Differences between AA, EOA, and CA

The essence of Account Abstraction is Contract Account (CA). In Ethereum, there are two types of accounts:

• Contract Address

• Externally Owned Accounts

A simple example is that the Contract Address is the address where the contract is deployed. Any contract that can be called in Ethereum has a contract address, such as the USDT contract address. The EOA account is what we currently know as the ETH account, which is the account displayed in the Metamask wallet.

0xdac17f958d2ee523a2206206994597c13d831ec7, this address is the token contract address for USDT. Contract addresses cannot be created directly from the outside but are created and managed by EOA. The EOA that created the USDT contract address is 0x36928500Bc1dCd7af6a2B4008875CC336b927D57.

Thus, we understand that AA accounts are a special type of Contract Account (CA). In ETH, AA accounts still need to be created by EOA and are controlled by external EOA, as the only way to interact with the chain in ETH is initiated by EOA. Therefore, AA is a standardized and modular implementation of CA wallets and is continuously iterating.

Development history of AA accounts

The above text explains the relationship between AA and CA. Before the ERC4337 standard was proposed, there were already a considerable number of CA wallets. Below are three mainstream CA wallets and their working principles.

Parity Wallet

In the early development of ETH, multiple contract wallets emerged, the most famous being the Parity wallet developed by the team of PolkaDot founder Gavin Wood. Parity is the Rust implementation of the ETH node, corresponding to the Geth node developed in Golang. Parity Wallet is a multi-signature contract wallet that allows a contract account (CA) to be controlled and managed by multiple EOAs. In 2017, a hacker stole over 150,000 ETH by discovering a bug in the Parity wallet. This incident also raised people's distrust of CA wallets.

Therefore, AA wallets need a lot of practice and standardization to prevent similar incidents from happening.

Gnosis Wallet

Gnosis's multi-signature wallet is currently the mainstream Multi-sig wallet and is used by most institutions and developers. A considerable number of teams store development funds in Gnosis's multi-signature wallet to prevent team members from acting maliciously. Notable teams using Gnosis Safe include Yearn, Aave, and Balancer. Gnosis Safe has high security, but its use is relatively expensive, which is a common issue with CA wallets.

UniPass

UniPass Wallet combines MPC technology and CA contract wallets, allowing users to log in socially without self-custody of EOA wallets. It is important to note that both Parity Wallet and Gnosis Safe still require users to self-custody their private keys. The general process of UniPass is:

• Social login simultaneously creates a CA wallet on-chain

• Interaction with the chain
  User initiates a transaction
  MPC verifies the validity of the user's transaction
  The EOA wallet controlled by MPC initiates a transaction to the user's CA account
  The CA account executes the transaction and pays gas to UniPass's paymaster

It should be noted that UniPass's original AA solution does not strictly implement the ERC4337 standard. The control of the wallet is still managed by the EOA controlled by UniPass's MPC.

Implementation principles of AA (ERC-4337)

The essence of AA is a standardized, modular CA account, primarily reflected in the following innovations in 4337:

• Bundler: Traditional CA accounts still require users to initiate transactions through external EOA accounts, meaning users still need to deposit ETH in their EOA accounts to pay gas. In 4337, users package transactions into UserOperation and send them to the bundler, which initiates the transaction, allowing users to complete transactions without needing to reserve gas in advance.

• BLS aggregate signature verification: The bundler packages multiple UserOperations into a single transaction and generates a BLS aggregate signature, which is then verified on-chain to validate all signatures' validity at once.

• Paymaster: Users can designate a paymaster to pay gas.

The above image roughly describes the standard transaction process under ERC4337.

1. Users package UserOp and send it to the bundler.

2. The bundler verifies the validity of the user's UserOp and packages it into a transaction.

3. The bundler submits the transaction to the ETH mainnet.
   EntryPoint: The contract entry point where the bundler submits the transaction.
   handleOps: The contract specifically used to execute user transactions.
   Paymaster: The contract used to pay gas on behalf of users.

We can summarize the biggest differences between AA and traditional CA as follows:

1. Users do not directly submit transactions but hand them over to the bundler for packaging.

2. Signature verification is transferred from the consensus layer to the contract layer, verifying signatures within the contract.

3. The introduction of a modular paymaster allows users to freely choose gas payment on behalf.

Differences between AA and MPC

Before fully understanding AA, many people often confuse the concepts of AA and MPC because they both support features like social recovery and no browser plugins. The essential differences between AA and MPC are as follows:

• AA is still decentralized and exists on-chain, while MPC is centralized and often managed by one or more institutions.

• Transactions executed by AA are completed by the AA contract address, while MPC is completed by institution-managed EOA, so MPC is still a custodial EOA account.

• The execution of AA transactions involves interactions with multiple AA-related contracts on-chain, while MPC involves direct interactions with EOA, and there are no additional gas costs for MPC.

Next, let's introduce MPC and its characteristics.

• MPC technology is relatively mature, and centralized exchanges' hot wallets have implemented MPC to prevent single points of failure, significantly enhancing the security of centralized exchanges.

• MPC consists of multiple nodes, with each node only possessing a shard of the private key. Only when multiple MPC nodes reach a consensus can they sign transactions, so the theft of a single node's private key does not lead to the loss of funds.

• Currently, there are many open-source MPC solutions, and the specific principles can be referenced at https://tor.us/, an open-source MPC node solution developed by Web3Auth.

MPC solutions are widely used in current social logins, and many projects have launched MPC wallets to meet the chainless wallet experience, allowing users to avoid installing plugin wallets and managing private keys. In the industry, such custodial wallets are collectively referred to as WaaS (Wallet as a Service). Mature projects include:

• Web3 Auth

• Particle Network

• Magic Link

• Coinbase Base

In the face of the rapidly emerging WaaS services, it is foreseeable that there will be more products providing WaaS services in the future. However, centralized exchanges have an absolute user base and extensive commercial experience in this area, so it is likely that all centralized exchanges will provide related services in the future.

Advantages of AA

Social Recovery

The biggest disadvantage of traditional EOA accounts is that users need to self-custody their private keys, which poses the following problems:

• Users have a high cognitive cost, and most users cannot understand public and private keys.

• Once users lose their private keys, they cannot recover their accounts.

AA is designed to allow users to establish social recovery accounts, leveraging one or more external EOA accounts to regain control over the AA. The common process for social recovery is as follows:

1. The user loses the current EOA account controlling the AA, or the current EOA account is stolen.

2. The user's AA is bound to two additional EOA addresses:
   A friend's EOA address
   An institution's custodial EOA address

3. These two additional EOA addresses will initiate a claim against the AA account, and after completing a 2/3 multi-signature proof, the AA will switch the bound EOA address to the user's new EOA account.

Through this appeal method, even if the user loses the EOA account controlling the AA, they can still change to a new EOA through social recovery. Unlike the social login of MPC, this social recovery is entirely based on a decentralized solution, eliminating the single point of failure risk of MPC.

Gas Payment on Behalf

Gas payment on behalf is the core of mass adoption of blockchain applications. For new users entering Web3, the biggest pain point is that they need to pre-load gas before interacting with the chain. However, the threshold for new users to acquire ETH or other chain tokens is relatively high, significantly increasing the cost of acquiring new users for Web3 applications. By using the paymaster of AA for gas payment on behalf, it allows the paymaster to subsidize users' gas in the early stages, lowering the entry barrier for Web3.

Seamless Cross-Chain

Another core issue affecting the mass adoption of Web3 is the cross-chain problem. Suppose a user has ETH on blockchain A (like Ethereum) but wants to experience an application on another chain B (like Matic or BSC). The user first needs to swap to the corresponding chain's token and use a cross-chain bridge to transfer assets to B. The entire process is cumbersome and lengthy. Paymaster can integrate cross-chain protocols, such as Layer0/Warmhole, allowing users to recharge on chain A and seamlessly use applications on any other chain, eliminating the sense of boundary between chains and making it easier for new Dapps to attract users from other chains.

Current Disadvantages of AA

The above text mentioned the advantages of AA accounts; however, the ERC-4337 is still rapidly iterating and innovating to address some existing disadvantages of AA.

Each Chain/Layer2 Needs to be Created Separately

Unlike EOA accounts, an EOA account can be created and used across any EVM-compatible chain with the same public and private key pair. However, because AA is essentially a CA account (Contract Account), using AA on any chain or Layer2 requires redeploying a new AA contract. The deployment cost of AA contracts is high, which may discourage users from using AA.

Additionally, if users deploy incorrectly, such as using different factories to deploy AA contract accounts, it may lead to different AA addresses on different chains, causing considerable confusion for users. Currently, the AA Wallet Factory has implemented the generation of the same AA address across different chains, but in practice, users still need to carefully check the protocols they are using to ensure that the AA addresses are the same across different chains to prevent potential future troubles and confusion.

High Deployment Costs of AA

As mentioned above, AA accounts require users to deploy Wallet Factory-generated AA contracts separately on different chains and Layer2. Even though the gas costs on current sidechains, EVM-compatible chains, and Layer2 are relatively low, it is still a significant expense. Under the current gas prices, with ETH priced at $1800, deploying an AA account on the ETH mainnet costs approximately $20-40, while on EVM-compatible chains or Layer2, it ranges from $0.5 to $5. For most users, it is hard to accept paying the deployment fee for AA before they have even used a Dapp. If this fee is subsidized by the Bundler or Paymaster, the subsidization cost is still too high and requires strong incentives.

Gas Costs Several Times That of EOA

Depending on the implementation method of AA and the number of transactions bundled by the Bundler at once (the more transactions, the lower the gas cost per UserOP), the current standard ERC4337 transaction gas consumption may be several times that of a conventional EOA account. This is because a transaction initiated by an AA account often requires calling three or more contracts and involves complex calculations like on-chain BLS signature verification. The current ERC4337 standard is also optimizing for this, with routes including:

• Simplifying the number of contracts called in AA account transactions.

• Introducing precompiled contracts for elliptic curves in ETH to reduce on-chain signature verification gas consumption.

Gas Fee Estimation under ERC4337 Standard

The above mentioned that using the ERC4337 standard incurs relatively high costs. So what are the specific costs? First, here is a knowledge point to popularize, which is the formula for calculating gas fees:
fee = gas × price

So, what are the specific costs of deploying and using ERC4337? The StackUp team has conducted accurate calculations in their blog.

https://www.stackup.sh/blog/how-much-more-expensive-is-erc-4337

Table 1. Gas for ERC-4337 transactions

From the above chart, we can see:

• The cost of creating an AA account is approximately 20 times that of an EOA transfer.

• The cost of a simple native token transfer for an AA account is about 4 times that of an EOA.

• The cost of ERC20 transfers for AA is only 1.5 times that of EOA.

Table 2. Gas fee estimates for ERC-4337 transactions

The above chart shows the cost estimates for various operations of ERC-4337 AA accounts under current gas prices. We can see that:

1. The cost of creating an AA account on the ETH mainnet is extremely high, approximately $20-30.

2. Under Rollup, due to Rollup's data compression technology, the cost of creating an AA account is lower, similar to transfer costs.

3. On other EVM-compatible chains, due to lower base gas fees, the cost of creating an AA account is relatively low.

To summarize the cost estimation of ERC-4337, since the cost of creating ERC-4337 AA accounts on the mainnet is high, the large-scale adoption of ERC-4337 is likely to occur first on Layer2 and EVM-compatible chains.

Dapp Compatibility and Blockchain Explorer Compatibility

Another reason currently hindering the development of AA is the infrastructure's compatibility with AA contracts. Currently, most Dapps, except for native AA chains, only support EOA accounts. Supporting AA requires Dapps to use AA's SDK to initiate transactions and change query parameters to obtain user information.

Additionally, the user experience of blockchain explorers is currently more designed for EOA accounts, such as Etherscan. To better facilitate AA account queries, blockchain explorers may need to undergo a series of optimizations in UI and UX to allow users to more easily understand changes in their accounts.

Native Account Abstraction (NAA)

Advantages and Disadvantages of Native AA

On new public chains outside of ETH, most have already implemented native AA accounts.

• Advantages
  Consensus layer support

  Native Account Abstraction (NAA) means that account abstraction has been implemented at the consensus layer of the chain, i.e., within the nodes of the chain, without needing community developers to develop and deploy. Such AA contracts generally belong to internal contracts or system contracts, developed and maintained by the blockchain developers.

  Lower deployment costs and additional gas overhead

  Internal contracts often have higher permissions and priorities, and their gas calculation methods differ from ordinary/external contracts. Therefore, native AA has lower deployment costs compared to 4337 and generally does not significantly increase gas overhead for transactions.

• Disadvantages
  Lower flexibility

  Because upgrades to native AA require the public chain developers to be responsible, they often necessitate soft forks or hard forks of the chain, making them less flexible than the modular ERC4337, thus limiting iteration speed and future feature offerings.

• Learning from ERC-4337's experience to increase scalability

  However, chains that have implemented native AA are also actively learning from the scalability and modularity of ERC-4337, allowing developers to expand more functionalities based on native AA.

Near

Near has implemented native AA at the consensus layer, with accounts stored directly on the blockchain. Users can control accounts through multiple access keys and support social recovery (Email, phone number). The following image illustrates the differences between ETH accounts and Near accounts.

Aptos / Sui

Due to the Resource Ownership model of Aptos and Sui, they have also implemented native AA at the consensus layer. Taking Aptos as an example, Aptos accounts are a set of resources on the blockchain, so creating an account in Aptos requires preloading Aptos to complete account initialization. Accounts in Aptos/Sui also support changing the authentication key, but the account address remains unchanged, among other AA features.

ZKsync

Unlike Near/Aptos/Sui/Starknet, ZKsync supports both EOA and AA at the consensus layer. Therefore, ZKsync can initiate transactions using both EOA and AA, allowing it to utilize the currently mainstream Metamask wallet as well as the AA Argent wallet. ZKsync's AA design references ERC-4337, thus ensuring good compatibility with EIP4337 wallets and Dapps. Currently, the additional gas consumption for transactions initiated by ZKsync's AA is approximately execution_gas + 20000. At the time of writing, this is about $0.01. Compared to non-native AA ERC4337, the overhead is minimal.

Starknet

Starknet natively supports AA and does not support transactions initiated by EOA. The design of Starknet's AA accounts also references ERC4337, and currently, Starknet's AA contracts are provided by OpenZeppelin, developed using the Cairo language.

ICP

The native AA account in ICP is called Internet Identity, abbreviated as II. The implementation of II differs significantly from ERC4337. Internet Identity uses WebAuthn, commonly used in Web2 frameworks, allowing users to control accounts using the built-in security chip of their mobile devices and freely add or remove devices. II effectively turns users' mobile devices into hardware wallets.

Existing AA Infrastructure

Bundler

The Bundler replaces the original node Mempool's position in the AA ecosystem. Users' UserOps are no longer sent to Validators but are sent to Bundlers for packaging and then submitted on-chain. The current mainstream bundlers are as follows:

• Stackup Bundler:

  Stackup's bundler is implemented in Go lang, designed for easy integration with Go Ethereum (geth), and is the first fully compliant production standard bundler for ERC-4337 on this list. Stackup is actively maintained and has comprehensive documentation, making it the most mainstream bundler currently. Stackup provides bundler services without requiring teams to set up their own bundler services.

• Infinitism Bundler

  Infinitism's bundler is developed in TypeScript and has been developed by the original authors of ERC-4337. Infinitism also develops ERC-4337 contracts, so its bundler has the best compatibility with ERC-4337. However, since it is developed in TypeScript, its performance and stability still need further validation.

• Silius(AA-bundler) Core member of the Ethereum protocol, Vid Kersic, is developing the Rust-based Silius(AA-bundler), which aids in integrating AA tools into the Rust ecosystem.

• Skandha Skandha is a TypeScript-based bundler developed by Etherspot. Etherspot is active in the implementation of bundler's mempool. In April 2023, Skandha passed all tests.

• Voltaire

  Voltaire is a bundler protocol developed by the Candide team to support their own Candide wallet. Voltaire is a Python-based implementation of ERC-4337. Voltaire currently has good support for the open-source wallet developed by Candide.

• Rundler

  Rundler is a Bundler protocol developed by Alchemy, currently the largest node service provider in ETH. Rundler has not yet been open-sourced, but due to Alchemy's massive user base, it may gain substantial traffic support.

Current Pain Points of Bundler

Bundler is currently in rapid development and iteration.

• Communication between bundlers

  A current pain point that bundlers need to resolve is the consistency and communication of the bundler's mempool. Suppose there are multiple bundler protocols in the market, and there is a lack of communication between bundler protocols. In that case, it can lead to a severe problem of DDoS attacks on bundlers. If a user simultaneously initiates transactions to multiple bundlers without communication, these bundlers will simultaneously package UserOps and send them to validators. At this time, only the first bundler's UserOp will be executed, while the remaining bundlers' transactions will be rejected due to the same nonce. If the user's paymaster has insufficient balance, the bundler will pay invalid gas for these UserOps. Therefore, communication between bundlers is currently a problem that needs to be solved to prevent UserOp spam attacks on bundlers.

• Decentralization of bundlers

  Currently, bundlers are highly centralized. If a bundler blacklists certain users, it will prevent those accounts' transactions from being executed. This severely violates the decentralization of blockchain and the basic logic of permissionless access.

Paymaster

Paymaster is the most crucial part of AA, as it can subsidize users' gas, significantly lowering the entry barrier for Web3. Below are some currently mainstream implementations of paymaster.

• Stackup's Paymaster Stackup's paymaster is part of the stackup AA ecosystem. Stackup has implemented a paymaster dashboard, allowing Dapps or other service providers to set up their subsidy accounts to sponsor users' transactions at https://app.stackup.sh/sign-in.

• Biconomy Dashboard

  Biconomy Dashboard enables organizations and developers to leverage AA components in their projects. Project parties can configure their projects to pay gas fees for users through Paymasters and add conditions for gas sponsorship. By registering their paymaster for any supported chain, Dapps can significantly simplify users' Web3 experience.

Wallets

• Ambire

  Ambire is a web wallet based on AA and is a user self-custodied web wallet that supports plugin wallets, hardware wallets, and social logins. Ambire also issues a Wallet token for governance of the Ambire wallet. Ambire currently supports mainstream EVM-compatible chains and Layer2.

• Argent

  Argent is currently the most mainstream wallet in the Layer2 ecosystem and has already supported major Layer2 projects like Starknet and ZKsync.

• Avocado

  Avocado is a web wallet that allows users to pay all gas fees using USDC and provides a seamless user experience across different chains.

• Safe

  Safe is the multi-signature CA wallet mentioned earlier, developed by Gnosis, and is primarily used by institutions and teams to manage funds due to its high security and usage costs.

• Sequence

  Sequence supports social logins and provides a no-plugin wallet experience.

Significance of AA for Large-Scale Web3 Applications

AA Achieves Centralization, Usability, and Security Simultaneously

Traditional EOA accounts often fail to achieve decentralization, usability, and security simultaneously.

• Self-custodied EOA wallets, like Metamask, meet decentralization requirements but require users to manage their private keys, which poses a high entry barrier for new users. If the device is compromised, private keys can easily be stolen.

• MPC custodial EOA accounts allow users not to self-custody private keys, but MPC is still controlled by institutions. If the institution acts maliciously or is hacked, there is still a single point of risk, which does not satisfy the decentralization logic of blockchain.

• AA wallets can precisely solve these issues. When onboarding users, the bundler can create accounts on behalf of users and manage the private keys of the EOA controlling the AA. Once users become familiar with Web3 or their on-chain assets reach a certain amount, they can decentralize the control of the AA's EOA account through smart contracts, such as using hardware wallets.

Paymaster Transfers User Costs

Under the traditional EOA framework, users often need to acquire chain tokens, such as ETH, to use Web3 applications. This involves using CEX's deposit services, exchanging for the required chain tokens, and finally transferring them to the newly created EOA account. The entire process requires a significant amount of basic Web3 knowledge, and in many regions, this process is quite cumbersome. By introducing the paymaster of AA, the initial onboarding costs for users can be transferred to the Dapp project parties. The transfer of gas fees has significant implications for the mass adoption of Web3 applications.

Higher Security

• Security Audits of Paymaster

  Currently, ERC4337 is still in a very early stage, and tools based on ERC4337 are emerging one after another. On the paymaster side, auditing users' UserOps can prevent rug pulls, such as excessive approvals and transfers of hacked funds. The security audits of paymaster can use methods that are very mature in the financial field of Web2 to review problematic transactions, ensuring the safety of users' funds.

• Account Isolation

  Another innovation being developed is the security isolation of accounts, such as separating funds accounts and gaming accounts. When users utilize familiar DeFi and transfer functions, they use accounts with stricter security audits for funds. When users attempt gamefi or unfamiliar DeFi, they use gaming accounts. This way, without increasing the number of private keys users need to manage, the design of account security isolation ensures the safety of users' funds at the underlying level.

Prospects and Opportunities of AA

Using Native Security Chips on Mobile/Computer Devices for Hardware Wallet Security Experience

Currently, most devices, such as mobile phones and laptops, have built-in security chips, such as the Apple T2 Security Chip used in Macs and iPhones. Therefore, essentially, every device equipped with a Tee chip is a highly reliable hardware wallet. However, these security chips currently do not support ECDSA or other commonly used blockchain signature algorithms.

• Current EOA Private Key Security
  Plugin/Mobile Wallets

  The plaintext of private keys in current plugin/mobile wallets is directly stored on the device. If the device is hacked, users' assets can be quickly lost. Therefore, browser plugin wallets, like Metamask, have high usability but low security.

  Hardware Wallets

  Hardware wallets ensure that private keys never leave the device and cannot be directly accessed from the outside. However, most users cannot always carry their hardware wallets. They are very secure but have low usability.

• After introducing AA, using device security chips

  Through AA wallets and innovative on-chain verification methods, transactions can be signed directly by the device's security chip, ensuring that users' private keys never leave the device, making them more secure than traditional EOA accounts. Currently, Internet Computer's Internet Identity and a project called porton wallet from the ETHBogota Hackathon have implemented a solution that uses device security chip signatures + session keys, allowing users to fully utilize devices like mobile phones/computers while achieving the security of equivalent hardware wallets.

Thanks to the highly modular design of ERC-4337, through the expansion and iteration of ERC-4337, future AA accounts will achieve significant improvements in security.

Cross-Chain + AA, User-End Chainless Experience

Currently, another verification issue hindering the mass adoption of Web3 is the fragmentation of the blockchain ecosystem across different chains.

• Current Experience of Using DApps Across Chains

  A simple example is that if a user on ETH wants to experience an application on BSC, what do they need to do? First, the user needs to exchange ETH for the corresponding USDT/USDC and use a cross-chain bridge to transfer this USDT/USDC to BSC. Then, they need to purchase some BNB through CEX and transfer it to BSC. Only then can the user experience some DeFi applications on BSC. The entire process is time-consuming, has poor security, and has a steep learning curve, as most new users do not know what a cross-chain bridge is.

• Experience After Introducing AA + Cross-Chain Paymaster

  By using currently universal cross-chain protocols, such as Layer0 + AA, the process of using DApps across different chains can be greatly simplified. The paymaster can fully integrate cross-chain protocols, achieving "charge it once, pay everywhere." For example, if a user recharges USDC in the paymaster on ETH, as long as the user's AA accounts on different chains are the same and bound to the same paymaster, the paymaster can keep accounts, and the same account address can be used on any EVM-compatible chain/Layer2 without requiring the user to manually transfer assets.

Advertising Integration, Dapp Promotion Subsidizing Gas

The biggest advantage of introducing paymaster is that it allows Dapps to programmatically set conditions for subsidizing users.

• Without AA and Paymaster Subsidies

  In the past, there have been instances where Web3 ecosystem projects subsidized gas to acquire customers. However, subsidizing EOA accounts is challenging because it is impossible to programmatically set conditions for subsidies, leading to the subsidization funds often being exploited by bots and opportunists, such as directly transferring away the subsidized funds without attracting real customers.

• Subsidies After Introducing Paymaster

  Currently, paymaster dashboards generally introduce the function of subsidizing gas fees for Dapps. Project parties can easily set the prerequisites for subsidies in the dashboard, ensuring that only transactions meeting specific conditions qualify for subsidies. By controlling the transaction conditions in subsidies through paymaster, Dapps can attract more real users under controllable costs.

• Due to the modular design of ERC-4337, future paymasters can integrate more services, such as advertising service providers, opening up broader scenarios for the mass adoption of Web3.

Explosion of Mobile Dapps

Under EOA, due to the dominance of Metamask, current Dapps are mainly accessed via web DApps, leading to a high market share for web plugin wallets. However, the mass adoption of Web3 relies on mobile user participation, so the development and adaptation of AA will be more Mobile Native.

Full-Chain Gaming

With the rise of Dark Forest, the trend of full-chain gaming has quietly emerged. However, the experience of EOA in gaming is very poor. Imagine that every time a player performs any operation in the game, they need to use a wallet to authorize or sign a transaction, making it difficult for players to focus on the game itself. Therefore, AA accounts specifically designed for full-chain gaming, known as Arcade Accounts, have emerged. Arcade Accounts are a specialization of ordinary AA accounts, allowing players to authorize specific operations for certain games, eliminating the need for repeated authorizations and signed transactions, greatly enhancing the gaming experience. Thus, the rise of full-chain gaming is likely to drive the large-scale adoption of AA accounts.

Intent-Based Transactions

Recently, the concept of intent-based transactions has gained popularity with the rise of Unibot, and Uniswap has recently launched the Uniswap X project to promote the implementation of intent-based transactions. What are intent-based transactions? The following example can explain it simply:

1. Alice wants to exchange 1 ETH for 1000 USDT. Alice sends this intent to a specific trading pool.
   This intent defines that Alice will transfer out 1 ETH and receive 1000 USDT.
   The intent also defines the validity period of the transaction, such as 1 hour.
2. Other traders in the trading pool continuously search for executable intents.
   If someone is willing to execute it, that counterparty initiates another intent, willing to transfer 1000 USDT to Alice and receive 1 ETH.
   The trade is matched and completed.

3. Finally, a bundler packages multiple intents and submits them on-chain.

Intent-Based Transactions have the following advantages:

1. Deterministic execution prices, which have a significant advantage over the price uncertainty of swaps.

2. Lower gas fee consumption, as multiple intents can be aggregated on-chain, resulting in lower gas fee consumption per transaction.

3. More diverse trading experiences, as intent-based transactions open up the possibility of off-chain trade matching, leading to the emergence of more diverse trading models. For example, Unibot has implemented order books, trade front-running, and a series of new functionalities.

Currently, CowSwap has implemented intent-based transactions based on EOA, but intent-based transactions based on EOA still require users to authorize (ERC-20, Approve) before initiating. However, under the new account structure of AA, users can send both Approve and Intent to the bundler, allowing the AA's bundler to access Intents Poll, match intents, and achieve a more convenient trading experience.

References

1. https://www.stackup.sh/blog/how-much-more-expensive-is-erc-4337 ```