What is ERC-4337

ERC-4337 is the latest ERC standard deployed on the Ethereum mainnet, which realizes the long-awaited account abstraction feature.

Account abstraction is a technology that combines external accounts and smart contracts. It allows users to conduct transactions using externally owned accounts (EOAs) controlled by smart contracts, also known as “smart contract wallets.”

For more information about account abstraction, please refer to “What is Account Abstraction.”

Before becoming an ERC standard, EIP-4337 was initially proposed in September 2021 by Vitalik Buterin and six others, and was officially released at WalletCon on March 1, 2023, becoming ERC-4337, opening a new chapter for “smart contract wallets.”

In fact, as early as nine years ago, Vitalik proposed the concept of account abstraction. It went through several EIP proposals in the meantime but was not approved. This was because all previous proposals required changes to the Ethereum underlying protocol, which would necessitate a hard fork. ERC-4337 avoids this issue. It is the only proposal that can achieve account abstraction without modifying the Ethereum protocol.

So, how does ERC-4337 implement account abstraction without changing the protocol?

How does ERC-4337 achieve account abstraction?

ERC-4337 does not alter Ethereum’s underlying consensus but introduces the concept of UserOperation to realize account abstraction.

UserOperation

A UserOperation is a transaction initiated individually by a user. It includes the transaction initiator (user), transaction requirements, signatures, and other transaction-related information. UserOperation can be read and verified by functions within a “smart contract wallet,” then uploaded to the Ethereum mainnet for successful transaction execution.

In the ERC-4337 standard, multiple UserOperations can form a UserOperation mempool. The UserOperation mempool functions similarly to a traditional mempool, serving as an in-memory pool containing multiple transactions.

UserOperations in the mempool are gathered and processed by miners or bundlers using services like Flashbots. The bundlers bundle multiple UserOperations into a single Bundle Transaction for validation, enabling batch processing of transactions.

When processing transactions, bundlers first pay the Gas fees for the Bundle Transaction, then later reimburse the users for the fees paid for each UserOperation. The processing order of UserOperations is also arranged according to a fee-priority logic, similar to traditional mempool processing.

Operation flow of the UserOperation mempool

What is the significance of ERC-4377?

The release of ERC-4337 has important implications for the development of crypto wallets, mainly in two aspects:

Security

The account abstraction enabled by ERC-4337 significantly enhances the security of crypto wallets. It supports more secure and efficient verification logic and signature schemes, moving away from reliance on single private keys and cumbersome mnemonics. Features such as social recovery via multi-signature schemes and biometric signatures further strengthen the security of user assets.

User Experience

ERC-4337 brings various flexible and convenient transaction features to crypto wallets. These features can improve transaction interoperability, increase user friendliness, and save transaction time. Examples include ERC-20 token fee payments, support for EVM-compatible networks, batch bundling of transactions, and one-click payments.

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