ERC-4337!

This post will cover what ERC-4337 is to an extent and why it is benefical for the growth of NFT's and onboarding the next millions of users. During ETHMexico, Vitalik's presentation covered the benefits and possibilites building on ERC-4337. I will be covering a few specific's that benefit the NFT industry:

• First-Time wallet creation
• Security

First-Time Wallet Creation

At the present time when a user interacts with a smart contract to mint an NFT. The user must already posses a wallet to sign into the web3 page. Then interact with the smart contract to mint the NFT. The process of owning a wallet to interact with a project's mint is difficult for new users who want to enter the space. I know, you're probably thinking the process to create a new MetaMask, Rainbow, etc...wallet isn't even that difficult! Well, for the "normal" person who is not educated in the web3 space it is a diffuclt subject. ERC-4337 allows new users to enter the space by utilizing UserOperation through account abstraction. UserOperation struct contains a field initCode (type bytes) to create a wallet while completing the bundle transaction for the user! All of this happens in the background during a user's first mint! This operation happens via an Entry Point Contract via Bundlers. If these terminologies are new to you here is a brief visual review: Image source: Vitalik.eth

The user interacts with the entry point contracct via a bundler and paymasters. Paymasters can sponsor transactions. Paymasters are intruging because it opens up a new door for NFT projects creating utility or benefits of being a project holder. Projects can now sponsor additonal mints to exisitng holders and break away from the current private minting process where holders pay mint price & gas fees or just gas fees for a free mint. Payments are made in ETH but ERC20 can be utilized in the transaction process. Here is an image showing the user's interaction with the entry point contract via the bundler: Image source: Vitalik.eth

Security

You're probably wondering what the security paramters are in place when a wallet is created on-chain via smart contract interaction. In the current landscape of External Owned Account (EOA) wallet security the only protection a user has is their private key. Once the users mnemonic private key is compromised the wallet is typically drained of all assets. ERC-4337 is creating a new market for smart-contract wallets that can provide privacy and security on Ethereum. There are a few key security measures that I view benefical for new users and existing users in the space. ERC-4337 allows wallet recovery measures from multi-sig to social recovery. These are two immensely needed options in the space. NFT phishing scams are happening every single day! From six figure Bored Ape Yacht Club to Cool Cats NFT!

Multi-sig and social recovery will not prevent a user from falling for a phishing scam. However, the two options stated allow a user to save their assets which would be typically drained in EOA's. Utilzing a multi-sig will allow the compromised account funds to be halted from being transferred out of the wallet until the required signatures sign to approve that transaction. Social recovery wallet option is also benefical for NFT's. Social recovery will only have one managing key that will be limited to specific functions and is also time limited. You can view of this method as the most practicle for NFT projects. A user will select multiple community members as their social recovery. If a user loses or account becomes comprimsied. The user can now utilize social reocvery and ask community members to replace that account key. These two methods will prevent phising scams and users from losing their assets and NFT's!

Wrapping up

The Ethereum merge from POW to POS is less than 48 hours! The roadmap forward after a succussful merge has ERC-4337 in it's eyes. As Vitalik.eth stated in his presentation in ETHMexico, ERC-4337 and on-chain smart contracts are fundemental to Ethereum's vision. This inevitable standard will be benefical for millions of existing and new users. ERC-4337 wil onboard millions of new users into the space without worrying about security. Although, they should take caution in falling for scams, specifically phishing scams. It will give users a sense of comfort knowing they have their community as social recovery or multi-sig.

Please feel free to reach out to me for questions, comments, or concerns via:

• Twitter: @CryptoBonsai33