Ethereum programmers, led by Vitalik, have decided that regular crypto users cannot handle the storage of mnemonic phrases... and have come up with an account abstraction (yes, it's also a smart contract).
The essence is that even Binance traders and grandmothers could use "Metamask" without guides, leading to mass adoption. This time for sure. The wallet's public/private key pair transforms into smart contracts, opening up a myriad of customization possibilities. This includes sending stablecoins without using ETH for gas fees, programmable spending limits like allowing no more than $1000 per week, whitelisting addresses for token transfers, and even the coveted "forgot password" button for those unable to write down 12 words on paper. You can already try it out, for example, with the Argent wallet.
Two questions: Will it be hacked like decentralized exchanges (DEXs), and will there be a backdoor for a regulator that imposes a sanctioned limit of $10k? However, the implementation of the idea will involve Ethereum maintainers, increasing the chances of security holes being addressed.
...and the name is quite strange. What's this? Abstraction? They could have at least called it "smart-accounts."
As of now, the idea has been implemented in the form of ERC-4337.
