Smart accounts are cryptocurrency accounts that leverage smart contract technology to offer greater flexibility and control over digital assets compared to traditional blockchain accounts. These accounts are the merger of traditional blockchain accounts and smart contracts, forming a somewhat automated account with increased security.

These accounts are only as good as their underlying technology, especially the standards they are built with. Previously, these standards focused on improving specific aspects of smart accounts and could only work with certain smart contracts. However, there has been a recent need for a unified approach to communication between smart accounts, regardless of the standard they use. This is where ERC-7579 comes in.

What is ERC-7579?

Source: https://erc7579.com/

ERC-7579 is a new standardized approach to building modular smart accounts. But to truly understand ERC-7579, we first need to understand modular smart accounts and their functions.

Regular crypto wallets use private keys to access funds. Smart accounts, however, take things a step further by acting like mini-programs built on the blockchain (using smart contracts) that control those funds.

This approach comes with a few advantages. Firstly, smart accounts can automate repetitive transactions, like setting up a regular buy order for your preferred crypto tokens. They also offer enhanced security measures, making it harder for hackers to steal your funds.

Smart accounts also offer extra control and flexibility over your funds. For example, you can grant access to specific dApps (decentralized applications) or services, only allowing them to interact with a certain amount of your funds.

With all these new and innovative methods of handling funds and transactions, ERC-7579 was created to address the need for a more unified approach to handling smart accounts themselves while avoiding the complexity of current standards like ERC-6900. It aims to make it easier for different types of accounts to work together without changing how they currently operate. This will make it easier for the developers to compete and develop new features that can work with multiple accounts.

Where did ERC-7579 Come From?

There are six unique modular smart accounts currently in cryptocurrency, with more in development. However, these accounts vary in design, how users interact with them, and their use requirements. As such, there is a lack of practical methods to build modules for all accounts that don’t involve big technical changes, like adding “manager” components to accounts that would act as an intermediary translating requests from modules into a format that the specific smart account system understands.

To address this, ERC-6900 was introduced in April 2023 to help define how smart accounts and their modular components interact. While this module was widely accepted, adding strict security measures made development unnecessarily complicated. Because of this, account vendors found it difficult to create unique products, thus hindering their innovation.

ERC-7579 was developed by Rhinestone, OKX, ZeroDev, and Biconomy and released in December 2023. Its role is to effectively mitigate the issues above, allowing accounts and modules to work together without obstructing their developers from trying new things. As such, developers can customize their products based on complexity and security. This will foster competition, reduce costs, and improve security.

How Does ERC-7579 Work?

ERC-7579 established a standardized method for handling account tasks. The method includes clear guidelines and modules for easy integration. It covers various execution methods, such as Single (for one task at a time), Batch (for multiple tasks executed together), and Delegatecall (for delegating tasks to other smart contracts).

The standard uses a single bytes32 argument (a fixed-size data type in blockchain technology) to encode all necessary information for the task. The first byte contains the CallType (single, batch, and delegatecall), and the ExecType flag enables executions to proceed without reverting on failure, allowing other uncorrelated executions to continue.

Additionally, including a ModeSelector and a ModePayLoad allows for specifying additional details and extra data, providing flexibility for different combinations while supporting chosen modes with minimal complexity and allowing wallets to understand and perform tasks effectively.

All in all, ERC-7579’s key focus is on the modules designed to work independently of the specific smart account system they were created for. It has established interfaces and guidelines that address security and functionality requirements, enabling accounts to determine a module’s capabilities and providing a structured format for modules to interact with accounts and vice versa.

Why Modularity Matters?

Modularity is essential for smart accounts and ERC-7579 by extension because it enables greater interoperability in the decentralized ecosystem. Smart accounts use a plug-and-play style of modularity, allowing them to be easily scaled and customized through modules. This allows smart accounts to adapt to different use cases and requirements across decentralized applications and services.

This approach also enables builders to create a module store for developers to integrate new modules into their dApps, further enhancing the flexibility and customization of smart accounts.

Regarding ERC-7579, modularity is particularly important as it aligns with the standard’s focus on user operations and account abstraction. A modular approach enables ERC-7579 to seamlessly integrate with various smart account implementations, ensuring consistent functionality across different providers. As such, decentralized applications can access various functionalities regardless of the specific smart account implementation.

Security Perks for Projects Building With ERC-7579

As stated earlier, ERC-7579 promises better security for blockchain projects by serving as a universal translator for smart accounts, so it is no surprise that ERC-7579 comes with buffed-up security perks offered by various blockchain security firms.

One of these firms is Ackee Blockchain Security, one of the industry-leading auditors trusted by top-tier organizations in Web3. They offer native auditors in ERC-7579 (auditing Rhinestone) and provide free wake scans with publicly unreleased detectors such as ERC-4337.

Spearbit is another firm providing security perks for projects built with ERC-7579. It is a distributed network of industry-leading professionals offering 50% off marketplace fees for anyone developing ERC-7579. Spearbit also has many Lead Security Researchers who have extensive experience with token standards and designing secure, extensible account systems.

Additionally, Hats Finance is known for its expertise in security auditing and tailored security solutions. With Hats Finance, all audit competitions related to account abstraction (EIP 4337, EIP 779) will receive a 50% discount on competition fees and a 2x multiplier on all incentives related to the audit competition.

Furthermore, OtterSec is a reputable organization specializing in security services for blockchain projects. The company has audited various projects like compilers, core blockchain code, layer two blockchains, infrastructure, and NFT platforms across ecosystems like Ethereum, Solana, Arbitrum, and many other EVM-compatible chains. They offer priority scheduling and referral discounts for developers building with ERC-7579.

How Does ERC-7579 Improve Modular Smart Accounts?

Smart modular accounts are adaptable, meaning features (modules) can be customized according to specific user or application requirements. With previous versions, however, modules made for one smart account would be incompatible with others, thus creating a challenging experience for developers.

To solve this issue, ERC-7579 created a unified set of interfaces for smart accounts and their modules. This ensures smooth communication and compatibility across different implementations. By adhering to these specifications, modules can easily integrate with various smart accounts, ensuring that all smart accounts can understand each other.

Additionally, ERC-7579 changed some execution and account configuration functions. The number of execution functions was reduced from 6 to 3, including the optional ERC-4337 execution function. Additionally, the number of account configuration functions has been reduced from 3 per module type to just 3, regardless of the amount of module types.

In addition, the alignment of ERC-7579 with ERC-4337 regarding account abstraction is crucial. Account abstraction refers to the shift from traditional blockchain accounts sending cryptocurrency to a more adaptable system built with smart contracts. This alignment creates a consistent user experience by allowing smart accounts to interact more effectively with various dApps regardless of the underlying technology.

What does all this mean for users? Users can enjoy having a secure and flexible wallet that can handle various functions, such as automated transactions and customized permissions, while seamlessly navigating different services.

ERC-7579 vs ERC-4337

Both ERC-7579 and ERC-4337 represent important developments in the Ethereum ecosystem. While ERC-4337 concentrates on converting conventional accounts into smart contract-based accounts to offer better control, with features like passkey authentication and free transactions, ERC-7579 introduces new functionalities and enhances protocols like ERC-4337.

These advancements aim to create a more secure, user-friendly, and efficient environment for decentralized applications and services within the Ethereum network. Additionally, ERC-7579’s alignment with ERC-4337 helps it focus on user operations and ensure seamless integration.

ERC 7579 vs ERC-6900

ERC-7579 and ERC-6900 are Ethereum standards designed to enhance blockchain functionalities, each focusing on different areas. As stated earlier, ERC-7579 aims to introduce new technical features or improvements within the Ethereum ecosystem, contributing to its overall security and efficiency.

Meanwhile, ERC-6900 is more focused on improving specific parts of Ethereum. It adds special features to make certain applications work better, making them more secure and user-friendly. The integration of protocols like ERC-7579 and ERC-6900 is a testament of the creativity in the Ethereum community, ensuring that the blockchain remains safe and user-friendly for various dApps.

Conclusion

In conclusion, ERC-7579 represents a significant step forward in establishing consistent modular smart accounts and fostering compatibility across various dApp versions. By providing clear guidelines, standardized interfaces, and a focus on module independence, ERC-7579 encourages innovation while addressing the challenges of complexity and compatibility that have hindered the development of modular smart accounts in the past. With its emphasis on flexibility and security, ERC-7579 helps create a more efficient ecosystem for smart account vendors and developers, ultimately benefiting end users and driving the advancement of cryptocurrency and blockchain technology.