Users have been complaining about onboarding to crypto for years and nearly every team in the space is working on solutions to make UX better. Legacy crypto onboarding experiences are clunky and risky. Wallets are secured by easy to lose seed phrases, every transaction needs a manual signature, transaction costs can be more expensive than the transaction itself, and one mistake can mean loss funds--not to mention customer support is pretty much non-existent. Though the troubles with onboarding seem insurmountable, huge strides are being made in the space with the invention of smart wallets. Smart wallets, powered by account abstraction, are redefining how crypto works behind the scenes and creating a more intuitive experience for all kinds of users.
Let’s break down what account abstraction is, how smart wallets work, where the technology is today, and what this means for the future of perp trading.
What is Account Abstraction?
Account abstraction (AA) allows crypto wallets to act more like programmable smart contracts and less like a traditional crypto wallet. Right now, most wallets are externally owned accounts (EOAs) and don’t have any internal programs running their actions. EOAs are simple to build but are extremely limited. Users need to manually sign every transaction, pay gas fees, and there is no recovery solutions if seed phrases are misplaced.
AA changes this dynamic by letting wallets run their own custom logic. It becomes a smart contract that can be fully controlled and can include built in features like custom security, gas fee flexibility, bundled actions, and even social recovery.
The core idea of AA is to abstract or separate the user experience from the rigid structures traditionally found in EOAs. AA was made possible by the ERC-4337 standard that allows these smart wallets to function without changing Ethereum’s base protocol. Monad, the chain Perpl is built on, has native account attraction built into its base layer meaning it will automatically support smart wallets.
Benefits of Account Abstraction
Account Abstraction has many benefits including:
- User friendly UX: Seedless account recovery, no per-tx gas fees, similar flows to EOAs
- Security enhancements: mutlisig, social recovery, application specific time-locks
- Gas flexibility: sponsored or bundled transactions
- Programmability: custom logic, conditional execution, session based permissions.
Challenges with AA & Smart Wallets
While the benefits of AA & smart wallets is undeniable and their adoption is inevitable, the change doesn’t come without a set of challenges. Some of the challenges facing smart wallets include:
- Complex security surface: Extra code adds more failure points
- DoS vectors: Complex validation flows risk denial of service and a frustrating UX
- Adoption friction: requires wallet, dApp, infra upgrades and user education
How AA & Smart Wallets Affect Perps
Trading perps is already one of the more difficult actions a user can take in the crypto landscape. However, introducing smart wallets may decrease some of the barriers that hinder perp adoption.
- Gasless entries and exists: While tx costs on Monad/ Perpl will already be fairly low, AA allows for bundled transactions or sponsored transactions--lowering the already low costs for users.
- Batched strategies: Users can combine leverage, limit orders, collateral swaps, and more into one single UserOperation
- Session access: Traders can grant time-limited app permisions for bots or automated strategies without exposing private keys
- Risk Control: Embedded guardrails (spending limits, auto collateral checks) reduce perp-specific user errors.
As account abstraction matures, we can expect interfaces where end-to-end perp execution is handled in a single click.
In Summary
In summation, account abstraction and smart wallets are the next gen interface for crypto trading. AA allows for less risk and higher reward when interacting with all kinds of crypto projects including perps. AA is built natively into the protocol layer of Perpl because we believe in its power to improve the trading experience for our users. We look forward to watching this technology develop.
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