January Digest: Highlights of Account Abstraction Narrative
One key element contributing to the growth and efficiency of defi is Account Abstraction. This concept enables users to interact with decentralized applications without the need for blockchain complexities, like signing multiple transactions and complicated gas fees. After DeCommas’ shifting focus on Account Abstraction we want to share the latest news regarding the utilization of this technology and web3 updates with you. In this monthly digest, we’ll review the most important updates for the 4337-mafia fans in January:
- Account Abstraction Data Overview
- Vitalik’s Meeting with L2 Leaders
- AltLayer’s Airdrop
- Governance Abstraction: A New Frontier
- On-Chain Crypto Users’ Record Growth
Account Abstraction Data Overview
Firstly, let’s take a look at some numbers generated by Account Abstraction users.
Dune stats by @niftytable for Monthly Active ERC-4337 Smart Account
As we can see, in January, we had a record of monthly active smart accounts, surpassing December for almost 100.000 more smart accounts.To be in the category of active smart accounts, smart accounts should perform at least one transaction within a month. Explaining it a bit more: smart accounts are independent smart contracts that can initiate and execute transactions without the need for an EOA(Externally Owned Accounts).
Smart accounts can be created thanks to the Account Abstraction technology within different networks, like Ethereum, Arbitrum or Polygon. The biggest network provider of smart accounts still remains Polygon, with 500k+ smart accounts active in January with no signs of slowing down. Among the most popular dApps by smart account calls on Polygon are Grindery (a self-custodial EVM Smart Wallet for Telegram) and FanTV (a decentralized Video Streaming Platform), providing leading numbers to Polygon network overall.
Dune stats by @niftytable for Monthly Successful UserOps
Another important indicator for Account Abstraction adoption is UserOps (User Operations). User operations are similar to transaction details used by a smart contract account, showing different actions held by users within smart accounts, like transactions completed or smart accounts created, just like the web3 portfolio. UserOps allow Account Abstraction to function without needing changes to the Ethereum or layer 2 blockchains that support ERC-4337.
Compared to its all-time high in October 2023, we still see a dropdown by half, but the rebound from the previous month is promising, setting the table for a larger number during 2024. It’s worth mentioning that DeCommas API has developed UserOps endpoints, by implementing these endpoints in applications, you can easily build an advanced Portfolio feature to track user operations. You can read the detailed tutorial on how to use them here: Tutorial: Building a Feature to Track UserOps using DeCommas API.
Considering these stats, it’s fair to say that the Account Abstraction narrative is starting to gain momentum in the beginning of 2024. Now, let’s shed light on more details of what has already happened in the first month of this year related to the Account Abstraction narrative.
Vitalik’s Meeting with L2 Leaders
It is not a surprise that with the growth of account abstraction adoption, leading crypto personalities are in the race to speed up the adoption of Account Abstraction. One vital component of growth is discussions among big companies and their contributors.
One such example was Ethereum co-founder Vitalik Buterin’s involvement in discussions with zkSync, Starknet, Polygon, Linea, and Scroll, further emphasizing the commitment to scalability and innovation within the Ethereum ecosystem.
Vitalik’s Meeting with L2 Leaders
We watched it for you and here are the main bullet points from this discussion:
- Decentralization of Sequencers on L2 — L2 will be even more decentralized in 2024. TThe sequencer is like a manager that groups L2 transactions together in batches. The problem right now on L2 is that almost all L2 networks use the one and only sequencer run by the core teams themselves.
- New applications with Account Abstraction and 4844 Ethereum upgrade, EIP 4844 introduces a new transaction format for so-called “blob-carrying transactions”, a new transaction format which has the potential to significantly reduce L2 fees.
- Users will get much better UX with apps built on top of Account Abstraction, like wallets, gaming and terminals, allowing developers to use the usual design in building their applications.
- Transaction cost will be cheaper for both developers and users with Account Abstraction and 4844 upgrade.
- zkSync and Starware announced they’re working on implementing Face ID as part of Account Abstraction utilization in their projects.
The full meeting can be watched here: Scaling Ethereum with Vitalik Buterin and L2 Leaders.
With the increasing adoption, more and more new big AA-related products are incoming, like wallets (Ambire, Argent, Safe) and gaming (Cryptomaze, Tevaera), adding both tech value and $ value. AltLayer made waves in January with its impressive airdrop, distributing a staggering $103 million worth of tokens to Ethereum users.
AltLayer is utilizing Account Abstraction technology along with Biconomy Modular SDK, which provides users with social login, smart account creation, and recovery options. This is one of the directions AltLayer is moving into to bring more benefits to its users, considering the Account Abstraction narrative as an important component in their project.
ALT token Airdrop aimed to enhance the Ethereum network’s scalability, addressing concerns about congestion and high gas fees. The airdrop was not only a strategic move by AltLayer but also a testament to the community-driven nature of the blockchain space. The significance of such initiatives is that one of the most significant drops in crypto still considers Account Abstraction a necessary technology. Therefore, Account Abstraction did not pass by big drops in the web3 landscape, either. To read more about their drop, click here: AltLayer Airdrop Puts $100 Million Into the Wallets of Ethereum Users.
Dagon — Governance Abstraction: A New Frontier
A notable development in January is the introduction of Dagon or Governance Abstraction, a new fundamental element of this new tech that allows any account to become a group account instantly. This concept, similar to Account Abstraction but applied to governance, has the potential to revolutionize the decision-making processes within decentralized communities.
Governance 🤝 Abstraction
How? Smart contracts allow users to program how they interact with blockchains, such as splitting custody risk by granting other accounts the right to approve sending tokens or other digital transactions from a shared address. So we’re already satisfied with so-called “multisig accounts” that allow us to send transactions approved by multiple instances at a certain threshold, for example, you may send tokens or vote for something with multisig as 2 of 3 owners of signatures signed a transaction.
With Dagon, we can create new types of multisig accounts with specific voting rights. Think of Dagon as a new type of multisig option. You can create a token and give a set of signers equal weight to do a multisig or coop for off-chain or on-chain voting. You may even create shareholder governance like a huge corporation or rule programming of RWA (Real World Assets) tokenization processes but on-chain.
This new approach could enhance the efficiency and inclusivity of governance structures, paving the way for more democratic and transparent decision-making in the web3 space. Read this thread by ross for more details: Think AA but for governance (“dao gone”).
On-Chain Crypto Users’ Record Growth
The Account Abstraction narrative is gaining momentum, and the crypto market as a whole is also getting more traction. “The Onchain Crypto User Report” highlights a record growth of 62 million on-chain crypto users in 2023 underscores blockchain technology’s increasing adoption and acceptance. It was caused by a continuous growth of the main chains during the last year.
“The Onchain Crypto User Report” by flipside
The reasons crypto L1 growth is increasing as one of the elements and continuous upgrade ideas in the web3, such as:
- L2 solutions adoption and new releases, like Base and Linea, reducing cost of interactions
- Airdrop meta — more users will share benefits, distributed by projects
- Return of L1 like Solana with new apps, such as Sanctum, Parcl, Phoenix, Code and Grass
- New social apps utilization like lens.protocol and Friend.tech by newcomers, who just appeared on the market
- Utilization of crypto by web2 companies like Paypal with their new stable PYUSD
- AA utilization start
We expect the adoption level to continue its growth when Account Abstraction goes live at full power with AA utilized wallets, apps, and the trading terminal, as we are currently building. Share your ideas on our Discord. For more information about crypto users’ growth check this article by The Defiant: Onchain Crypto Users Grew By Record 62M in 2023: Report.
This is it for now! Subscribe to DeCommas Medium and let us know whether you like the new format and let’s hope for an even more dynamic February!