We are welcoming you to our weekly digest! Here, we discuss the latest trends and advancements in account abstraction, as well as bring some insights from Etherspot’s kitchen.
Please fasten your belts!
Enhanced Web3 wallets are becoming crucial for widespread adoption in the crypto world. Experts like Luis Ocegueda from Trust Wallet and Alvin Kan from Bitget Wallet emphasize that these wallets are evolving to meet user expectations, simplify transactions, and improve security.
Crypto adoption has surged, with DappRadar reporting a record high of 10 million daily unique active wallets (dUAW) in Q2, a 40% increase from Q1. However, blockchain technology’s complexity remains a significant barrier for newcomers. An April report revealed that 35% of crypto investors lack confidence in their knowledge, with many unfamiliar with basic blockchain concepts.
Enhanced Web3 wallets, such as smart wallets, are addressing these challenges by providing a smoother onboarding experience using account abstraction technology. These wallets streamline processes like gas fee management and cross-chain transfers, making the crypto ecosystem more accessible and appealing to both new and experienced users.
As Web3 evolves, so do user expectations. Enhanced security measures, better UI/UX, and integrated payment systems are becoming essential features of modern Web3 wallets, driving mass adoption and making the crypto ecosystem more user-friendly and secure.
Speed Markets, powered by Thales Protocol, has evolved into a sophisticated Account Abstraction dApp, marking a significant milestone in the dApp space.
Since its launch in August 2023, Speed Markets has introduced an adrenaline-fueled method for traders to participate in crypto markets. With over 1,800 users onboarded, $3.25 million in trading volume, and 44,000 markets created across five chains, Speed Markets has rapidly gained popularity.
The transition to a fully on-chain dApp utilizing Account Abstraction, facilitated by Biconomy’s SDK and Particle Network’s Social Login wallet solution, offers users a seamless experience akin to Web2 applications. Trading is now simpler, with smart contracts handling transactions in the background, eliminating gas fees through Biconomy’s Session Keys and Paymaster architecture.
The integration of Pyth Network price feeds ensures accurate and real-time data for traders, enhancing the platform’s reliability and security. This pivotal component supports the dApp’s existing structure and the new standalone app designed for intuitive trading experiences.
Additionally, the integration of Account Abstraction on the Base network includes gas sponsorship from Biconomy and Base, covering up to 100,000 transactions.
Speed Markets is setting the pace for future developments in decentralized trading, combining advanced technology with user-centric features to create a comprehensive trading environment.
In a recent interview, Fuse CEO & Co-founder Mark Smargon shared insights on the company’s plans to launch a ZK-powered Layer 2 network, enhancing privacy, scalability, and integration with traditional finance (TradFi).
Zero-knowledge proofs (ZKPs) and Layer 2 solutions are pivotal in their approach, allowing transaction verification without exposing sensitive details and reducing costs, making blockchain technology more viable for everyday financial activities.
Smargon emphasized the importance of UX for businesses transitioning to Web3. Fuse’s white-label middleware focuses on user-friendly experiences and seamless onboarding, bridging Web2 onboarding processes with blockchain-native architecture. This approach democratizes access to payment applications and platforms, driving financial inclusion.
FuseBox’s account abstraction features, based on ERC-4337, eliminate technical barriers and enhance UX by allowing multiple actions in a single transaction and offering gasless transactions.
Looking ahead, Fuse plans to upgrade its stack for better security, scalability, and interoperability. By integrating with Polygon CDK and transitioning to a zkEVM, Fuse aims to significantly boost transaction throughput, reduce costs, and enhance privacy. Strengthening tokenomics and creating a robust, user-friendly blockchain environment are key milestones driving the next wave of Web3 adoption.
Since the launch of the ERC-4337 standard in April 2023, over 8 million accounts have been created, with 28 million user operations (UserOps) conducted. The BundleBear 2024 Half-Year Report aims to provide a deeper insight into the “valuable users” within the ERC-4337 ecosystem and their activities.
The report categorizes smart accounts into Light users (1 UserOp/month), Medium users (2–10 UserOps/month), and Heavy users (more than 10 UserOps/month). Based on a three-month average, 3% of monthly active accounts are Heavy users, while 91% are Light users. Interestingly, Base has the highest concentration of Heavy Users, with 74% of them operating on this chain.
ERC-4337 accounts hold a total of $9.2M in tokens, with Ethereum leading in total value locked (TVL) at over $6M. Notably, 35% of ERC-4337 TVL is in rsETH, with more than 1,000 accounts holding $3.2M. However, 75% of accounts with non-zero balances hold less than $10, highlighting that most ERC-4337 activity is driven by free apps.
ERC-4337 usage has consumed $3.2M in gas fees. Ethereum is the top chain by ERC-4337 bundler gas spend, with over $1M spent bundling UserOps into transactions. Base and Arbitrum follow, with $745K and $450K spent respectively.
You can read the full report here.
A new framework based on the ERC-7579 proposal has been introduced, integrating a module to leverage onchain verifiable credentials and zero-knowledge (zk) proofs in modular smart accounts. The blog post extends previous work on self-sovereign identity and account abstraction for cross-chain user operations.
The framework aims to standardize onchain executions by separating user authentication and transaction authorization while preserving privacy and regulatory requirements throughout the transaction lifecycle.
The system validates zk proofs generated by VCs to authenticate users and authorize operations, making the Validation Module an appropriate choice for validating user operations before execution.
The framework consists of three layers: an application layer for wallets and service apps, a network layer for generating ZKPs and managing encryption keys, and a sequencing layer for interconnecting L2s with the Ethereum mainnet. The concept focuses on standardizing secure, privacy-compliant onchain executions to facilitate global blockchain service adoption.
Users issue onchain merklized VCs stored in identity wallets. They generate and validate ZK proofs to access service apps and compile User Operation objects. The validation module verifies these proofs and calls the isValidSignature function, ensuring legitimate user operations.
The framework leverages ERC-7579 for validating user operations, ERC-1271 for signature validation, ERC-4337 for account abstraction, and ERC-165 for interface detection.
This framework offers significant value for large-scale enterprises requiring validation logic before authorizing onchain operations. Use cases include trading, DAOs, and supply chain management, ensuring privacy, regulatory compliance, and enhanced security.
Last week, Brussels hosted the largest annual European Ethereum event, the Ethereum Community Conference (EthCC). At the event, Etherspot’s CEO highlighted a real-world application of Account Abstraction technology from the Mystic Valley Music Festival.
Festival-goers enjoyed seamless transactions for tickets, food, and drinks powered by Etherspot, Fuse Network, and Freedom World App by Bitazza.
The Freedom World App on Fuse Network’s blockchain, powered by Etherspot’s Account Abstraction solutions, offered seamless payments through a mobile app introducing closed-loop digital tokens and functioning NFTs. This real-world use case allowed attendees to use NFT tickets, reserve accommodations, and maintain their digital balance for effortless purchases.
Beyond transactions, the app fostered community engagement with news feeds, push notifications, quests, and incentives, encouraging attendees to explore the event, discover exclusive content, and connect with others. This greatly enhanced the overall event experience.
The Mystic Valley Festival in Thailand showcased the utility of the Freedom World App and Account Abstraction, setting a new benchmark for event experiences. The strategic partnership between Etherspot, Fuse, and Freedom World App demonstrated blockchain’s potential, enabling secure and convenient transactions powered by blockchain technology.
Start exploring Account Abstraction with Etherspot!
*Learn more about account abstraction here.
*Head to our docs and read all about Etherspot Prime.
*Skandha — developer-friendly Typescript ERC4337 Bundler.
*Arka — an open-source Paymaster Service for gasless & sponsored transactions.
*Explore our TransactionKit, a React library for fast & simple Web3 development.
*Follow us on X (Twitter) and join our Discord.
❓Is your dApp ready for Account Abstraction? Check it out here: https://eip1271.io/
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