Author | Heimi, Baise Research InstituteThe Ethereum developer community continuously breaks through the boundaries of innovation to improve the user experience of decentralized applications (dApps).EIP and ERC are proposals and formal standards, respectively, aimed at improving the functionality of Ethereum networks

Author | Heimi, Baise Research Institute

The Ethereum developer community continuously breaks through the boundaries of innovation to improve the user experience of decentralized applications (dApps).

EIP and ERC are proposals and formal standards, respectively, aimed at improving the functionality of Ethereum networks.

They actually represent one of Ethereum's main functions: the ability to create and manage custom tokens using various standards.

Standards such as replaceable tokens ERC-20 and irreplaceable tokens ERC-721 and ERC-1155 have played a crucial role in the development and success of the Ethereum ecosystem, and developers have created many unique and innovative dApps through them.

Ethereum has several other standards that have helped it become a thriving ecosystem, including ERC-777 (security upgrade of ERC-20), ERC-3643 (security token standard), and so on.

But this is definitely not the end point on the path of Ethereum innovation.

In 2023, the latest and most exciting standard is ERC-4337, also known as the "smart wallet" standard or account abstraction. It aims to simplify the user experience and therefore has the potential to become a game changer for blockchain adoption by the next billion users.

In addition, three other proposals also caused waves in the first half of 2023.

ERC-4337: Opening the era of no private key

ERC-4337 aims to upgrade users' EOA accounts to 'smart accounts', enabling them to operate as smart contracts. This means that each encrypted wallet can have customizable authorization logic to meet the needs of individual users or applications.

Therefore, ERC-4337 is often referred to as the "smart wallet" standard, or also referred to as the "account abstraction".

Encrypted wallets are the entry point for anyone who wants to interact on the blockchain, and are also one of the main sources of friction that hinder large-scale adoption. Why?

The answer to this question is actually all the advantages of ERC-4337:

-Simplified access: ERC-4337 provides the possibility of using an account without storing a private key. The private key can be stored in the standard security module of the smartphone.

-Account recovery: If you lose your phone or private key, you can use the social recovery function to contact the previously specified user (multi signature) to help you restore access to your account. If you don't have trustworthy friends, you can also pay a fee to a third-party company that provides the service to help you restore your account when needed.

-Automatic trading: ERC-4337 allows automatic trading, including monthly expenditure limits, AI trading, and adjusting quality positions. These functions can make it easier for users to conduct transactions.

-No Gas Transactions: ERC-4337 supports no gas transactions, which allows dApps such as DeFi, Chain Games, and DAO to sponsor gas fees for users, making transactions easier for users. This feature also allows users to use dApp tokens to pay gas fees, which can significantly reduce the cost of using the dApp.

-Bundle transactions: Each transaction requires a signature. Through account abstraction, transactions can be bundled and sent as one, saving time and even gas costs. Similar to a shopping cart, it can complete a single transaction and package even when facing 10 markets.

-Pre approved transaction: Assuming you are casting multiple NFTs or playing a game. With a smart account, you can pre approve transactions based on pre set custom wallet codes and session keys.

ERC-4337 has many other use cases, but they all make the user's dApp experience as simple as a Web2 application. That's why ERC-4337 is often referred to by the Ethereum community as the "game changer for blockchain adoption by the next billion users".

Although its adoption is still in its early stages, the developer community is vigorously developing new products to unleash the astonishing potential of smart accounts.

ERC-6551: Making NFT a true on chain identity

The idea behind ERC-6551 is to connect NFT (ERC-721) with smart accounts and become token bound accounts (TBA) - yes, it is built on top of the ERC-4337 standard.

ERC-6551 aims to have a corresponding TBA behind each NFT, enabling NFTs to interact with applications, record transaction history, and own on chain assets (note that it does not require changes to existing ERC-721).

For example, Xiaoming obtained an NFT from a project, and then the project decided to air drop tokens for NFT holders and also released a series of POAPs for them to collect.

Scenario A - TBA not used

When Xiaoming decides to sell his NFT, the tokens and POAP related to the NFT will not be transferred to the buyer.

Scenario B - TBA used

All token receipts and POAP receipts related to NFT will be recorded in the NFT itself. When selling NFTs, buyers will also see these records, and all relevant tokens and POAPs will be transferred to the buyer. If these are missing, the value of NFT may also be greatly discounted.

The motivation behind ERC-6551 is to enhance the ability of NFT as a form of on chain identity.

Guess the use case of TBA:

-In role-playing games, characters accumulate assets based on the passage of time and the actions they take (such as digging gold)

-A car in the metaverse composed of NFTs as' components'

-A perforated pass membership card that grants access to the institution and records the history of past interactions

-Social media materials that allow users to have their own content and data

ERC-5507: Refundable token sales to reduce fraud

ERC-5507, sometimes also known as ERC-721R, is an evolution of the ERC-721 standard for NFT.

Its goal is to add a refund function for replaceable and non replaceable tokens (ERC-20, ERC-721, and ERC-1155): users have the right to refund the tokens they have purchased before the preset time has passed.

The motivation behind ERC-5507 is to help prevent RugPulls and fraud by strengthening accountability in the encryption industry, and provide greater protection for buyers. By the way, it will also make tokens that comply with this standard comply with EU regulations - products purchased online have a 14 day refund period.

Some of the key points and benefits of ERC-5507 are:

-Establish interoperability with various NFT related applications, such as portfolio browsers and markets.

-The NFT market can place a sign indicating that NFTs can still be refunded, and provide a website link for refunding NFTs.

-Decentralized Exchange (DEX) can offer token refund options.

-Better wallet confirmation dialog.

However, there are also challenges and drawbacks to using ERC-5507: increased gas costs, abuse of refund policies, and difficulties in implementation... These are currently being discussed within the Ethereum community, so it is uncertain whether this EIP will pass (currently under review).

It is worth noting that the emergence of EIP-5507 and ERC-5507 reflects the willingness of the encryption industry to address compliance and investor protection issues.

EIP-4844: Preparing for Ethereum sharding

EIP-4844 is an important Ethereum improvement proposal, which is a step before Ethereum DankSharding sharding. It aims to achieve temporary storage and retrieval of offline data through Ethereum nodes to meet the data and storage requirements of blockchain applications.

This proposal introduces blob carrying transactions (transaction formats required for sharding), which enable blobs to save more data without incurring additional costs. Blob is a data type specifically designed for L2 data transmission, and it is not permanent as the network will delete it in a few weeks.

If successfully activated, EIP-4844 is expected to reduce the transaction costs of L2roll up solutions (including Optimism and Arbitrum) by 10-100 times.

In addition to introducing blob carrying transactions, EIP-4844 will also prepare for sharding, implementing execution layer logic, validation rules, multidimensional cost markets, and other system changes required for future sharding.

EIP-4844 is expected to be implemented in the second half of 2023, but there may be delays.

summary

The above EIPs and ERCs make new use cases possible and make it easier for users to interact with dApps - especially for ERC-4337.

2023 may be a year for developers, as the entire encryption industry is looking forward to these EIPs and ERCs and hoping to see the results of their work in 2024- may this start the next bull market?

Anyway, it is worth our close attention.

Risk reminder:

According to the "Notice on Further Preventing and Dealing with the Risks of Virtual Currency Trading and Speculation" issued by the Central Bank and other departments, the content of this article is only for information sharing and does not promote or endorse any business or investment behavior. Readers are requested to strictly comply with the laws and regulations of their respective regions and not participate in any illegal financial activities.