?A major Ethereum ecosystem update was disclosed without community feedback. Account abstraction improves web3 account management, however the current roadmap is to eliminate Externally Owned Accounts (EOAs) from Ethereum.
Account abstraction simplifies web3 accounts for users. The first goal was to expand the web3 account model so that all accounts—EOAs and smart contract accounts—are handled equally. However, the Ethereum Foundation seems to prefer smart contract wallets as the default account format for users, ruling out EOAs.
During ETHDenver, Ethereum Foundation Security Fellow Yoav Weiss announced EIP-4337. The Ethereum network update adds decentralized bundlers, token fee payment, an alternative mempool, and other account abstraction features to smart contract wallets.
In September 2021, Ethereum co-founder Vitalik Buterin posted the following idea on the Ethereum message board to establish the EIP:
EIP-4337's elimination of EOAs has gone unreported. The Ethereum Foundation's EIP whitepaper claims that "totally removing any need at all for users to additionally have EOAs" is the upgrade's main goal.
“Achieve the core goal of account abstraction: allow customers to employ smart contract wallets with flexible verification logic instead of EOAs as their primary account. Eliminate EOAs for users.”
CryptoSlate contacted numerous wallet providers, but none were prepared to discuss EOA deletion due to the Ethereum Foundation's lack of a timeline. The Ethereum Foundation has yet to comment.
EOAs on Ethereum are handled by users with private keys, unlike smart contract accounts. EOAs are a user's cryptographic identity on the Ethereum blockchain, allowing them to store, transmit, and receive ETH, NFTs, and other tokens and engage with smart contracts.
Private key public addresses identify EOAs. EOAs lack code and logic, unlike smart contract accounts. It can still sign transactions to initiate transfers, deploy smart contracts, or communicate with Ethereum smart contracts.
Control is what distinguishes EOAs from smart contract accounts. A smart contract account follows the code of the smart contract, but an EOA is handled by an external entity using a private key.
EOAs are the most tested blockchain accounts. EOA accounts founded MetaMask, Ledger, Tezor, and SafePal. EOA removal would cripple such programs and necessitate massive code modifications.
While integrating new users into web3 by having them to safely record and retain a difficult private key or long seed phrase is a widely recognised problem, removing a vital component of the Ethereum ecosystem is a draconian approach.
Removing EOAs could cause many drawbacks, including loss of simplicity, increased complexity, higher transaction costs, compatibility issues, security concerns, EVM fragmentation, and even a reduction in adoption due to friction.
Not all of the above challenges are insurmountable. EOA removal will include unanticipated challenges. EOAs are fundamental to the web3 ecosystem, so removing them from Ethereum would certainly cause EVM compatibility concerns.
Smart contracts, which require more gas than EOAs due to their complicated logic, are simple to promote in a bear market. At press time, Ethereum gas costs 12 GWEI ($0.40), including the network base fee.
Since the network began, the average gas price per transaction has changed as shown below. During the 2021–2022 bull run, gas reached 305 GWEI and averaged 120 GWEI, ten times greater than presently. EOA removal would likely raise Ethereum layer-1 blockchain transaction costs. As base layer transactions become prohibitive, Ethereum scaling solutions like Polygon and dedicated industry-specific layer-2s like Immutable will be even more important to the network.
Regulatory advice changes must be considered for the other difficulties. The European Parliament passed an IoT act requiring all smart contracts to have a "death switch" and "proxy upgradeability." Article 30 states: “The implementation of smart contracts for others in the context of an agreement to make data available shall conform with the following key requirements[...] Secure termination and interruption: the smart contract shall provide internal functionalities that can reset or instruct the contract to stop or interrupt the process to avoid subsequent (unintentional) executions.
Any smart contract wallet would have to provide a mechanism that allows the developer to deactivate the account, removing the account's self-sovereignty if developed by anyone other than the account owner.
If Ethereum abandons EOAs, EVM chains must implement the same functionality or risk losing compatibility with Ethereum Mainnet. A fragmented ecosystem and incompatible dApps would result from unsynchronized implementation across various chains.
Several EVM chain-compatible projects may lose compatibility. Why eliminate EOAs? With the decision to eliminate EOAs, the Ethereum Foundation looks to have given up the possibility to develop in the EOA field. In 2022, I advised Intu, which is doing this. I was paid to advise the initiative, but my only motivation is to see Intu prosper.
This article does not promote any solution or spread Ethereum FUD. Instead, I want to promote awareness and encourage debate and coordination. The Ethereum Foundation should not remove EOAs without a public procedure. This method would verify that EOAs must be removed, the timeline, and how security, compatibility, and usability issues will be resolved before the changeover.
EOA elimination is unconfirmed. Ethereum is decentralized. Developers are influenced by the Ethereum Foundation. For ecosystem health, I think we should keep talking. I get the Ethereum Foundation. To progress toward account abstraction with our eyes open, I just want the debate to be more open. “Strong convictions, loosely held,” Paul Saffo correctly noted.