Everything you wanted to know about the ERC-4337 upgrade (but were afraid to ask).
Sometimes it feels like the entire crypto world is waiting for the Ethereum network’s Shanghai update, but there’s another big change coming up that will have an even more significant impact on the GameFi space: the ERC-4337 (“Ethereum Request for Comment 4337") upgrade, which should greatly simplify the adoption of the technology in multiple ways.
Read on to learn more about how ERC-4337 will impact the web3 space.
What is ERC-4337?
ERC-4337 is an upcoming upgrade to the Ethereum network, one that will allow for account abstraction and bring along a variety of new features along the way. Originally proposed in September 2021, it was eventually announced on March 1 this year.
This upgrade will likely accelerate the global adoption of web3 technologies as it solves many of the growing pains we’ve experienced over the past couple of years. ERC-4337 will allow users to recover lost wallets with a feature called “Master and Time/Locked Social Recovery”, which offers you the option to set up a trusted group of friends, apps, or platforms that can help with the recovery if you lose your device or forget your password.
The upgrade will also provide an alternative security option to seed phrases, offering two-factor authentication and biometrics as a separate way to secure your accounts. These voluntary measures are going to be much more traditional and easier to understand for general users who have limited experience with the web3 space, while also allowing the continued use of seed phrases for those looking for a truly decentralized security option.
Custom spending limits and automated trading options, where you are asked for your password if you go beyond the caps you’ve set for yourself, also serve as valuable protection against scams and hacks, increasing security.
ERC-4337 will also offer exciting new ways to handle transactions. Most importantly, it will enable gasless, or “sponsored” transactions, where users can perform transactions without incurring any fees for themselves by having their gas paid for by another wallet. This can help reduce the cost of using the Ethereum network and make it more accessible to users who are not familiar with the technicalities of blockchain technology.
You will also have the option to bundle multiple transactions together with a single click, submitting them to the blockchain in a solitary batch. This also means savings on gas fees and has the potential to lower the overall costs of making transactions on the network in the long run.
Last, but certainly not least, there’s the addition of session keys to the system. These are randomly generated keys to ensure the security of transactions between users and the protocol or game over a given period of time. During this period, all the player’s transactions will be automatically executed. This removes the need to sign for every single transaction over and over again in a single play session.
These upgrades offer exciting new opportunities for GameFi by making usage much more convenient for regular players, thereby making it easier to bridge the gap between web2 and web3 experiences without requiring reams of technical knowledge about the blockchain.
How does all this help out with the average gaming use case?
Behind all the technical terms, there are three key factors at play here: accessibility, scalability and security. The ERC-4337 upgrade to the Ethereum network offers solutions to all of these issues. For non-native users, the process of setting up a wallet and managing the transactions is a well-known (and huge) barrier to entry, and every upgrade that simplifies the process goes a huge way towards helping the adoption of the technology. The features described above bundled together may very well serve as a quantum leap forward in this area.
Additionally, as more users and applications come online, the Ethereum blockchain can become congested, leading to slow transaction processing times and high fees, resulting in a bad player experience. The potential of gasless transactions serves as an important shift when it comes to scalability issues, while also removing the burden of regular players of having to manage these costs by themselves, avoiding friction.
Indeed, it conjures the tantalizing possibility of professional fee-players emerging, similar to the Fusion model by 1 inch used to swap between liquidity pools: dedicated individuals will be able to pay the fees of the players of certain protocols, improving their experience and generating earnings for themselves along the way, getting remunerated by the dApp or the game directly.
Then there are the security concerns. There have been many cases of hacking and theft on blockchains, and there is always a risk that a smart contract could contain a coding error or that it could become a subject of a malicious attack – and that’s before you consider the possibility of the mishandling of technical funds.
Robust security upgrades will greatly enhance user trust and the general experience, allowing for a better conversion funnel of traditional gamers to the world of web3. The ERC-4337 upgrade will solve many of the issues that have slowed this digital adoption, and maybe the solution to finally onboard the masses.
If you’d like to take a deep dive into the technicalities of ERC-4337 and account adoption, you can check out a set of curated resources on this GitHub page.
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