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ERC 4337: what this new standard will (really) change
This new Ethereum standard will make it easier to manage digital wallets. But as several experts have pointed out, the "revolution" is still a long way off.
This is one of the news stories of the last few days. After months of fine-tuning, the Ethereum teams have succeeded in getting a new standard adopted on the blockchain. It's called ERC 4337.
As soon as it was announced, the comments and articles were full of praise from all sides. For some, it's a "massive change", for others a "turning point", some have even spoken of a "revolution"! But is it really? We spoke to several experts.
But first, what are we talking about?
Ethereum is one of the main protocols in the Web3 ecosystem. Every day, thousands of developers work on improving it to make it faster, more accessible, more innovative, more secure, less expensive...
These improvements involve, among other things, the development of new standards. One of the best known is the ERC 721 standard. Introduced in 2017, it paved the way, on Ethereum, for non-fungible tokens, the famous NFTs.
Easier wallet management
The ERC 4337 standard, meanwhile, concerns a completely different subject. Its aim, as explained by the team of developers who presented it at the beginning of March, is to "facilitate the creation and management" of a digital wallet. But how? Contrary to much that has been said and written, the ERC 4337 will not allow you to do without your seed phrase (12 or 24 words to recover your account if you lose your private key) or programme wallet operations. And for good reason, "it's already been possible to do this for years with smart wallets", points out Nicolas Bacca, co-founder and head of innovation at Ledger, who cites existing solutions such as Argent.
On the other hand, these smart wallets have a major drawback in that they have "proprietary" technologies. In other words, when you use one wallet, it is not compatible with the others.
"The advantage of ERC 4337 is that it will standardise all this and enable smart wallet to be interoperable," Nicolas Bacca points out. "Today it's just a promise, we'll have to see if it works in practice", he adds.
But is there anything new with the ERC 4337?
Yes, there are a few small additions beyond the standardisation of smart wallets. For example, the ERC 4337 enables the implementation of two-factor authentication (2FA) solutions that are widely used in the Web2 world (facial recognition), by banks in particular. It will also make it possible to "sponsor" transactions in a wallet, meaning that it is possible to cover the transaction costs for a third party, in particular a user.
"One of the big problems at the moment is that if you don't have crypto in your wallet, you can't do anything. When you're used to using a wallet, it's not a problem, but for new users, it's a real headache: you have to go and buy cryptos yourself just to pay the fees for your first transaction," explains Frédéric Montagnon*, co-founder of Arianee, a company that supports brands with their NFTs projects.
An asset for businesses
The arrival of ERC 4337 will democratise the use of wallets, confirms Jérôme de Tychey, chairman of Ethereum France and founder of Cometh, a crypto gaming company that helps businesses in the world of NFTs. "This standard will clearly help companies launch crypto projects because they will be able to more easily support their customers in getting to grips with wallets. This is currently a big brake for them," he explains.
A sign that the ERC 4337 could change things, competing ecosystems have clearly understood that a comparable solution needs to be offered quickly. "This standardisation and the interoperability it offers will make Ethereum even more attractive," admits Clément Téqui, CEO of Capsule Corp Labs and co-founder of the Ternoa blockchain, which draws on the Polkadot ecosystem.
* Frédéric Montagnon is an individual shareholder in The Big Whale.
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