MetalSwap R&D - Account Abstraction

MetalSwap R&D [BLOG] (1)

Blockchain technology and the broader crypto space has remained a niche sector, with only a few individuals actively interested and engaged in various DeFi protocols. This is largely because the crypto world is inherently complex, deterring many from learning essential steps such as private key custody and personal wallet creation.

To achieve the much-desired mass adoption, it's necessary to simplify user interactions with dApps like MetalSwap. For this reason, the Account Abstraction feature has been developed within the EVM ecosystem, potentially solving many of today's DeFi challenges.

In today's article, we explore what account abstraction is, how it could enhance the overall DeFi user experience, and consider its application in MetalSwap's dApp, potentially making hedging contracts accessible even to those who currently find interacting with DeFi difficult. 

Introduction to Account Abstraction

Account abstraction introduces a new type of account within the Ethereum blockchain and all available EVMs. These are called smart accounts, aimed at simplifying the onboarding of various users to Web 3.

A key feature of this account type is that they are programmable and self-custodial. The name gives us clues about this new feature of the Ethereum ecosystem. In computing terms, abstraction means hiding the technical process from the end-users, who remain unaware of how the tool they are using works. This is analogous to what happens in Web 2.0 applications, where users engage with a service without understanding its technical functioning. Currently, in Web 3.0, there are many technical barriers, particularly for less tech-savvy users or those unwilling to learn new procedures. Account abstraction aims to abstract these technical complexities, simplifying the end-user experience.

As mentioned, this is achieved by introducing a new type of account, the "smart account". Previously, ETH had only two types of accounts: the EOA (Externally Owned Account), like personal addresses in MetaMask, and contract accounts, which manage smart contracts.

Smart accounts can be seen as a fusion of these two types, adding programmability to the user's wallet side.

What will change for the end-users? 

Through account abstraction and the introduction of smart accounts, users will be able to possess wallets without needing to save a private key, interact with various blockchains without owning the currency to pay for transaction gas, or even bypass the entire wallet creation process.

Users will have much more personalized control over their account security, perhaps by adding extra security features like a daily spending limit or a type of multisig to validate transactions.

The overall desired experience will resemble that of Web 2.0, without losing the characteristic advantages of Web 3.0 such as data ownership and the ability to operate in a trustless and decentralized manner.

What could change in a dApp like MetalSwap?

We now explore how account abstraction might be integrated into MetalSwap's dApp to improve its usability. The first implementation might involve social logins, allowing users to access the dApp simply with an email and password, without needing a personal wallet like MetaMask.

Other implementations could include sponsored fees, periods during which the dApp covers network commission payments, so end-users don't have to pay them or allow users to pay the network fees but with all the existence tokens.

What is the current state of account abstraction?

It seems quite exciting and incredible, especially compared to what we're used to in the current web 3.0. But where is account abstraction? Why haven't we seen any of these UX improvements yet?

Currently, the Ethereum community is at a crossroads, facing the decision to grant these "extra powers" to one of the two existing account types, either the EOAs (Externally Owned Accounts) or the contract accounts.

One approach would be to allow EOAs to execute code (which they cannot do today), or to enable smart contracts to execute transactions without waiting for input from EOAs.

The discussion is still ongoing, although the second option seems to be the preferred route for the community. 

As of now, the discussion primarily revolves around EIP-4337 and we will update all the MetalSwap community as soon as there are new developments in this area.

MetalSwap, the leading dApp in the field of Hedging Contracts, is ready to innovate with the introduction of account abstraction, and the team is eagerly anticipating the start of this revolution within web 3.


-The DeFi Foundation


✎ What is MetalSwap?

MetalSwap is a decentralized platform that brings Hedging Contracts on financial markets with the aim of providing coverage to those who work with Digital Asset and an investment opportunity for those who contribute to increase the shared liquidity of the project. Allowing the protection for an increasing number of operators.

With MetalSwap we enable Hedging Contracts on the DeFi field, AMM style.