Ethereum ‘smart account’ adoption is low — the first rollup proposal wants to change that
Smart accounts have so far seen lacklustre adoption from Ethereum users, but removing the need for private keys might be an answer
Overearth/Shutterstock modified by Blockworks
The introduction of Ethereum Foundation’s ERC-4337 account abstraction standard earlier this year drew much attention, but adoption and retention are off to a slow start.
Existing hardware wallets rely on a pair of keys. If those keys are compromised, so are tokens in the wallet. The ERC-4337 standard was instead intended as a new baseline for how users interact with crypto wallets services, including social recovery mechanisms and other multisig options.
The standard turns Ethereum accounts into “smart accounts,” which are much more flexible to suit the needs of wallet holders.
According to data on BundleBear:
- Weekly retention for ERC-4337 smart wallets drops as low as 1% for accounts older than five weeks.
- An average smart account only sends five user operations.
- Revenue for transaction “bundlers” is also low, currently less than $8,000 per week.
Read more: What Are Smart Contract Wallets? A Beginner’s Guide
At the time of writing, daily active users are at around 3%, sixdegree data shows. Most smart account users today are on the Polygon network, making up over 66% of all smart account holders and almost all monthly new users by chain.
Despite the low adoption rates on Ethereum, industry participants remain optimistic about the future of smart accounts and have been actively working on proposals to spur usage.
John Rising, the co-founder of Stackup, an account abstraction infrastructure company, notes that many existing issues with ERC-4337 can be resolved with the first-ever Rollup Improvement Proposal, RIP-7560.
The existing ERC-4337 standard is considered a “semi-native+” smart account, where a user does not need a private key because the trustless relay network is designed to forward transactions to the blockchain.
Rising believes that the goal is to move towards a “native” smart account, where accounts would be able to specify their own validation logic, completely removing the need for a private key — something that RIP-7560 hopes to do.
“ERC-4337 has always been intended as a stepping stone to native account abstraction. The account abstraction proposal, RIP-7560, is designed to be backwards compatible with ERC-4337,” Rising told Blockworks.
Further discussions around the proposal and its applicability must still be considered. Native account abstraction has drawn concerns over the complexity it adds, as it introduces consensus layer changes rather than just high-level infrastructure layer modifications.
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