The term account abstraction refers to the blockchain system that allows users to access their accounts without requiring a private key. This means that an account can be accessed by a smart contract rather than a private key. However, in special cases, the smart contract may require signatures from more than one private key, but for other tasks, the smart contract can directly delegate the task to other existing smart contracts with decided conditions.
Through account abstraction, developers can now create advanced decentralized applications that were impossible to create before. This concept allows smart contracts to interact with other smart contracts and establish a secure window for processing transactions without requiring any administrative authority to look over their shoulders. The concept also allows users to create various types of transactions. Through account abstraction, smart contracts will be able to perform certain functions on behalf of users, such as paying their transaction fees. This concept can also reduce transaction costs by allowing smart contracts to bundle up multiple transactions, reducing overall transaction costs.
Account abstraction makes Externally Owned Accounts (EOAs) automatable like smart contracts are. However, EOAs work according to their original design. However, the current design of EOAs is burdensome and rigid for a technically inclined user. To attain this goal, there is a need to separate EOAs from their rigid systems; hence, the account abstraction came into existence.
A system, similar to this one, was presented for smart contracts, which were called EIP-2938. As we discussed above, on the basis of predefined conditions, this system allows smart contracts to perform tasks on behalf of the user without requiring their private key. This is done by extending the transaction’s validity by executing the EVM bytecode. The motive behind this was to reduce gas fees as well as limit the amount that users are willing to pay. According to the developing standard EIP-4337, account abstraction for EOAs can be done by going around the consensus layer with the help of an alternate mempool, a pseudo transaction, and bundlers of transactions while including them in the block for validation. Ethereum Co-founder Vitalik Buterin praised EIP-4337 in a tweet in October 2022. Bypassing the consensus layer allows users to modify the network to a certain extent by bending certain rules of the blockchain.
Account abstraction is believed to have the potential to transform the interaction between blockchains. The concept provides a flexible ecosystem for blockchain and allows the development of a wide range of decentralized applications. Another upside to account abstraction is, that it creates more flexible and sophisticated smart contracts, meaning that those smart contracts will be able to perform complex tasks, interact with other smart contracts, and even hold digital assets on behalf of their users.
In addition, account abstraction allows for a secure and sophisticated custodial wallet along with wallet recovery. Some of its examples are Argent and Braavos.