Cointime

Download App
iOS & Android

ERC-4337 and The Possibilities of Smart Contracts

In recent times, the Ethereum blockchain has made headlines for significant upgrades. It began with the migration from a proof of work to a proof of stake consensus. Following the shift in mechanism, the chain needed validators to stake their tokens to support on-chain transactions. With its new consensus mechanism, owners of ETH could stake their tokens to support the blockchain.

However, participating in staking meant losing control over your cryptocurrencies. To resolve this issue, the web3 company announced the Shanghai update. This hard fork will enable ETH holders to unstake their tokens for the first time. Although this initiative was scheduled for March, it will likely take effect by April.

What Makes the ERC-4337 Ethereum Standard Different?

In truth, this is not the first time Ethereum has made significant modifications to its blockchain. As mentioned above, there have been several updates in the past. So, what makes this particular upgrade different?

Well, a blockchain is completing a significant upgrade to its blockchain without having to shut down operations or incur any form of downtime. In the past, every form of an update means tampering with the Ethereum Protocol. However, the ERC network has become so scalable that the developers can effect changes without making in-depth adjustments.

However, the high point is not just that web3 companies can expand the possibilities of their blockchain without having to touch its components. The major detail is what Ethereum achieved with theirs.

For those who are not aware, ERC-4337 Ethereum Standard converts regular user accounts into smart accounts. This implies that holders can do way much more than they normally could with accounts held on this blockchain. In fact, the team is taking “true ownership” to a whole new level.

For example, players will no longer be over-reliant on features like seed phrases, private keys or individual transaction approval when using third-party platforms like Metamask. Instead, they will perform more than one task, and complete multifactor authentication via code.

Before now, blockchain wallet accounts were overly segregated. Probably due to limited scalability, Ethereum had to over-compartmentalize the different aspects of transactions. There were separate sections for cryptocurrencies, cash, debit card or coupon. This process made management very difficult and only those accustomed to the technicality could use these accounts.

The ERC-4337 Ethereum standard changed the entire process. In simpler terms, there will be less complexity and people will be able to manage their accounts in one place. This process is referred to as “Account Abstraction”.

Thanks to this account extraction procedure, users can now recover lost or stolen funds. It is without a doubt that lost or stolen digital assets are the bane of DeFi. People have lost significant funds because they forgot their keyphrase or access details. With this smart contract, users can now utilize social recovery and a multisig wallet.

For the record, ERC-4337 is an Ethereum Standard, not a Token Standard. This means that it does not follow the rules that guide the development of cryptocurrencies on blockchain protocols.

Smart Contracts and the Possibilities

Before now, blockchains were very limited. For example, Bitcoin did not have any use case outside of cryptocurrency. Ethereum brought a significant amount of scalability by allowing for other use cases. This formed the foundation for further growth.

Many other blockchains followed this footprint and began expanding on the possible use cases. Chainlink, for example, developed an oracle that connected web2 to web3. This process enabled the integration of traditional tech with decentralized technology.

Zenith Chain recently migrated from the proof of stake to the proof of staked history. This process helped to improve our security architecture and efficiency.

One common ground for the cases above is that the different networks above had to change integral parts of their networks. This process can be very tasking and cause companies to pause their operations. With this initiative by Ethereum, those days will fast become a thing of the past.

Considering that firms can incorporate better features into their blockchain without tampering with the internal architecture is a very significant improvement. All they need to do is ensure that their chains are scalable and can work with smart contracts. Once they meet this requirement, they can simply develop smart contracts that can fulfil or fix specific deficiencies.

For a very long time, people have called for blockchains o improve asset recovery. Statistics show that an average of 1500 BTC is lost daily due to issues regarding digital asset safety and control. Despite the demands, nobody believed that the solution will come from smart contracts instead of actual integral chain protocols.

Closing Thoughts

The entire process goes to show the limitless potential that blockchain can achieve. Even better, these things are possible without having to alter integral structures or halt operation. Like with the proof of stake migration, it is expected that many more web3 firms will incorporate the use of smart contracts to fix existing problems. We may just be in for another paradigm shift.

Comments

All Comments

Recommended for you

  • American Bitcoin's Bitcoin reserves have increased by approximately 623 BTC in the past 7 days, bringing its current holdings to 4941 BTC.

    Emmett Gallic, a blockchain analyst who previously disclosed and analyzed the "1011 insider whale," posted on the X platform revealing updated data on the Bitcoin reserves of American Bitcoin, a crypto mining company supported by the Trump family. In the past seven days, they increased their holdings by about 623 BTC, of which approximately 80 BTC came from mining income and 542 BTC from strategic acquisitions in the open market. Currently, their total Bitcoin holdings have risen to 4,941 BTC, with a current market value of about 450 million USD.

  • The US spot Ethereum ETF saw a net outflow of $19.4 million yesterday.

    according to TraderT monitoring, the US spot Ethereum ETF had a net outflow of 19.4 million USD yesterday.

  • Listed companies, governments, ETFs, and exchanges collectively hold 5.94 million Bitcoins, representing 29.8% of the circulating supply.

    Glassnode analyzed the holdings of major types of Bitcoin holders as follows: Listed companies: about 1.07 million bitcoins, government agencies: about 620,000 bitcoins, US spot ETFs: about 1.31 million bitcoins, exchanges: about 2.94 million bitcoins. These institutions collectively hold about 5.94 million bitcoins, accounting for approximately 29.8% of the circulating supply, highlighting the trend of liquidity increasingly concentrating in institutions and custodians.

  • The Bank of Japan is reportedly planning further interest rate hikes; some officials believe the neutral interest rate will be higher than 1%.

    according to insiders, Bank of Japan officials believe that before the current rate hike cycle ends, interest rates are likely to rise above 0.75%, indicating that there may be more rate hikes after next week's increase. These insiders said that officials believe that even if rates rise to 0.75%, the Bank of Japan has not yet reached the neutral interest rate level. Some officials already consider 1% to still be below the neutral interest rate level. Insiders stated that even if the Bank of Japan updates its neutral rate estimates based on the latest data, it currently does not believe that this range will significantly narrow. Currently, the Bank of Japan's estimate for the nominal neutral interest rate range is about 1% to 2.5%. Insiders said that Bank of Japan officials also believe there may be errors in the upper and lower limits of this range itself. (Golden Ten)

  • OKX: Platform users can earn up to 4.10% annualized return by holding USDG.

    According to the official announcement, from 00:00 on December 11, 2025 to 00:00 on January 11, 2026 (UTC+8), users holding USDG in their OKX funding, trading, and lending accounts can automatically earn an annualized yield of up to 4.10% provided by the OKX platform, with the ability to withdraw or use it at any time, allowing both trading and wealth management simultaneously. Users can check their earnings anytime through the OKX APP (version 6.136.10 and above) - Assets - by clicking on USDG. Moving forward, the platform will continue to expand the application of USDG in more trading and wealth management scenarios.

  • The Federal Reserve will begin its Reserve Management Purchase (RMP) program today, purchasing $40 billion in Treasury bonds per month.

     according to the Federal Reserve Open Market Committee's decision on December 10, the Federal Reserve will start implementing the Reserve Management Purchase (RMP) program from December 12, purchasing a total of $40 billion in short-term Treasury securities in the secondary market.

  • Bitcoin treasury company Strategy's daily transaction volume has now surpassed that of payment giant Visa.

    according to market sources: the daily trading volume of Bitcoin treasury company Strategy (MSTR) has now surpassed the payment giant Visa.

  • The US spot Bitcoin ETF saw a net outflow of $78.35 million yesterday.

    according to Trader T's monitoring, the US spot Bitcoin ETF had a net outflow of $78.35 million yesterday.

  • JPMorgan Chase issues Galaxy short-term bonds on Solana network

     JPMorgan arranged and created, distributed, and settled a short-term bond on the Solana blockchain for Galaxy Digital Holdings LP, as part of efforts to enhance financial market efficiency using underlying cryptocurrency technology.

  • HSBC expects the Federal Reserve to refrain from cutting interest rates for the next two years.

    HSBC Securities predicts the Federal Reserve will maintain interest rates stable at the 3.5%-3.75% range set on Wednesday for the next two years. Previously, Federal Reserve policymakers lowered rates by 25 basis points with a split vote. The institution's U.S. economist Ryan Wang pointed out in a report on December 10 that Federal Reserve Chairman Jerome Powell was "open to the question of whether and when to further cut rates at next year's FOMC press conference." "We believe the FOMC will keep the federal funds rate target range unchanged at 3.50%-3.75% throughout 2026 and 2027, but as the economy evolves, as in the past, it is always necessary to pay close attention to the significant two-way risks facing this outlook."