- The standard would enable fee sponsorship, wallet privileges, and transaction batching as an alternative to EIP-3074.
Prominent Ethereum developers, including as Ansgar Dietrichs, Matt Garnett, Sam Wilson, and Vitalik Buterin, have proposed a new transaction type to improve Externally Owned Accounts (EOAs).
The current draft proposal describes the introduction of a new transaction type with features similar to those described in EIP-3074 that temporarily turns EOAs into smart contract wallets during transaction execution.
The draft proposal states that EIP-7702 would permit sponsored transactions that are funded by a different account as well as transaction batching. To allow EOAs to temporarily adopt smart contract functionalities, a contract_code field and a signature would be included in the proposed transaction type.
The main goal is to improve EOA security and usability by solving common problems such as transaction batching, transaction sponsorship, and privilege de-escalation.
The standard would also let users sign subkeys with restricted access, allowing for de-escalated rights. For instance, a wallet administrator could grant subkey holders access to specific apps, the ability to spend just ERC-20 tokens, or the ability to use a portion of their wallet balance.
As an alternative to EIP-3074
With many of the same features as the current standard EIP-3074, the draft proposal presents an alternative.
On the other hand, EIP-7702 seeks to resolve forward-compatibility problems. Opcodes, which would presumably become outdated in a “endgame account abstraction” when all users utilize smart contract wallets, are not introduced, in contrast to EIP-3074.
Endgame account abstraction, according to Buterin and co-proposers, is probably going to happen when quantum computing cracks the cryptography used in conventional Ethereum wallets or Externally Owned Accounts (EOAs).
A distinct invoker contract ecosystem from the smart contract wallet ecosystem may also be established using EIP-3074. The proposers of EIP-7702 want to prevent a split of their efforts.
Buterin pointed out that despite the possible advantages, EIP-7702 might encounter criticism akin to that of its counterpart because it depends on code trust and could result in centralization. He thinks the same obstacle challenges every idea dealing with privilege de-escalation.
The future of EIP-7702 is uncertain as it is presently in the draft stage.
Nevertheless, EIP-3074 will be a part of Ethereum’s upcoming Pectra update, which is scheduled for release in late 2024 or early 2025.
Group-access wallets, packaged and sponsored transactions, and other similar applications can be facilitated by the account abstraction features offered by another related standard, ERC-4337. In March 2023, developers implemented the standard on Ethereum.
When combined, these standards give services the ability to manage user wallets without having direct control over user money, offering a crucial substitute for totally centralized services.
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