Ethereum’s upcoming Pectra upgrade, scheduled for either late 2024 or early 2025, is set to introduce a range of enhanced functionalities and improved user experiences for crypto wallets. The Ethereum Improvement Proposal (EIP) 3074 has been approved for inclusion in the next update, enabling regular crypto wallets to function like smart contracts.
One of the key features of EIP-3074 is its ability to grant standard externally owned accounts (EOAs) – such as MetaMask wallets – with smart contract capabilities. This allows for transaction bundling, where users only need to sign once, and sponsored transactions, where a wallet can delegate funds for use by another party. This concept is similar to the account abstraction introduced in ERC-4337.
However, an anonymous developer known as 0xngmi raised concerns about EIP-3074 in an April 11 post, stating that it could potentially result in the complete depletion of an address with just one faulty signature, including all tokens, NFTs, and DeFi positions.
Harrison Leggio, co-founder of Gaslite, acknowledged the security concerns associated with the update but noted that people will always find a way to lose their money, citing instances where individuals willingly hand over their private keys to trading bots.
Software engineer Laurence Day highlighted the sponsored transaction capability of EIP-3074 as its most useful application. This feature allows users to store assets in a wallet that doesn’t hold Ether and sponsor the gas required for transactions from a contract controlling the wallet.
Other planned functionalities of EIP-3074 include a social recovery feature that eliminates the need for the traditional 12-to-24-word seed phrase.
Anonymous Web3 adviser Cygaar explained that EIP-3074 transforms wallets into smart contracts by introducing two new operating instructions – AUTH and AUTHCALL. AUTH verifies signatures and actions, while AUTHCALL calls the target contract(s) with the originator address as the caller instead of the message sender.
The forthcoming Pectra update follows the recent implementation of the Dencun update by Ethereum developers, which successfully reduced the fees for layer-2 transactions.
Additionally, Ethereum co-founder Vitalik Buterin outlined the next steps for the “Purge” in early April. This process aims to remove old and unnecessary network history to simplify the Ethereum network.
In conclusion, Ethereum’s Pectra upgrade, accompanied by the adoption of EIP-3074, brings about various advancements for crypto wallets and improves user experiences.