Introduction and Advantages of AA and EOA

Deep Tide TechFlow: The AA wallet has been widely discussed in public and has been described as the "iPhone moment" that could completely change the way Web 3 end users interact. However, many listeners may have only heard of the concept of AA without a deep understanding. So, from a business perspective, what are AA and EOA accounts, and what are their advantages and disadvantages?

DegenYin:

From a personal perspective, AA is a new account system similar to transitioning from manual transmission to automatic transmission, just like a car gradually transitioning from manual to automatic transmission. The AA wallet may have had a slightly less smooth user experience at the beginning, but over time, it has gradually become mainstream.

The promotion of AA is an initiative that dates back to before 2017, aiming to achieve interaction with online through smart contract accounts. However, some previous proposals failed because they might require changes to the consensus layer of the Ethereum chain, affecting stakeholders already on Ethereum.

Difference between AA and EOA:

• Mainstream wallets use EOA, which requires a signature for each transaction (for example, in mining, it is necessary to add liquidity first, then authorize control for farming, and then stake LP. If multiple mining operations are to be performed, there may be 6-8 steps).

• In the AA wallet, users can interact with the chain through one-click batch operations, which is closer to the Web2 user experience. This is one of the benefits of AA wallets or smart active accounts for users, as it allows ordinary users to easily trade without needing to deeply understand complex concepts. Additionally, the ultimate solution for AA is that any token can be used to pay Gas, no longer limited to using tokens on the main chain.

Integration and Prospects of MPC and AA

Deep Tide TechFlow: Many people are debating the advantages and disadvantages of MPC wallets and AA wallets. In fact, our previous conclusion was that these two are not particularly mutually exclusive. What are your views on these two, and how do you judge the potential and possibilities of their development in the future?

Allen:

Vitalik may be more dismissive of the MPC solution. MPC and AA can achieve some of the same things, such as social recovery and authorization/signing through different methods.

I believe these two technologies can be well combined. Products on the market, including UniPass and OKX, are working to provide users with solutions that can simultaneously implement MPC+EOA or MPC+AA.

The AA wallet itself is an abstraction layer that allows developers and service providers to add functionality that native accounts do not have.

• For example, in the AA wallet, many security features can be implemented, and transactions can be risk-assessed through a risk control engine to help users avoid risks, which is the biggest feature of the AA wallet.

• On the other hand, the biggest feature of the MPC wallet is the implementation of a multi-party custody mechanism, which is very suitable for B-end asset management and exchanges.

Overall, these two technologies are not mutually exclusive but can be combined very well.

• For C-end users, to achieve more widespread adoption, the MPC+AA solution may be more advantageous.

• However, for B-end asset management and exchanges, the MPC+EOA solution may be more suitable.

Luke:

To discuss whether MPC wallets and AA wallets are mutually exclusive, we need to understand that MPC is a more fundamental concept, which is the technology of key sharding, and the result can manage both EOA wallets and AA wallets.

MPC wallets can easily achieve social recovery and transfer risk control. MPC wallets are a wallet solution that combines the lack of programming ability with centralized control and can achieve some advanced functions, such as social recovery and transfer risk control, relying on centralized entity control.

• AA wallets will directly decentralize what is achieved through centralization in MPC on the chain, and therefore can also have many excellent features.

The technologies of AA wallets and MPC wallets can be combined. For example, in AA wallets such as OKEx and UniPass, MPC-related technologies are used for permission management and other parts.

In the short term, MPC wallets are more suitable for achieving rapid adoption by a large number of users, addressing concerns such as private key loss, and have low transaction fees and good compatibility with DeFi, which is very attractive to ordinary users. However, AA wallets, with their thoroughly transparent on-chain programming logic, may not be very appealing to ordinary users.

However, AA wallets, like MPC, can achieve social recovery or transfer risk control, and there is nothing that AA can achieve that MPC cannot. The highlight of AA is that it has a highly programmable account, capable of implementing some advanced technology, such as delegation, which EOA cannot achieve. Therefore, AA wallets may be more attractive to some professional users, such as DeFi professionals or institutions, in terms of advanced functionality.

In the long term, AA wallets may become mainstream because they abstract at the account level, which is important for the entire public chain.

Will:

Regarding MPC wallets, when I first learned about them, I thought their main feature was similar to multi-signature wallets, as they are a special type of EOA wallet. Multi-signature wallets require multiple private keys to sign transactions, for example, a 2/3 multi-signature wallet requires two out of three private keys to sign transactions, and its security lies in the fact that attackers need multiple private keys.

MPC wallets, on the other hand, from a technical perspective, do not require multiple private keys but rather split one private key into multiple parts, each managed by different participants, technically achieving so-called multi-party custody. This gives MPC wallets a clear advantage in terms of security, which is its main selling point. For users, MPC wallets are also very suitable for those unfamiliar with blockchain technology, as they do not require complex mnemonic phrases to easily associate and manage accounts.

As for AA wallets, I believe their feature lies in having a high ceiling and flexibility. In terms of user experience, AA wallets have a relatively high ceiling because smart contracts can be pre-set, allowing users to customize asset management, set transfer time delays, or set up multi-signatures. Therefore, AA wallets are suitable not only for professionals but also for some non-professional users. For some non-professional users, using an EOA wallet may be complex because they also need to consider the storage of private keys and mnemonic phrases, which may confuse them.

In addition, for ordinary cryptocurrency users, using an AA wallet may be more convenient because smart contracts can implement one-click swaps or mining, saving costs.

Therefore, I believe that MPC wallets and AA wallets are not mutually exclusive choices, and their advantages can be combined in different scenarios. In the future, there may be more hybrid wallets that leverage the advantages of both MPC and AA to meet the needs of different users.

AkaFish:

MPC wallets solve the problem of private key custody by splitting the private key into multiple parts, increasing security. AA wallets, on the other hand, aim to address some of the shortcomings of Ethereum accounts. Vitalik has proposed a comprehensive implementation of account abstraction, and AA wallets represent the future development direction of Ethereum accounts.

Many projects currently support AA wallets and consider them an important direction for the future of the Ethereum ecosystem. The advantage of AA wallets is that they can customize execution logic and add various features and protective measures to wallets. Compared to EOA wallets, AA wallets are more flexible. For example, they can hide complex logic in the background, making front-end interactions more user-friendly and intelligent, similar to traditional Web2 experiences.

AA wallets can also address the difficulty of private key management by setting wallet protection mechanisms, such as using email, phone, or Google verification to protect the wallet. Therefore, AA wallets are more intelligent and can attract more Web 2 users to participate, driving the widespread adoption of Ethereum.

In summary, AA wallets are an important development direction for the future of the Ethereum ecosystem and a core component for mass adoption. They will make Ethereum smarter, attract more users, and further drive the development of the entire Ethereum ecosystem.

Calman.eth:

I believe MPC wallets solve the problem of private key custody, while AA wallets address some of the shortcomings of Ethereum accounts. These improvements are crucial for the industry's prosperity, as they need to attract more Web 2 users and funds into the Web3 field.

From the perspective of an ordinary user transitioning from Web 2 to Web3, AA wallets are very interesting. For example, a user who only holds Dogecoin wants to invest in an NFT project and stake it in the NFT market to earn fees. AA wallets can solve this problem. Users only need to register a wallet on the OKX platform, then have their own AA wallet, transfer Dogecoin to the AA wallet, purchase NFTs using Dogecoin and pay gas fees, and then stake the assets. This process can attract more users and funds into the Web3 field.

However, for MPC wallets, it is difficult for ordinary users to understand the difference from multi-signature wallets. Through interactions with fans and community friends, I found that it is simpler to have them register and own their own wallet on the OK platform, making it more user-friendly than traditional wallets.

DegenYin:

MPC Wallets and AA Wallets

Simply put, MPC wallets and AA wallets are not mutually exclusive. In the short term, combining MPC and AA is more user-friendly. OKX plans to offer a light version exchange in certain countries, especially regulated ones, and also aims to provide a wallet specifically designed for novice users.

Users only need to register an account on a CEX, come to our wallet side, and the system will automatically provide them with an MPC wallet and a grounded AA wallet. This way, users not only do not need to understand complex private key concepts but can also enjoy the convenience of using Dogecoin or any other token as a covering option.

In the long run, the strategy aligns with Vitalik's vision, as EOA wallets have design flaws and may be replaced by outdated technology in the future. Although this process may take some time, OKX will continue to focus on both areas and provide a user-friendly wallet experience for users.

Impact of ERC-4337 on AA

The ERC-4337 proposal in the Ethereum community supports the development of AA wallets. Many Layer 2 solutions have native support for AA wallets. This may have an impact on wallet products and planning in the field.

DegenYin:

The founder of Argent Wallet, Julia, mentioned that they currently occupy 80% of the market share on starknet. The wallet supports three public chains: Ethereum, starknet, and zkSync. On starknet, only AA is supported natively, and there is no EOA. Developers must develop AA. In this context, they found that using ERC-4337 to pay stablecoins as gas fees and providing a one-click user experience is very popular.

However, they also deployed the Argent wallet on zkSync. She told me that 95% of developers do not support AA because the cost of developing AA is higher compared to EOA, requiring more work from backend to frontend. This means that users cannot truly experience the benefits of AA wallets when using Dapps that do not support AA, as it reverts to EOA.

Therefore, if a public chain supports both AA and EOA, the establishment of AA wallets will be a long process because developer support for AA is still limited.

In the future, there may be public chains like starknet that focus on supporting AA but not EOA. AA-related applications on such chains may perform better. EOA wallets may have some barriers, for example, MetaMask currently does not support starknet. The transition to AA wallets may take some time.

OKX's strategy is to have both AA and EOA, while providing a less obvious entry point for AA, allowing knowledgeable users to easily create AA wallets without disturbing unknowledgeable users.

Allen:

The development of AA wallets depends heavily on the developer ecosystem. As AA, developers can develop various extensions and plugins on top of it, allowing users to participate in the entire transaction lifecycle.

Most of our security data is used by on-chain Dogecoin traders, who check if the token contract has any backdoors or malicious risks (Pi Xuan Pan). Currently, EOA transactions cannot be blocked because the entire process is a single-step operation.

In contrast, AA transactions have risk control logic, which can help users check for malicious behavior in the token contract they want to buy or if they will encounter problems with selling. Users have already sent the transaction, but the transaction can be blocked through plugins/extensions, providing users with security protection without their knowledge. This is very important for introducing a large number of Web2 users in the future.

AA wallets are suitable for introducing Web2 users, as these users typically use platforms like Alipay and WeChat, which have strong risk control systems. In terms of security, AA wallets have an advantage, so GoPlus plans to collaborate with wallet service providers to develop security plugins. This way, users can automatically receive risk protection without needing to understand complex concepts or actively learn about security.

Luke:

The difference between native AA and Ethereum 4337:

• Native AA refers to the design and implementation phase of the chain, where all accounts are considered smart contract accounts from the beginning, without the distinction between traditional EOA (Externally Owned Accounts) and CA (Contract Accounts). On a native AA blockchain, all accounts are smart contract accounts, including user accounts and contract accounts, and they can all execute smart contracts. In this scenario, all transactions are smart contract transactions, whether they are simple transfer transactions or complex contract call transactions.

• Ethereum 4337 is a proposal to improve the existing account model of Ethereum, aiming to eliminate the difference between EOA and CA, making all accounts smart contract accounts, achieving a similar effect to native AA. Under the Ethereum 4337 scheme, all accounts can execute smart contracts, whether they are user accounts or contract accounts. However, this scheme is an improvement on the existing Ethereum foundation, rather than designing a chain from the beginning as native AA.

The promotion of AA on non-native chains like Ethereum may be more challenging because developers have limited understanding of AA, and most of the ecosystem leans towards EOA. Ethereum 4337 is a non-native AA, and it compromises to achieve AA through a somewhat indirect or imperfect solution. I believe Ethereum may still achieve native AA in 3-5 years (which is also Vitalik's goal).

Most Layer 2 chains are EVM-compatible, and to maintain absolute compatibility, account abstraction will also use a 4337-like solution, making it non-native AA as well.

Cobo is developing a product similar to a smart contract wallet and has realized that the market's support for smart contract wallets is still not sufficient, such as the inability to sign messages and many Dapps not supporting ERC-721.

However, Cobo has found some interesting user scenarios, such as the authorization feature. Users can delegate specific permissions, such as automatic trading, automatic closing, and automatic trading strategy authorization, to other accounts for execution. Only AA wallets can achieve this programmability of the authorization feature, which is very important for many DeFi enthusiasts, as it can automatically invest for you and withdraw assets when a protocol is hacked.

Therefore, we continue to explore new use cases for native AA wallets and smart active wallets. Our product is based on extension modules for smart active wallets, rather than the wallet itself, so we can collaborate with various AA wallets to enrich their use cases.

Attractiveness and Expansion Strategy of AA Wallets

Deep Tide TechFlow: Earlier, it was mentioned that AA wallets support more advanced scenarios, such as custody, which is a very attractive selling point for some users. However, we are more concerned about user and market feedback, as this is important for understanding demand. What are your thoughts on the attractiveness of AA wallets in the market? How can we attract more and broader users?

NingNing:

As Vitalik mentioned, AA, ZK, and stablecoins are the three pillars for the future mass adoption of Web3/blockchain. However, these three pillars currently do not serve the current native Web3 users but are being built to prepare for the next advantage and future mass adoption.

DeFi yield enhancement protocols will require users to create smart contract wallets, and the cost of creating a wallet, considering gas fees and related transaction factors, is $50, which is a barrier for both Web2 and Web3 users. In the future, AA wallets will most likely be on Layer 2 and not on the mainnet.

Currently, most users' feedback is that AA wallets like Argent are not user-friendly, bringing complexity and issues. For example, the Argent wallet will upgrade rapidly with starknet, and many people are not used to it, wondering why the wallet address needs to be upgraded and why it cannot be used without upgrading. During the upgrade process, many users' assets were lost. These are some of the issues that AA encounters in actual production environments.

AA and EOA have significant differences, and interacting with contracts will increase gas consumption. This means that the gas fees for each AA transaction are higher than EOA transactions. Therefore, AA increases the learning cost and gas cost in exchange for composability and programmability.

As described by Vitalik, if Web3 wants to be widely adopted and allow users to seamlessly transition from Web2 to Web3, AA is still needed as infrastructure, along with ZK and the Cancun upgrade, as well as further reductions in gas fees.

Currently, AA is in a situation where it can exist but is not necessary, and there is not a particularly strong demand for both project parties and users to use AA wallets.

Some applications related to AA have also appeared at ETHCC, such as Bob the Solver, which aims to serve as a transaction infrastructure based on "Intend." It is a combination of an AI robot and AA wallet, allowing Web2 users to seamlessly enter Web3 without barriers. Users only need to tell Bob the Solver their requirements, and the AI robot will automatically make appropriate DeFi transactions and execute them on behalf of the user using the AA wallet.

Twitter Campaigns used AA and Twitter SDK to help X (formerly Twitter) achieve content monetization.

Although AA wallets may not be widely adopted at the moment, their innovation and experimentation are still very good, and they will bring opportunities and introduce more users to the industry. Therefore, in the long run, AA wallets will change the industry and have tremendous potential.

Callman.eth:

From the perspective of an ordinary user, I believe AA wallets have potential. Currently, the OKX exchange has basically implemented this feature, allowing users to choose a WEB3 wallet in the centralized exchange wallet and add an AA wallet to it. Although this process may be somewhat cumbersome, if we can simplify the operation in the future, it will be a very smooth path.

I envision a possible scenario: when users choose a WEB3 wallet on OKX, they can select a Light version, Deluxe version, or Professional version based on their needs. If they choose the Deluxe version, both the private key wallet and the corresponding AA wallet are already set up. This way, the next time they use it, users only need to click a button, and the wallet will unlock without needing to import an existing EOA wallet or generate a new wallet in it.

If this issue is resolved, the entire process will become very simple. Users can buy cryptocurrencies on OKX and then transfer them to their AA wallet to perform the necessary operations. Of course, legal compliance is another issue to consider.

From the perspective of an ordinary user, if this issue can be resolved, both exchanges and wallet projects will become the hottest projects in the future bull market.

AkaFish:

Wallets are just management tools, similar to infrastructure. Unlike some projects that quickly explode and are adopted by everyone upon release, the development of wallets takes quite a long time. The entire ecosystem also needs time to adapt after the upgrade, and Dapps also need time to adapt. The process from mainnet launch to the entry of a large number of users is relatively long.

The existing users are accustomed to using the MetaMask wallet and do not have an urgent need to upgrade asset management to a smart wallet. The Argent wallet may currently perform well in the smart wallet space, with a relatively high level of intelligence, but it does not create a sense of urgent demand in terms of user experience.

However, as the entire ecosystem, including the development of the Ethereum mainnet, progresses, this emerging infrastructure may gradually become mainstream, attracting more users. With further development, AA wallets may become mainstream in the future, attracting more users.

Will Westbrook:

From the perspective of ordinary users, AA wallets have market potential.

• For non-crypto users, AA wallets lower the barriers to entry into the crypto space. Traditional EOA wallets have many limitations, and many people may give up using them due to trust and process issues.

• For existing EOA wallet users, AA wallets are more convenient in terms of interaction, with features like one-click swap and one-click mining, including the OKX wallet, which has impressed users.

How to Widely Apply AA Wallets?

• Firstly, an ecosystem that supports AA wallets needs to be established, integrating AA wallets into L2, decentralized applications, and decentralized exchanges, providing more features and services to increase user convenience and attract more users.

• Secondly, besides OKX, other CEX platforms can also consider integrating AA wallets to retain existing users and attract new ones.

• Additionally, in terms of user experience, AA wallets need continuous iteration, with smart contract code requiring rigorous auditing and testing to prevent vulnerabilities and attacks. The risk is uncontrollable.

Opportunity for OKX's AA Launch

Deep Tide TechFlow: What considerations were taken into account for the timing of OKX's recent launch of the AA solution?

DegenYin:

OKX originally planned to launch the AA wallet last month, but due to significant investment in promoting BRC, the launch was delayed. However, the timing of the launch is also good, as Vitalik recently promoted AA smart contract wallets again at EthCC in Paris.

OKX did not make an accurate judgment on the launch timing because the cryptocurrency industry changes very quickly, and we are experiencing and iterating products in this industry.

We have been researching AA wallets and finally have the resources to push and launch them in a short time. Although the current product may not be perfect, we have many optimization and user-friendly product schedules that will be continuously iterated over the next six months.

In the future, we will communicate directly with the Ethereum Foundation, especially the core team of 4337, and optimize the user experience. The 4337 team also has a big plan, but it is currently confidential. It is certain that within the next year, AA wallets will gradually become well-known and permeate various fields.

Success Metrics for Wallets

Deep Tide TechFlow: What are the important metrics for evaluating a wallet?

Allen:

In evaluating wallet metrics, I believe Alipay is a good example. For ordinary users, wallet evaluation can be considered from several aspects.

• First is security, as users are concerned about the protection of their assets.

• Secondly, when conducting various transaction operations and investment strategies, users hope for seamless protection and risk control mechanisms for easier trading.

• Third, preventing fraud and malicious risks is also an important factor.

Another important metric is the usability of the wallet. Users want to be able to use it easily without spending too much time learning. However, there is still room for improvement in this aspect for current Web3 wallets.

From a developer's perspective, the wallet, as infrastructure, can support the entire ecosystem. In the Web3 environment, the wallet needs an open ecosystem to meet the needs of different developers. This also means that wallet vendors in the future can develop various functions, while also allowing more developers to customize their own functions. Similar to MetaMask, they have made some attempts in this regard, opening up MetaMask's Snap for developers to develop their own plugin applications on this Snap. Then users can vote on which plugins or features can ultimately be merged into the main version. This may not be widely focused on at the moment, but I believe it will become very important in the future.

Luke:

Although the cryptocurrency industry covers many different concepts, many of them can be analogized through the experience of the Web2 industry. The success of a wallet finds a core metric. Different types of wallets can focus on different metrics.

For ToB (business-to-business) wallets, metrics like TVL (Total Value Locked) can be considered. For example, Shape wallet, one of the largest smart contract wallets in the Ethereum ecosystem, has $60 billion in assets. However, its transfer frequency is relatively low, with only a few transfers per wallet per week.

From the perspective of activity, you might think that the wallet's performance is average. But from the perspective of carrying the early scale and quantity of ToB wallets, it is actually a very successful product. The North Star metric for most ToB wallets might be like this.

For ToC (business-to-consumer) wallets, the focus is on user activity, growth in different lifecycles and stages, retention of new users, and long-term user activity and retention, and even considering the tenure of users.

AkaFish:

The success of a wallet can be evaluated by the number of users, as user usage is a core indicator. To achieve a large number of users, a profitable effect is inevitably needed. For example, the TP wallet has been successful due to its good user experience. In the future, wallets will undoubtedly be important entry points, such as the OKX wallet integrating exchange functions and being integrated into Dapps, providing a smooth user experience, making it a very powerful strategic direction. The current bear market may have affected its popularity, but with the market turning around, combined with profitability and user acquisition, the OKX wallet is bound to occupy a considerable share.

Calman.eth:

For ordinary users, the wallet should be simple and easy to use, with simplified steps, while also focusing on security. From the perspective of the wallet industry, it is important to bring the traditional world into Web 3 to achieve new prosperity.

Simplifying the user experience and quickly guiding users into this field is a major trend for future wallets. Including the OKX wallet, various centralized exchanges are also actively leveraging existing users to introduce them to Web 3.

NingNing:

Firstly, the network and ecosystem in which the wallet operates, including the ecosystems and applications it connects to, and its position in the entire network, need to be considered.

On the other hand, the scale of assets and user base supported by the wallet needs to be considered. For example, a wallet like OKX, with a large amount of assets and users, can smoothly guide users to various enhanced services.

Will Westbrook:

The main functions of a wallet include asset storage and transfer, as well as a convenient interactive experience. Security and experience are the most important factors.

In terms of assets, the wallet needs to ensure the security of private keys and assets, preventing leaks and malicious attacks.

In terms of experience, users want to be able to easily operate and interact with assets on both mobile and PC.

DegenYin:

I believe the future of wallets needs to improve three key metrics: security, user experience, and lowering barriers.

In terms of security, in addition to monitoring and effort, OKX plans to launch a security center to allow users to understand the security of their assets and prevent potential risks. At the same time, we value user feedback and continuously improve the security and usability of the wallet.

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