Cointime

Cointime

Download App
iOS & Android

Why the Future of Ethereum is Smart (Accounts)

From Safe by deb©hia.eth, Lukas Schor

cover-ethereumsmartaccounts

In the dynamic landscape of Ethereum, the traditional concept of digital ownership through externally owned accounts (EOAs) is revealing its limitations. As Ethereum's ecosystem grows, incorporating more complex applications and expanding through layer-2 scaling solutions, it becomes evident that our foundational tools for ownership and interaction need an overhaul.

The transition to smart accounts is not just a technical upgrade; it's a necessary evolution to make Ethereum truly accessible and secure, as also stated by Vitalik Buterin.

While the path to transition will come with its own set of challenges, the outcome will make Ethereum finally suitable for the masses.

Challenges of EOAs

EOAs are the current standard for user interactions on Ethereum. Most wallets and application are leveraging EOAs today. It’s a simple account type that is native to the Ethereum blockchain and essentially allows a private key (often represented with a secret phrase / seed phrase) to perform operations on the account.

But this simple logic also makes EOAs fundamentally limited. They lack the capability to perform complex operations or automations. Users are required to learn about private keys, gas fees, ERC-20 approvals and more technical concepts early on. This creates challenges for onboarding and overall accessibility for many user groups.

The limitation of EOAs not only undermines the user experience but also poses serious security risks. Compromised or misplaced private keys associated with EOAs can lead to irreversible losses. And there is a general lack of security features such as allow- or deny-list functionalities or transaction thresholds. Research showed that over $3.8B was lost due to crypto hacks in 2022 alone.

The full potential of digital ownership on Ethereum requires a more flexible and powerful type of account.

What are Smart Accounts?

While EOAs leverage native authentication logic from Ethereum, smart accounts are based on smart contracts which define the authentication rules. This enables smart accounts to be freely programable. This flexibility provides completely new design spaces to solve long-lasting UX and security challenges of Ethereum such as cross-chain interoperability and key management. An Ethereum standard implemented in 2023, ERC-4337, further empowered smart accounts by making them a primary account type on the Ethereum blockchain.

Benefits of Smart Accounts

The evolution from EOAs to smart accounts is similar to the leap from cell phones to smartphones, unleashing a wave on innovation, use-cases and customizations for different user needs. Smart accounts will fundamentally level up the security and UX of Ethereum with features like:

  • MultisigsWallets that are controlled not just by a single private key but leverage multiple private keys, potentially controlled by different individuals or companies
  • Seedless onboardingAllow users to onboard with a social account (Google, etc.) or email, while still being able to migrate to a more trustless setup at a later point
  • Batched transactionsCreate more seamless dapp interaction that bundles multiple onchain actions into one single transaction
  • Sponsored transactionsAllow applications or even entire chains to sponsor gas fees, massively increasing the UX of web3 interactions
  • Key rotationDetach signing key with the account, allowing to exchange the signer setup without having to migrate assets to a new account
  • AutomationReplicate known patterns of automations that are common in web2 / traditional finance such as subscriptions
  • Security mechanismsEnable onchain security features like allow- and deny-lists, blocking of interactions with malicious contracts, etc.
  • Hybrid custodyAllow accounts to be co-managed by trusted third-parties, enabling recovery or fraud prevention that give users peace-of-mind.

The tip of the iceberg: Smart Accounts unlock a range of UX and security benefits

First Slowly, Then All at Once

The shift towards smart accounts is met with several challenges, primarily due to the widespread use of EOAs and the optimization of many applications and wallets today. However, layer-2 solutions present a new opportunity to redefine the standard by prioritizing smart accounts from the outset.

In 2024 we might see the tipping point for smart account adoption, with general momentum on the builder side (mostly accelerated by ERC-4337) and entire L2’s switching to making smart accounts the default. Also, there is a lot of new catalysts on the horizon like Coinbase leveraging smart accounts, and cross-chain interoperability enabled through smart accounts.

A recent proposal to the core Ethereum protocol, EIP-3074, is creating another stepping stone. EIP-3074 can provide some smart account functionality to legacy wallets and when combined with another Ethereum protocol upgrade, EIP-5003, would allow not just migrating, but fully converting legacy wallets into smart accounts.

The combination of two upgrades to the Ethereum protocol, EIP-3074 and EIP-5003, can enable a seamless transition from existing EOAs to smart accounts.

Through the transition to smart accounts, Ethereum will become a more viable option for less technical audiences, use-cases and major enterprises building solutions on Ethereum, creating a positive flywheel for smart account adoption.

Safe’s Mission: Make every Ethereum Account a Smart Account

The core mission of Safe is to accelerate the transition to smart accounts. Through open-source technologies and ecosystem support initiatives, we promote the benefits of smart accounts and enable users and developer to take advantage of them. To date, Safe has already onboarded over $100B in digital assets to smart accounts, by over 8 million users.

A full list of the 200+ ecosystem applications can be found at ecosystem.safe.global

Comments

All Comments

Recommended for you

  • Amazon to Invest Additional $5 Billion in Anthropic

    On April 21, Amazon announced on Monday that it will invest an additional $5 billion in the artificial intelligence company Anthropic, bringing the total investment to as much as $20 billion. Anthropic develops the Claude chatbot and programming tools, and plans to invest over $100 billion in Amazon's cloud technology and chips over the next decade.

  • Three U.S. Carrier Strike Groups May Deploy Simultaneously in the Middle East

    On April 21, according to CCTV, the U.S. military is expected to deploy three carrier strike groups simultaneously in the Middle East in the coming days. Currently, the USS Lincoln strike group is stationed in the Gulf of Oman, near the Strait of Hormuz, participating in maritime blockade operations; the USS Ford strike group is located in the northern Red Sea; and the USS Bush strike group, which is taking a route around Africa, is heading north from the southeast of Africa and is expected to enter the Arabian Sea—this carrier may replace the USS Ford in its mission. In the short term, the U.S. military may have three aircraft carriers in the Middle East.

  • BTC Surpasses $76,000

    Market data shows that BTC has surpassed $76,000, currently priced at $76,039.83, with a 24-hour increase of 1.67%. The market is highly volatile, so please ensure proper risk management.

  • Trump: Bombs Will Explode if Ceasefire Agreement Expires

    On April 20, according to PBS, U.S. President Trump stated on Monday that if the ceasefire agreement with Iran expires on Tuesday, there will be a large number of bombs exploding. Trump made this remark during a call with White House reporter Liz Landers, focusing on the issue of the Iran war, while a U.S. delegation was preparing for further peace negotiations. When asked whether Iran would still participate in the talks scheduled to take place in Islamabad, Trump replied, "I don't know. I mean, they should show up. It's arranged. We'll see if they come. If they don't, that's fine too." When asked about his expectations for the negotiations, Trump stated, "Very simple, Iran absolutely cannot have nuclear weapons."

  • U.S. Vice President Vance and Delegation to Arrive in Islamabad Today

    On April 20, according to the New York Post: U.S. Vice President Vance and the American delegation will arrive in Islamabad today.

  • BitMine Increases ETH Holdings by Over 100,000, Total Holdings Exceed 4.97 Million ETH

    As of April 19, Eastern Time, BitMine's total cryptocurrency and cash holdings, including the 'Moon Landing Plan,' amount to $12.9 billion. BitMine holds 4,976,485 ETH (an increase of 101,627 ETH from last week), which represents 4.12% of the total Ethereum supply of 120.7 million ETH. Additionally, it holds 199 BTC, shares in Beast Industries worth $200 million, $107 million in Eightco Holdings (NASDAQ: ORBS), and $1.12 billion in unsecured cash. As of April 20, 2026, the total amount of staked ETH by BitMine is 3,334,637 ETH, valued at $7.7 billion based on a price of $2,301 per ETH.

  • Strategy Acquires 34,164 Bitcoins for $2.54 Billion Last Week

    On April 20, Strategy purchased 34,164 Bitcoins last week for a total of approximately $2.54 billion, at a unit price of about $74,395, achieving a 9.5% return on Bitcoin from 2026 to date. As of April 19, 2026, Strategy holds a total of 815,061 Bitcoins, valued at approximately $61.56 billion, with a unit price of about $75,527.

  • Binance Wallet to Launch 46th TGE Project OpenGradient (OPG)

    On April 20, Binance Wallet will launch the 46th exclusive TGE project OpenGradient (OPG). The subscription period is from April 21, 17:00 to 19:00 (UTC+8), and users must participate using Binance Alpha Points and meet the corresponding qualifications. According to the official announcement, OPG tokens will be available for collection and trading starting at 19:00 (UTC+8) on the same day. Additionally, 23,000,000 OPG tokens are reserved for future activities, with specific rules to be announced later.

  • CoinShares: $1.4 Billion Inflows into Digital Asset Investment Products Last Week

    On April 20, CoinShares reported that inflows into digital asset investment products reached $1.4 billion last week, marking the highest weekly inflow since January and achieving positive growth for the third consecutive week. Bitcoin saw inflows of $1.116 billion, bringing the total inflows for the year to $3.1 billion. The price of Bitcoin has surpassed the $76,000 mark, indicating a significant technical breakthrough after two months of range-bound trading. In contrast, inflows into Bitcoin short products were only $1.4 million, suggesting that while there is still hedging demand, it remains limited. Ethereum attracted $328 million in inflows, the strongest week since January, bringing its total inflows for the year to $197 million, while XRP and Solana recorded outflows of $56 million and $2.3 million, respectively.

  • Sources: Bank of Japan Unlikely to Raise Interest Rates in April Meeting

    On April 20, sources familiar with the Bank of Japan's thinking revealed that the central bank is unlikely to raise interest rates next week. The diminishing hope for a swift end to the Middle East conflict has left Japan's economic and price outlook fraught with uncertainty. Although the final decision still carries some uncertainty and will depend on the progress of peace negotiations between the U.S. and Iran, the sources indicated that the bank prefers to maintain the status quo this month to allow more time to assess the impact of the conflict. One source stated, 'Given the current level of uncertainty, the Bank of Japan may consider it feasible to hold steady this month.' Another source echoed this sentiment. A third source noted that the Bank of Japan is unlikely to raise rates, as the market has already fully priced in the possibility of no rate hike this month. These sources mentioned that even if the Bank of Japan keeps rates unchanged next week, it is likely to signal readiness to raise rates as early as June, given the escalating inflationary pressures.

Daily Must-Read

Popular Activities

RaveDAO at Terra Solis by Tomorrowland: A Female-Led Techno Night Where Web3 Culture Converges

RaveDAO at Terra Solis by Tomorrowland: A Female-Led Techno Night Where Web3 Culture Converges

April 30 - April 30
Dubai

Popular Tags

Cointime
News
Contents
RSS
Company