You've probably heard this line many times, but weren't sure what it meant. So let's fix that.
I present to you the beginner's guide to Account Abstraction - what it is, how it works, and how it'll change crypto apps forever 🧵:
I'm not going to bore you with the technical and implementation details of Account Abstraction (that'll be a future thread).
Instead, this will be a very high-level overview of AA with practical examples of how it has improved the crypto user experience over the last few years.
Put simply, Account Abstraction is a set of frameworks and standards that turbocharge the capabilities crypto wallets (accounts).
You can think of this like taking a 1999 Honda Civic and giving it the ability to fly - it can still work as a car, but now it can do something new.
You might then ask yourself - why aren't crypto wallets made powerful by default?
The answer is - they are on some modern chains, but for traditional blockchains like Ethereum, accounts were implemented before we fully understood all their potential usecases and flaws.
On Ethereum (and many EVM chains), we predominantly have Externally Owned Accounts (EOAs).
These are simple wallets that just hold assets and initiate transactions. They're bound to a single private key and cannot be programmed to do anything complex.
We also have smart contracts - pieces of code that execute on the blockchain trustlessly.
These contracts can be programmed to do almost anything.
Wouldn't it be cool if we could add the flexibility of contracts to everyone's crypto wallets?
This is where Contract Accounts (CAs) come into play - these accounts are a core part of account abstraction.
CAs merge the limitless functionality of smart contracts into wallets (turbocharging). These wallets still hold funds, but they're no longer bound to private keys.
Previously, if you lost your private key, you lost your wallet. This is a terrible experience, especially for non crypto-natives.
With CAs, wallets can be programmed with a variety of authentication methods instead of needing traditional private key signatures.
You can authenticate with touch id, with third party providers (Google, Apple), require multiple signers, or use different signature schemes.
You can create ways to recover an account if you do lose the original private key.
There are endless ways to build account verification.
These are all great for building more secure wallets, but AA also gives wallets the ability to function in new ways.
With EOAs, all txs must be paid in the chain's native gas token and must be paid by the initiator. Additionally, only one transaction can be done at a time.
With AA:
- Transactions can be fully sponsored by a third party (commonly by apps)
- Transactions can be paid for in different tokens (pay in USDC instead of ETH)
- Transactions can be batched together, saving gas costs and allowing for token swaps without separate approvals
As you can see, AA can really change the user experience in crypto apps.
Up until recently, we were stuck with rigid structures that made crypto onboarding hard and cumbersome.
With AA, we can now create experiences that rival and surpass those from traditional Web2 apps.
It is important to note that these smart contract accounts are still fully owned and controlled by the user.
There is no third party that can access user funds - everything is still self-custodied.
So what's the current status of AA today?
On the EVM, we have proposals such as ERC-4337 and EIP-7702 that lay the groundwork for AA.
Today, many of the features I mentioned above are possible. However, there is still much work in moving existing wallets to be contract wallets.
In the future, I'll publish a long form version of this guide that includes the ins and outs of Account Abstraction.
For now, just know that AA is our key to unlocking easy, secure, and powerful experiences that can onboard the next wave of crypto users.
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A beginner's guide to Runes - the new protocol that will bring fungible tokens to Bitcoin at the halving 🧵:
To start, what are fungible tokens?
These are tokens that are not unique in nature, can be divided, and are interchangeable. They exist on other blockchains as ERC20s on EVM chains or SPL on Solana.
Examples include memecoins and governance tokens.
Historically, fungible tokens have not been possible on Bitcoin since it doesn't support smart contracts.
However, with the advent of ordinals, we saw the rise of BRC-20s, which inscribed token data in individual SATs (satoshis) and were processed by off-chain indexers.
EIP-3074 was just approved to go live in the next Ethereum hard fork.
This EIP will forever change how users interact on EVM chains, making wallet UX simpler, cheaper, and more powerful.
Here's a high level overview of EIP-3074 and how it'll change the game 🧵:
The TLDR of 3074 is that it gives EOAs (normal wallets) smart contract capabilities (like account abstraction).
This includes the ability to do single tx approvals, batch txs, wallet asset recovery, sponsored txs, and more.
Let's first talk about the issues with modern wallets.
@lightclients did a great presentation on 3074 which I will reference in this thread.
Here's a list of UX problems - they can be solved through smart contract wallets, but that would force users to migrate wallets which is bad UX and costs money.
We are now 2 days away from Ethereum's Dencun upgrade, the largest fork since the Merge.
Here's a summary of the biggest changes in Dencun and how they'll affect you 🧵:
First off, why the name "Dencun"?
Ethereum has 2 types of clients, an execution client and a consensus client. Each type has its own set of upgrade names.
On the execution side, we have the Cancun upgrade, while the client side has the Deneb upgrade.
Combined, we get Dencun.
1) EIP-4844, proto-danksharding
Sounds scary, but it's a huge step in the right direction for Ethereum scaling. This change has been in the works for 2 years, and introduces "blobs" as ways for rollups to post transaction data.
It also sets the stage for future scaling changes.
The beginner's guide to understanding Bitcoin Ordinals - what they are, how they differ from other NFTs, and why they're here to stay 🧵:
In order to understand ordinals, you first need to understand how Bitcoin works.
Bitcoin uses "unspent transaction outputs" or UTXOs to manage balances. You can think of UTXOs as batches of currency that you own.
Bitcoin transactions result in UTXOs being consumed and created.
If you own 0.5 BTC and send 0.2 to someone, you'll receive a UTXO worth 0.3 BTC and the recipient will receive a UTXO of 0.2 BTC. The txn consumes the original 0.5 BTC UTXO, which will no longer exist.
Each UTXO is made up of satoshis (sat), which is the base unit for Bitcoin.
A lot of people are wondering how @ethena_labs is able to generate a 27% yield on their "internet bond".
Is it black magic? Are they max levered? What's the catch?
To answer those questions, here's a simple explanation of where the Ethena yield comes from 🧵:
Some quick context on Ethena:
Ethena built USDe, a trust-minimized scalable stablecoin that's pegged to the US dollar. They use a combination of staked ETH and perps to maintain the peg.
Ethena also built staked USDe (sUSDe) which generates yield, similar to a traditional bond.
To understand where the 27% yield comes from, we first need to understand how USDe works.
Rather than store a bunch of dollars at a bank (like USDC) to back each token 1:1, USDe uses a combination of Ethereum collateral and perpetual contracts to maintain its peg.
Excited to launch the "Divisible NFT" standard (DN404) which aims to be a hybrid ERC20/721 token.
ERC404 took the crypto world by storm over the past few days, but it doesn't follow existing standards, is inefficient, and breaks at certain edge cases.
Here's how DN404 works 🧵:
For those that just want the code, you can find it here (with example contracts): .
Big shoutout once again to @optimizoor @0xQuit @0xjustadev @AmadiMichaels @PopPunkLLC and other devs for grinding this out with me over the weekend.github.com/Vectorized/dn4…
Reminder: this is not a project.
We released open source code that other projects can use to build hybrid tokens. We are not selling tokens or a project to anyone, so stay wary of scams.