Account Abstraction Explodes - Over 960K New Users Embrace Easier Blockchain Access

Account abstraction exploded in 2023 and will do so in 2024

Over 960,000 new accounts created

Here’s my analysis for mass adoption with AA 🧵👇

If you enjoy the read, please RESTACK, LIKE and COMMENT on what you like to hear next. It will be super helpful

In the Q4 of 2023, adoption of ERC-4337 smart accounts saw massive growth, with over 960,000 new accounts created. This brought the total number of deployed ERC-4337 accounts to over 1.8 million, indicating the standard is gaining significant traction across the blockchain industry.

ERC-4337, proposed in 2021, introduces the concept of "account abstraction" to Ethereum. Instead of managing private keys and conducting transactions directly, users can control a smart contract account that handles authentication and interacts with dApps on their behalf.

This account abstraction model streamlines usability and enables innovative fee-handling policies like gas sponsorships.

The rapid Q4 growth signals that ERC-4337 is crossing the chasm from early adoption to mainstream integration.

Lets analyze the drivers of ERC-4337 adoption and discuss what's next for the standard.

User Behavior

Across networks like Ethereum, Polygon, Arbitrum, and Optimism, over 540,000 User Operations were executed from smart accounts in Q4. UserOps, unique to ERC-4337, are meta-transactions that bundle together to reduce fees.

The apps seeing the most smart account engagement are:

1. Grindery - a Telegram tipping bot with a token incentive program

2. FanTV - a video platform that rewards viewers

3. CyberConnect - a Web3 social network

Other novel use cases include stablecoin transfers, blockchain quests, and staking from smart accounts. Multi-UserOp bundles are also gaining traction, bundling together transactions from multiple users to further reduce fees.

Polygon Leads

Polygon currently leads other networks in monthly active ERC-4337 accounts, driven by Grindery and FanTV adoption. However, a cohort of crypto "power users" emerged in Q3, submitting 5+ UserOps per month. This demonstrates accounts are engaging deeply with blockchain apps.

The percentage of new monthly active accounts has also risen to 88%, indicating smart accounts are attracting first-time adopters. Smooth onboarding for beginners is a key advantage of account abstraction.

Paymaster Volume Up

Paymaster Volume A major innovation of ERC-4337 is Paymasters - smart contracts that govern fee payment for UserOps. In Q4, 97% of UserOps leveraged Paymasters, highlighting the demand for flexibility beyond paying fees in ETH.

Total Paymaster volume exceeded $1 million in December 2023. Major ERC-4337 infrastructure providers like Alchemy, Pimlico, Stackup, and Biconomy processed the most volume. This validates that Paymasters add value for both developers and users.

AA Future

While 2023 was a breakout year for ERC-4337 by measure of growth and innovation, smart contract accounts are still scarcely adopted compared to standard EOAs. However, by decade's end, ERC-4337 may outnumber EOAs.

2024 brings several key milestones toward mass adoption:

• A public mempool to improve UserOp processing

• More consumer dApps built on smart accounts

• Ethereum protocol upgrades like EIP-7212 for native r1 curve support

• Modular account standards via ERC-6900

• Potential consensus layer changes per RIP-7650

With leading infrastructure projects prioritizing ERC-4337 integration and major dApps building on account abstraction, 2023’s momentum will carry forward. Ultimately, ERC-4337 has unlocked UX paradigms previously impossible for onboarding mainstream crypto users.

As more developers recognize and harness its potential, account abstraction will become the norm.

---

Twitter: https://twitter.com/arndxt_xo/status/1753394335054434508