Author: CoinW Research Institute

Abstract

With the development of applications such as DeFi, account abstraction, and AI Agents, on-chain authorization is gradually evolving from a one-time signature confirmation to a form of execution permission that can be effective for a long time and reused repeatedly. At the same time, new changes are occurring: AI Agents have begun to possess the ability to automatically request services and complete payments, for example, the x402 protocol uses the HTTP 402 status code to enable Agents to pay for resources and services instantly with stablecoins without human intervention. This means that on-chain behavior is no longer isolated transactions but a continuous automated collaboration process.

In this context, the issue of authorization is further magnified. The current methods of authorization in the Web3 system remain vague and poorly expressed, often only addressing whether assets can be used, but struggling to answer what specific actions are allowed and to what extent. ERC-8004 was proposed against this backdrop. It does not define new assets or change how transactions or payments are executed, but attempts to establish a permission model for on-chain behavior that can be understood and verified by the system, making authorization itself a describable, constrained, and manageable object.

From a broader system perspective, ERC-8004 is not in competition with account abstraction and automated payment protocols like x402, but rather represents a division of labor at different levels: x402 addresses the value exchange problem after actions occur, while ERC-8004 focuses on who is allowed to act and whether permissions are exceeded before actions take place. In scenarios involving DeFi, AI Agents, enterprises, and RWA, this structure of permissions preceding payments is expected to drive authorization from an asset level to a behavior level, providing a controllable foundation for more complex and long-term automated collaboration. Although there are still real challenges in terms of learning costs, wallet support, and user experience, ERC-8004 is not a short-term narrative tool but a fundamental standard concerning whether Web3 can support the operation of complex systems.

1. Motivation for the Proposal of ERC-8004

As on-chain infrastructure continues to evolve, the capabilities related to asset on-chain and transaction execution are continuously abstracted and strengthened. From ERC-20 and NFTs to multi-signature wallets and account abstraction (ERC-4337), the threshold for user participation in on-chain activities is constantly being lowered, and accounts themselves are becoming increasingly intelligent.

However, throughout this process, a fundamental issue has remained unsolved systematically: the authorization mechanism itself has seen little substantial evolution. In early Web3, authorization meant a one-time private key signature. Users expressed "I agree" through signatures, whether for transfers, contract calls, or approve operations, and authorization was viewed as a one-time confirmation action, with the risk boundaries entirely borne by the user.

However, the on-chain environment today has changed. In DeFi scenarios, approvals often remain valid for a long time; under automated strategies and Session Key systems, authorizations can be reused repeatedly; in models where AI Agents or Bots execute transactions, users may no longer directly participate in every operation. Authorization is evolving from a one-time confirmation to a continuously existing execution capability, more like delegating the power to do something for a period of time.

The problem is that the current Web3 infrastructure has provided almost no clear, unified constraints for this long-term authorization state. Vague permission scopes, difficult-to-revoke authorizations, and unpredictable risks have become the sources of numerous security incidents. Meanwhile, account abstraction has further amplified this contradiction: when accounts can automatically execute transactions and have Gas paid by third parties, what they can and cannot do becomes even less clear.

It is against this backdrop that ERC-8004 was proposed. It attempts to fill a long-missing gap in Web3: establishing a clear, constrained, and system-understandable permission model for authorization itself.

2. Core Content of ERC-8004

The entry point of ERC-8004 is not in asset forms or transaction execution methods, but in whether authorization can be described independently, verified independently, and continuously managed at the system level.

2.1 What Does ERC-8004 Define?

According to the definition on the Ethereum Improvement Proposals (EIP) official website: ERC-8004 is a standard protocol for discovering, selecting, and interacting with trusted autonomous agents on Ethereum. It builds a decentralized interaction infrastructure for agents that does not require prior trust through on-chain registration, reputation, and verification mechanisms.

The term autonomous agents here is not limited to AI Agents but refers to any entity that can be authorized and independently execute actions, such as contracts, automated scripts, multi-signatures, or service processes. ERC-8004 focuses on whether the executing entity has clear authorization and permission boundaries, with AI Agents being just one typical application.

From a more general perspective, ERC-8004 is not a new asset standard or account type, but a framework for on-chain permission expression and verification, used to describe under what conditions a subject is allowed to perform which actions and to verify before operations. Therefore, ERC-8004 is not concerned with "what money is" or "how transactions are executed," but rather "which actions are permitted." It does not create new assets or change existing asset properties; it simply adds a layer of clear and verifiable permission rules on top of assets and accounts.

Moreover, ERC-8004 is not a replacement for account abstraction (ERC-4337). Account abstraction focuses on how transactions are executed, while ERC-8004 addresses permission judgments before transactions occur. If account abstraction makes accounts more flexible, ERC-8004 sets clear boundaries for that flexibility.

The core of ERC-8004 lies in transforming authorization from an implicit action embedded in signatures into a permission object that can be clearly described, independently verified, and continuously managed.

2.2 Core Mechanism Framework of ERC-8004

To understand the core mechanism of ERC-8004, one can initially set aside complex technical implementations and view it as a "chain-based permission specification." In traditional authorization logic, users often make a vague decision: "I agree for you to operate my assets." As for what specific actions can be taken, how much, and for how long, the system does not further differentiate. However, under the ERC-8004 framework, a single authorization is no longer a vague consent but is broken down into a set of rules that can be clearly described and enforced by the system. This "permission specification" typically includes the following five categories of key information.

Authorized Subject (Who): Who is allowed to execute?

First, it must be clear who is granted execution permission. In ERC-8004, the authorized object is no longer limited to a fixed wallet address but can also be a contract, an automated Agent, or even a Session Key used for short-term operations. This allows authorization to adapt to more complex scenarios, such as allowing a specific strategy contract to execute operations within a limited scope or enabling an Agent to complete specific tasks without repeated signatures. Importantly, permissions are always granted to "a specific subject," rather than being vaguely relinquished.

Executable Actions (What): What operations are allowed?

Next, what actions are permitted to be executed. Traditional authorization is often all-or-nothing; once authorized, it is assumed that the contract can freely call within the permission scope. In the design of ERC-8004, authorization can be precise down to specific action types, such as only allowing swap, transfer, or certain function calls, rather than defaulting to open all possible operations. ERC-8004 answers not whether something can be used, but to what extent it can be used.

Constraints (Under what conditions): Under what conditions can it be executed?

This is the key part that distinguishes ERC-8004 from traditional authorization. In the permission specification, authorization typically comes with clear limiting conditions, such as: single or cumulative amount limits; execution frequency or count limits; only applicable to specific protocols, pools, or contract addresses, etc. These conditions are not post-monitoring rules but must be met as prerequisites before execution. If the conditions are not met, the operation itself cannot be executed.

Activation and Deactivation Rules (When): When does permission take effect, and when does it terminate?

ERC-8004 also introduces clear concepts of time and lifecycle. Authorization can be set to: (a) be valid only within a specific time period; (b) automatically expire after one use; (c) be revocable at any time. This means that authorization is no longer a long-term burden that cannot be retracted once given, but a temporarily manageable capability.

Enforcement Method (How enforced): How are the rules actually executed?

Finally, and perhaps most easily overlooked: how are these rules enforced? The core idea of ERC-8004 is to conduct permission verification before an operation occurs. If a certain action does not comply with the pre-defined permission rules, the system will directly refuse execution, rather than pursuing responsibility after the problem occurs. This is precisely the fundamental difference between ERC-8004 and traditional risk control logic.

2.3 New Capability Types Added by ERC-8004: Why Was It Not Possible Before?

On the surface, ERC-8004 merely refines authorization, but the early Ethereum authorization model was actually unable to express complex authorization logic. Traditional authorization only checks whether a certain address is allowed to operate; once authorization is granted, what can be done, how much, and when cannot be recognized by the system.

The core breakthrough of ERC-8004 lies in upgrading authorization from "identity judgment" to "behavior judgment." The system begins to determine whether an operation complies with the user's defined permission boundaries, rather than just confirming who initiated it. This inherently includes conditions such as amount, frequency, scope, and validity period in the authorization, without relying on the user to revoke or monitor manually afterward.

Once the authorization logic is structured, it possesses the capability to be composable and reusable for the first time. Multi-step, cross-protocol operations can be explicitly limited during the authorization phase, rather than left to be judged at execution time. For this reason, ERC-8004 truly opens up space for Agent scenarios. Automated programs no longer need "unlimited authorization" but are restricted to clear, verifiable behavior ranges, with out-of-bounds actions being refused execution.

What ERC-8004 adds is not simply "safer authorization," but rather the ability for authorization logic to be understood and executed by the system, which is its essential distinction from traditional authorization mechanisms.

3. Potential Application Directions of ERC-8004

ERC-8004 is not a standard designed for a specific product; it is more like a universal language for authorization capabilities. Therefore, its application value does not manifest in the explosion of a single scenario but in the common demand for the same type of capability across multiple systems as authorization becomes more complex.

DeFi: Moving from "Asset-Level Authorization" to "Behavior-Level Authorization"

In the current DeFi system, the most common method of authorization remains "one-time authorization with unlimited limits." For example, users need to approve a contract before performing a swap, borrowing, or staking, essentially handing over the overall control of their assets. This is efficient in terms of experience, but the risks are also very apparent: once a contract is upgraded, attacked, or used in a way that the user did not anticipate, the authorization itself can become a risk amplifier. The object of ERC-8004 authorization is no longer the asset but specific actions. For instance, a user can specify: I do not allow this contract to use my USDC indefinitely; rather, I allow it to complete one swap operation within 24 hours, using no more than 1,000 USDC. Although some projects have attempted to limit the scope and duration of authorizations, most are still operating independently. The value of ERC-8004 lies in standardizing behavior-level authorization, achieving reusable and composable permission management, fundamentally enhancing risk control capabilities.

AI Agent: Providing Verifiable Permission Boundaries for Automated Execution

As AI Agents gradually participate in on-chain decision-making and execution, the issue of authorization has been elevated to a new level. The value of Agents lies in their continuous operation and automatic execution, but this also means they must hold some operational permissions for a long time. Without clear permission boundaries, the so-called Agent is essentially just an automated program with complete user control, and the risks do not diminish simply because it is "intelligent." ERC-8004 provides Agents with a system-level verifiable authorization boundary. It can be specified which operations Agents are authorized to perform, the scope within which they can act, and whether there are time limits; these rules can be verified before execution rather than relying on post-monitoring. Only when permissions themselves are structured and verifiable can automated execution have a credible premise.

Collaboration with the x402 Protocol: Making Agent Behavior "Authorized and Settled"

In the Agent scenario, another key issue beyond authorization is: once behavior is permitted, how is value exchanged? Some application layer protocols are attempting to address this issue, such as the x402 protocol, which re-enables the HTTP 402 (Payment Required) status code, allowing Agents to automatically complete stablecoin payments when requesting resources or services. In this architecture, ERC-8004 and x402 occupy different levels but form a complementary relationship. ERC-8004 focuses on "who can do what, and whether they are allowed," establishing permission and trust boundaries for actions; x402 addresses "how to complete payment and settlement when actions occur." The former does not rely on the latter to operate, nor does the latter depend on ERC-8004, but in the Agent economy, both play roles at the permission layer and payment layer, respectively. This layered collaboration allows Agents to complete the entire process from permission verification to value exchange without human intervention, avoiding the complexity of mixing identity, authorization, and payment logic within the same system. As Agents become more active in scenarios such as content acquisition, data calls, and computing power services, this type of combination is expected to become a scalable infrastructure form.

Enterprise and RWA Scenarios: Permission as the Basic Expression of Compliance

In enterprise applications and RWA scenarios, the value of ERC-8004 is more reflected in compliance and interpretability. Asset management in the real world often requires clear answers to: who is authorized to perform which actions under what conditions. Compared to whether the assets themselves are on-chain, how permissions are defined and recorded is the key to entering the traditional financial system. ERC-8004 does not directly solve compliance issues, but it provides underlying support for the structured expression of permissions, making authorization inherently auditable, traceable, and verifiable. This capability may not immediately change the user experience, but it can significantly reduce the costs of integrating Web3 systems with traditional organizations.

From these potential applications, it can be seen that ERC-8004 is not a "scenario-driven" standard but a fundamental capability that naturally emerges as the complexity of authorization increases. When on-chain behavior evolves from single operations to continuously running system behaviors, a clear and verifiable way of expressing permissions is almost an unavoidable choice.

4. Challenges and Long-Term Value of ERC-8004

Real-World Challenges

First is the learning cost. Compared to a one-time authorization, ERC-8004 introduces a more refined permission description logic. Both developers and users need to re-understand the meaning of authorization within the system. This cognitive cost will take some time to be absorbed by the market. Secondly, there is the need for wallet and infrastructure support. The capabilities of ERC-8004 can only be fully realized when wallets, SDKs, and execution environments understand and cooperate with it. In the early stages, it resembles a usable but not universal capability, making it difficult to immediately achieve scale effects. Finally, there is the user experience. If complex authorizations are directly exposed to users, it will only increase the operational burden. How to transform a set of structured, machine-verifiable permission rules into an interaction method that ordinary users can intuitively understand and are willing to accept will directly determine whether ERC-8004 has the potential for large-scale implementation.

ERC-8004 Does Not Solve the Present, But the Next Stage

Because of these real-world barriers, ERC-8004 is not suitable as a short-term narrative tool. It will not immediately lead to an explosion in user scale, nor will it directly give rise to new revenue models. ERC-8004 does not attempt to make the world faster; rather, it aims to ensure that systems remain controllable, interpretable, and verifiable even after becoming complex. Its value lies not in the number of functions but in whether it reserves a sustainable evolving permission foundation for future automation, Agent collaboration, and institutional participation. In this sense, ERC-8004 is not a standard born for a specific cycle but one of the foundational capabilities that determine whether Web3 can support complex collaborative relationships.

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