On August 9th, the OKX Chinese community and Odaily Planet Daily co-hosted a TwitterSpace event. OKXWallet builder DegenYin, BitizenWallet core developer Winson, dappOS CTO Andy, CyberConnect co-founder Zhimao, Mantle infrastructure growth lead Zuki, UniPass Research Institute cyberorange, and Odaily Planet Daily author Qin Xiaofeng engaged in a comprehensive discussion on the development and related issues of the AA wallet.
Recently, OKX launched the AA smart contract wallet and will open source the wallet's smart contract code this week. Users can interact with multiple contracts in a single transaction through the AA smart contract wallet. As one of the first wallets to support multi-chain abstraction, OKXWeb3 wallet can meet the multi-level needs of experienced users while also considering the convenience and user-friendly wallet experience for beginners.
Qin Xiaofeng: First, please introduce yourselves and your respective projects.
Andy: Hello everyone, I am Andy, the technical director of dappOSsolution. We mainly focus on account abstraction and chain abstraction. In June, we received seed funding from RedShirt Capital and OKXVentures. Our project's main direction is to aggregate liquidity from different chains, allowing users to interact with any DAPP on our platform by signing a single transaction.
Winson: Hello everyone, I am Winson, the founder and developer of BitzenWallet. BitzenWallet is an MPC wallet developed by a Chinese team. We implement the MPC+AA solution, with the underlying architecture being MPC and support for EOA or AA on the upper layer. Our own AA wallet will soon be launched.
Zhimao: Hello everyone, I am Zhimao, the founder of CyberConnect. As a Web3 social protocol, in the V3 version, we integrate account abstraction, ERC4337, ERC3600, and other popular ideas into the protocol design, with a focus on user social interaction. We will soon launch our own AA wallet.
Zuki: Hello everyone, I am Zuki, the infrastructure and tools growth lead at Mantle Network. Mantle Network is an L2 based on OP, which went live on the mainnet in July and was incubated by the largest DAO organization, BitDAO. Mantle Network's TVL has reached $100 million, deploying over 100 DAPPs. In addition to supporting ERC4337, Mantle has also collaborated with AA infrastructure to build corresponding infrastructure. As a modular network, the mainnet serves as the settlement layer, with consensus relying on L1, and the data availability (DA) layer allowing us to save 50%-70% on GasFee compared to other L2 solutions.
Cyberorange: Hello, I am Cyberorange, a researcher at UniPass ID. UniPass ID is a team that has been focusing on smart wallets early on, including continuous follow-ups on new EIPs. We are a wallet that implements email and Google login on-chain. We will soon launch a MetaMask swap product.
Yin: I am Yin, in charge of the development of the OKX mobile wallet. OKX wallet has introduced MPC and AA wallets. As an application with a large user base in the industry, OKX wallet hopes to drive the industry development and ecosystem construction of AA smart contract wallets.
Qin Xiaofeng: What is the evolution path of Web3 wallets?
Winson: I have been involved in this industry since 2013. The development of Web3 wallets has evolved from early command-line wallets to PC client wallets and mnemonic wallets. Even mnemonic wallets have transitioned from a single set of mnemonics corresponding to a private key to gradually introducing HD mnemonic wallets with the development of BIP.
We can view the development of wallets from other perspectives, such as plugin wallets, mobile wallets, client wallets, browser wallets, and web-based wallets, but the underlying technology remains the mnemonic wallet, which is currently the mainstream.
The introduction of the new type of MPC wallet in 2019 is a technology used to replace the private key. Smart contract wallets were actually introduced as early as 2018-2019, but there was no unified standard at the time. It wasn't until the recent introduction of ERC4337 that a new standard was set for AA wallets, providing a better foundation for ecosystem development.
Yin: From a historical perspective, Winson has provided a detailed explanation. In 2017, I had the opportunity to attend a lecture by Vitalik Buterin. Vitalik had long been advocating for smart contract wallets to become the mainstream type of wallet for on-chain interactions. However, due to some resistance, ERC4337 was only recently introduced. Subsequently, I had the opportunity to have direct conversations with Vitalik about ERC4337 in Paris as an OKX representative. I also communicated with related teams and learned that the ERC4337 standard is still evolving, but a final standard will soon be established.
Qin Xiaofeng: The development of AA wallets has spanned several years. Is it primarily driven by user demand or by the introduction of the new ERC4337 standard by Ethereum?
Cyberorange: Actually, before the appearance of ERC4337, smart wallets as a track already existed, similar to Urgent. I think the current surge in AA wallet usage, the narrative of ERC4337, and the promotion by the Ethereum Foundation have attracted more attention to this track and drawn in more funding.
Firstly, we can see that there is definitely more demand. Compared to previous smart contract wallets, which had relatively simple functions, mostly involving setting a manager to recover accounts, the evolution of smart contract wallet functions, such as rebalancing in lending and the use of flash loans, better meets user needs. Additionally, compared to the previous bull market, there are now more EVM chains, and everyone's assets are fragmented. Therefore, there is a need for smart contract wallets to serve the entire chain.
Secondly, the infrastructure is also advancing. If you perform these functions on Ethereum, GasFee will be high, but Ethereum is now promoting scaling solutions centered around Rollup. At least on a Layer2 like Mantle, using an AA wallet is not much more expensive than using an EOA wallet. Moreover, more and more Rollup projects are designing AA wallets as a built-in feature, such as Starknet or zk-Sync, and other Rollup projects also have similar ideas. So, overall, the development of AA wallets is driven by demand, infrastructure, and narrative.
Zhimao: Personally, I think the development of AA wallets is primarily driven by user demand. There are two main considerations:
Firstly, when wallets serve as the most upstream infrastructure for ordinary users to enter the blockchain system, there are two major obstacles. The first obstacle is the relatively high complexity of managing one's own private keys and mnemonic phrases for ordinary users. The second obstacle is the source of GasFee. When you interact with any blockchain system, you will encounter GasFee. From these two points, I believe the development of AA wallets and the latest ERC4337 offer more solutions, leading to a flourishing of wallets. For account abstraction, it essentially separates the account interaction with the blockchain from the underlying authentication and verification logic, enabling use cases such as MPC sharding or having a studio's agent perform applications, such as verifying accounts through a user's Twitter, Gmail, or Discord, to eliminate the complexity of freezing and managing keys for users.
Secondly, regarding the content of GasFee, the most core creation point of ERC4337 is that it changes the lifecycle of existing transactions, providing good thread acquisition capabilities. This allows third parties, agents, or wallet projects to set flexible GasFee and authorization strategies, helping new users entering the blockchain system and enabling wallets to better manage and pay GasFee on behalf of users within the account abstraction system.
From these two points, I believe the development of AA wallets and ERC4337 is a process primarily driven by user demand.
Winson: My view on this issue is slightly different from everyone else's. I still believe that the development of ERC4437 may have been driven more by the Ethereum Foundation. In fact, the user experience that AA wallets bring has long been available, with this method requiring stable coin payments for gas as early as the early days. Using other tokens to pay GasFee, such as batch transactions, social recovery, and the benefits that AA wallets bring to C-end users, have been available for the past few years. Just like the urgent wallet that everyone is familiar with now, the method of subsidizing user GasFee was available two to three years ago. So, I don't think the development of AA wallets is primarily driven by user demand; it is more often driven by the Ethereum Foundation, especially since Vitalik is a programmer who prefers programmable products. Therefore, the promotion of AA wallets has its own vision and mission. Vitalik believes that EOA wallets cannot be programmed and will limit the development of Ethereum. To be precise, Vitalik has put in a lot of effort to promote this, including supporting many early projects. Taking the urgent wallet as an example, during the DeFi summer period, the user volume did not reach the level of millions. From the traces, it is clear that the application of smart wallets is driven by the Ethereum Foundation, and more precisely, by Vitalik, who has left a significant mark on this matter.
Zuki: I actually agree with what Mr. Winson said, because many people compare AA wallets to the iPhone moment in the cryptocurrency circle. However, I believe the birth of the iPhone was not primarily driven by user demand. Although the result benefits users, users themselves do not actually know what they want.
From the perspective of industrial construction, the push of demand comes from some products and projects needing to expand to more users. The introduction of ERC4337, which reduces user threshold awareness and costs, and even allows project parties to help users pay initial fees, enables new users to participate in Web3 applications without having to deposit funds, and also promotes the entire industry.
Yin: Through communication with Julian, the founder of Urgent, I learned that in the early days, developers were more inclined to choose EOA over AA. Due to the first-mover advantage, users were more accustomed to the EOA wallet model, and developing the old model was less expensive. Therefore, my view leans more towards the initial reliance on the Ethereum Foundation to attract more developers to this sector, and later creating new features based on user demand.
Qin Xiaofeng: What specific application scenarios do AA wallets have compared to EOA and CA accounts?
Zhimao: I think innovation in social and gaming scenarios would be quite interesting. Based on my previous point, the more flexible GasFee payment logic as a standard process is appealing. For example, in a full-chain game, you need to repeatedly sign to proceed, but with an AA wallet, the overall gaming experience would be greatly enhanced.
Cyberorange: I believe that when looking for specific application scenarios for AA wallets, it's more important to start from the perspective of application needs. Certain aspects of applications may require the involvement of AA wallets to enhance the overall application usage. For example, in flash loans, usually only developers would use this method, as ordinary users wouldn't write smart contracts. However, AA accounts can enable the activation of corresponding modules to help ordinary users participate in this method. Or in the case of full-chain games that require frequent interactions, they can also be implemented through AA wallets.
Winson: I believe AA wallets are more suitable for advanced application scenarios, such as merging multiple interactions into one, and automation. If we look at normal frequency interactions, EOA wallets are actually sufficient.
Zuki: Due to the fact that AA wallets are smart contracts, they have strong scalability in different scenarios and can provide additional functionality for many projects. For example, in a DEX where multiple interactions are required, packaging them into one transaction, while not changing the GasFee, can enhance the user experience. Additionally, there are currently unimplemented features, such as social recovery and intimate payments in traditional transactions. Also, being able to meet specific Gas requirements without paying for the network's Gas simplifies the user's browsing experience of Web3, thus attracting more users.
Andy: dappOS is currently developing in this direction. The first aspect is multi-operation aggregation, and the second is the ability to interact on different chains without needing the corresponding chain's tokens, and instead being able to pay GasFee with stablecoins or tokens from other chains. A better scenario, for example, is when large holders want to do asset management. Normally, it is not possible to directly hand over your account to a third party for management, as this carries a high risk. However, with an AA wallet, specific authorization can be given to a quant team, allowing them to manage your funds. Currently, the most advanced feature for me is the implementation of chain abstraction. Due to the different ChainIDs, a transaction can only be used once on a specific ID when signed, and cannot be replayed, which prevents liquidity aggregation. However, the current solution can treat the money in wallets on each chain as a single account, just like a centralized exchange.
Qin Xiaofeng: Which will have better development, MPC wallets or AA wallets?
Yin: In the short term, from the perspective of user experience, MPC wallets are more convenient than AA wallets, as they can ignore mnemonic phrases and achieve fragmentation. However, in the future development of wallets, MPC wallets are based on old features and may never be able to avoid attacks due to their original perspective. On the other hand, AA wallets can replace the original features through social recovery or other methods, making them more secure. Therefore, OKX Wallet gives the power to users, allowing them to freely choose between MPC+EOA or MPC+AA accounts to experience. At this stage, the decision-making power is given to users to choose for themselves.
Winson: Regarding this issue, I specifically wrote an article on it last month. I believe that Vitalik Buterin has a strong aversion to this, and I think these are two different technologies. Why can't they be combined and used where they are most suitable? In other words, in the scope of my current knowledge, I believe AA is inseparable from MPC. If AA is separated from MPC, it has fundamental flaws. The core value of MPC is solving the single point of failure of private keys, which is a very significant contribution. At the same time, AA wallets also require a private key and need to solve the single point of failure issue, such as when your private key is stolen and you are unaware, how do you achieve social recovery.
Additionally, it will be quite difficult when AA wallets introduce social recovery features. For example, if you make changes to social recovery for a wallet on one chain, how does this state synchronize with other addresses and columns? This problem has always existed. Also, how to solve the issue of high GasFee. So, I believe that MPC and AA should coexist.
Zhimao: I think MPC as a technology does not stand in opposition to AA. I believe that in the future, the two should be combined.
Cyberorange: I think if we only compare MPC wallets to AA wallets, there are still some advantages. Firstly, lower GasFee and convenient compatibility with heterogeneous chains. AA is currently focused on EVM, but it's more difficult on other chains. The role of MPC wallets is more static, but AA wallets can continuously evolve with projects. In the future, AA will become mainstream, and MPC is also an important key management method within AA wallets.
Andy: I agree with the point made by Mr. Winson earlier. The two are not opposing concepts. As a developer, I also want to explain why this is the case. The biggest problem with AA contracts is that they cannot initiate transactions on their own. Who can prove that you can control this contract and the funds within it? It needs someone to execute transactions on your behalf. So, the inevitable issue is permission control. Ultimately, the issue of private keys cannot be avoided. To prevent single point of failure, AA wallets need to introduce an MPC solution.
Qin Xiaofeng: What is the current status of the development of AA wallets?
Yin: Currently, AA wallets are not yet a hot topic, and there are no airdrop expectations. However, the OKX AA wallet recently provided a guide and user claim entry under an airdrop, allowing users to claim the airdrop from CyberConnect on the OKX wallet.
Zhimao: From the perspective of project parties, since the promotion of ERC4337, there have been many interesting solutions, such as making accounts more elegant and flexible. From a practical problem-solving perspective, projects are being developed to meet corresponding needs.
From a data perspective, since the creation of the ERC4337 standard, the entire track is still in a very new field. Project parties are still designing around the standard.
Cyberorange: AA wallets need to find a breakthrough point in user demand. After the introduction of ERC4377, some projects can reduce user usage thresholds through fiat payments. The initial focus is on the needs of large holders, new listings, and automated interactions.
Winson: AA wallets are still relatively early stage, and there are still some issues to be resolved in the development process. More EIP standards are needed for improvement. However, ERC4337 has established the basic standard, and it will take time for further improvement.
Zuki: Currently, AA smart contracts are focused on two directions: one is the application perspective, such as the wallet as an entry point, and the other is in the infrastructure field, focusing on how to lower user usage thresholds. From the perspective of wallets, project parties should consider how to combine progress in new infrastructure and turn it into a more usable and commercial model.
Qin Xiaofeng: Will Gas be an obstacle to the development of AA wallets?
Yin: Indeed, the issue of GasFee is quite troublesome, especially on the Ethereum chain, where deploying contracts is the most expensive step. This issue cannot be completely resolved in the short term. However, on chains other than Ethereum, such as L2, the user experience is still very good. For this reason, OKX will continue to optimize and explore new solutions, and at this stage, we recommend everyone to experience L2.
Zhimao: The Gas issue will exist in the short term, but in the future, it will move towards L2 or L3, and there will be no GasWAR issue. For example, with the upgrade of Ethereum, the addition of data blocks can lower GasFee on L2. More applications will develop their own dedicated chains, so the issue of Gas will not be excessively high.
Cyberorange: Using Ethereum as a scenario for AA wallets, the issue of high GasFee needs to be resolved through Ethereum upgrades. After ERC4844 comes out, using AA wallets on L2 will be no different from EOA.
Winson: This issue mainly manifests in the high cost of tokens on Ethereum, and currently, it mainly appears in the high GasFee for the initial deployment of contracts. The best solution is for project parties of AA wallet projects to subsidize to reduce user usage costs.
Qin Xiaofeng: By integrating AA wallets into existing products and open sourcing them, what role does this play in promoting the popularity of AA wallets for OKX Wallet?
Yin: Of course, we hope that OKX Wallet, as a platform with a certain user base in the industry, can drive industry-level innovation and the flourishing development of the ecosystem. We hope to play a positive role for industry developers. In the future, we will also open up APIs to make it easier for third-party developers to integrate with OKX AA wallets. We will work together from different perspectives to promote the development of smart contract accounts.
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