# Onboarding Users to Ethereum Ecosystem via Account Abstraction and EVM-L2s | Will Warren , Charles

- Channel: [Ethereum Denver](https://streameth.org/ethereum-denver)
- Date: 2024-10-09
- Duration: 22:59
- Topics: blockchain, web3, ethereum, Entertainment
- Watch: https://streameth.org/watch/yt-kcZA2XrjCyw
- YouTube: https://www.youtube.com/watch?v=kcZA2XrjCyw

## Description

Onchain fees make it hard to onboard the next wave of users to crypto, especially as the market begins to heat up. That makes multichain a key narrative for 2024 and beyond, with EVM Layer-2s offering flexible fees and cross-chain opportunities - and bringing new users to Ethereum by proxy. Also, Account Abstraction could become the default choice where users define complex governance rules enforced by the Layer-2 consensus and anchored in the Ethereum Layer-1.

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## Transcript

now we have will Warren the co-founder of zerx and matcha as well as Charles Gil the chief technology officer of ledger to chat about onboarding users to the ethereum ecosystem via account abstraction and evm al2 thank you thank you all right let's get started thank you so much for joining us Charles really uh excited to have you here uh so for those that don't know uh Ledger builds the most popular Hardware device for self- custody and crypto assets uh and actually I kind of one of the the two things that helped me on board to crypto back in 2015 or 2016 was my ledger Nano uh and so I've been a longtime user and in big time fan of Ledger for for a long time and uh I think this story is true for a lot of people a lot of people were able to onboard a crypto for the first time using a ledger Hardware wallet and a Fiat on-ramp and uh one of the important things for us as we continue to grow adoption of crypto uh is that we're able to onboard more people uh and so in the early days with Bitcoin and ethereum uh we've been able to support you know hundreds of thousands be a million or so people but in order for us to expand beyond that into Global uh you know a global scale uh we need to be able to support way way more users way more scalability uh and this has necessitated uh layer 2 networks and uh we're starting to see uh Innovations like account abstraction uh become more common uh and so yeah I would love to to hear from you Charles uh you know how how you guys have been thinking about onboarding more users uh in a multi-chain world yes sure um so in the in the last cycle what what we what we saw we really hit the limits of the blockchain scalability uh if you remember uh there was a small application called openc it's a very simple application and this application simply broke it because because of the nons scalability of eum chain so this was this was a big issue and we have the same uh issue on on bitcoin but on bitcoin you only want to do just simple transaction on ethereum you really want to execute code so we we need we need to solve the the scalability and the good news is during this past three years uh we we have seen a lot of progress uh in terms of scalability with um l2s in particular and and now we are really in a good situation where we have this scalability layers that will allow to implement plenty of new dabs and new uh use cases and one of the interesting use case that uh that is enabled by this scalability is account abstraction as you said um when when you consider Bitcoin and ethereum they are built with what we call eoa for externally own account uh this idea is very simple but very elegant you just generate a pair of keys a public key and a private key and your your public key is essentially your address and that's it you have an account um it's brilliant but when if you want to implement something more complex in terms of governance in terms of um in terms of what what you want to do with your account uh this is very limited all all the rest can be done of chain but you would like to implement this this complexity on chain and that's why like account account abstraction and l2s are can really solve this problem with a c obstruction you can Implement a wallet which with different um um spending conditions you can you can have different type of signers um and uh you can Implement recovery mechanism plenty of such feature that are really necessary for uh for users um this is this is really where where we are uh also if you think about uh onboarding new users um we really need to to to think about uh users who are not as Geeks as us let's say they don't want to uh to know about cryptography to know about what is a public key what is private key um and with a c obstruction we can create interesting experiences where uh your account can be unlocked by your pys for instance or by your by your email and there are a few interesting use case where you simply go to uh your regular website and you uh connect connect to your wallet only with your email address or with your your pys and you don't even know there is a wallet at the end this is the kind of experience that can be done and that is really really interesting yeah yeah it seems like this is also something that's becoming a lot more feasible more recently whereas I think people have been talking about account abstraction for for a number of years I think like vitalic was talking about uh you know moving uh I think he was talking about having kind of multi sigs with was one of the ideas floating around in the early days of ethereum uh kind of foregoing eoas altogether and just having multi sigs uh but it really took a number of years before these types of ideas became kind of feasible to put in front of users and for users to understand how to actually interact with them yeah and one of the thing that unlocks unlocked this possibility is really the the fact that we have scalable layers now with l2s because if you want to do that that on on eum technically this is possible but you will pay your every single transaction very very expensively so this is a problem so what really unlocks for me this type of experience is the fact that we have uh the the infrastructure we have cheap blockchain space that really unlock this this experience yeah that's exactly right yeah and I think like even an example of that is like uh nois safe so a lot of people in the ethereum space uh rely on like a nosis safe to create a a kind of multisig wallet that provides kind of controls over you know how uh different assets can be accessed or utilized but what we've seen is well it is used but it's very expensive and it's not really feasible for like an individual uh to adopt something like a Nosa safe uh and so making something like a account abstraction possible yeah is is kind of necessary to provide those benefits to like an individual versus like maybe a team or a or a company that wants to custody in a more kind of complex way yeah did you say was one of the precursor of account abstraction we we we this account abstraction word become become became really Buzzy after the ERC 4337 launched exactly one year ago here in in Denver but this idea is not is not new as you said vitalic was talking about that a long time ago no this safe is can be seen as an as the abstraction um now we are in the situation where we have this framework which is 4 through 37 and we can do plenty of things and U one of the interesting idea that that can be implemented with with account abstraction is the following you will create um an abstracted account with a spending condition and let's say you you you will be able to say um I can spend up to 100 USD a day uh and I and for there's 100 USD I can um confirm a transaction only with my smartphone using using pass keys and uh if I want to make a bigger transaction or if I want to uh interact with this specific nft with that is very valuable for me then I need to use my ledger for that this is something that you can express with account abstraction and that is really really really powerful because if you want to do that today uh you you will have several wallets uh that are not connected with with each other and you don't have a unified experience so this is this is a very powerful idea and I'm looking forward to seeing what what will be implemented and and now I feel we are a little bit in a situation where plenty of teams are working on this ID and are creating a different flavor of aant obstruction and uh it will create like fragmented experiences where um you have plenty of different implementation with different feature and with different ways to interact with them so we are really in this situation and um I I I'd like to be like two years from now where we will know which was the best standard because it will converge uh back to the most relevant experiences I think yeah it's a really good point so not not only like the user experience but another big consideration with uh account abstraction and providing users like more flexibility around uh you know how different keys can access funds another big consideration is is security and how do we present users with an experience that is seamless that kind of abstracts away some of the the technology in the back end but how do you do that in a way that kind of preserves security for end users uh and I think that's an area where your team has you know spent a lot of time thinking about it and kind of curious on your perspective on that yeah and I I I think I had plenty of discussion at atcc in Paris last year that was the beginning of U this qu around around OB section and I I had a lot of question around is it the threat for Ledger because now you don't need the we there is no seed anymore and so on and this is really a misunderstanding because um when you have when you have an abstract account you still need to secure the access to the keys so maybe you you don't want to use like a regular seed to uh as signers you can do that you can do that with pass keys and so on but it doesn't change the fact that you need to secure the credentials that allow you to interact with um with this this smart contract uh otherwise you will lose lose your money the same way you lose your money when you lose your your seed um and I think seeds remain a good way good standard because you have you have the standard you can recover on other type of wallets and so on um which is not the case with pasis for instance if you want to recover pasis uh on another device there is no standard Apple has has own standard um um um under this is another and also you have to rely on the as uh provider so this probably not something which is suitable for for everyone um so yeah this is really something that needs to be taken into consideration and at the end your abst abstracted wallet will be as secure as the governance policies that we you will Implement on it and the way you are securing the credential the secret which which could be a seed or a paskis uh on on your end so this is really something there was no magic the it's not because you have an absued wallet that it will be magically secure you still have to consider what are your spending condition what are your policies and um what are where your secret are and how do you interact with them and and another interesting thing to have in mind uh again with this P keid experience when you when you sign um a challenge with pasis you don't have the intent so because pho2 do not embed attribute in the in the in the protocol so you just sign randomly uh a challenge which is which is fine because um it's very convenient and so on but uh if you are interacting with a smart contract and you have no idea what's what you are signing so maybe you are signing the transaction you you you you wanted to sign but maybe you are simply giving away uh your wallet and uh and here it's simply not possible to implement clear signing because PH2 do not implement this intent um property yeah that's a good point I I don't know if anyone else here his experiences but I I definitely have personally where I'm interacting with some sort of like web 3 application and uh you know I see kind of like a Big Blob of text pop up and I don't it's like a hash of of a data structure explaining what's going to happen on chain but you really don't have any idea what exactly uh signing this blob might actually set off like what chain of events it can it can actually set off uh and so I know I know providing kind of visibility into what is it that you are signing and what are kind of the uh impacts of our state changes that can occur uh as a result of signing a a specific you know data structure yeah I'm curious like how you guys have been thinking about that I I know more recently with like clear sign yeah curious get your thoughts on that yeah um today we are in a situation where we are putting our secret our seeds into Hardware wallet and um which is which is a very good idea and then and then quite often we are interacting with different uh different smart contract and we are simply uh signing hashes and we pre pretend it's okay it's not it's definitely not when you when you sign a hash maybe you are giving away all your assets so this is not an acceptable situation this is really why we are working on solving this problem and we have an an internal initiative which is called clear sign all the things and the objective is really to provide to the users with all the information for him to understand what kind of transaction he is about uh to to consent and what could be the impact of this transaction and there are really two aspect there is the the first thing like really understanding what's inside uh the the input data that you about to sign and secondly there is what will be executed on the Chain which is which is even more difficult problem so for for the first problem uh we are collaborating with dabs and wallet in order to uh provide a metadata file to the device so that the device is a is able to uh pass the transaction and understand what what's inside the input data so it this metadata file will simply say the name of the method is this and the parameters are located in this offset this offset and and so on and on the device you will be able to understand that you are not like signing a hash but you are swapping U 32 usdt against 0.1 eum and this is what will be written on the device so that you can you can clearly understand what what kind of interaction you you are doing and the second thing is um is a service that is provided by a few um a few players such as Blockhead exate and and Blowfish which is really interesting is the fact that you can simulate the transaction and try to um to to to understand what will be the impact of the execution of this uh transaction and there's two things are really really important to uh to take the right decision on what what you are going to will you sign this transaction or not you will have really more insight and it's not about just signing a hash that you don't understand what what are the consequences so this is really one of the big Focus for for Ledger this year and it's not only about Ledger it's really about the whole ecosystem and we want to embed everyone with us in in this in this Venture we are working with dabs we are working with wallets with wallet connect with metam mask with f also with Hardware wallet and we really want to uh to raise the bar for security uh for for everyone it's not acceptable to sign hash signing a hash is exactly the same as signing a blank check and hoping that is going to he's going to be okay yeah all right so just I have to take the opportunity to to brag about my awesome teammates uh we we've been focused on very similar problems uh because they're they're just as important uh when users are swapping on like a decentralized exchange uh so yeah a number of years back few of my teammates Remco Leonid and and Jacob they they actually developed uh EIP 712 uh which is kind of the the ethereum standard for structuring data in a way where users can kind of see what they're signing and uh you can kind of hash it and sign it in a way that's more more transparent and yeah very much feel like it's a it's an important important piece also another another got to give another shout out to uh blow Blowfish founding team also zerox alumni and yeah super proud to see what they've been doing as well on the security side yeah and and by the way we we really took INSP inspiration from EAP 7112 because this is this is just a structural way to uh to to to provide the users with the the information to understand what what he is about to to do so we are at the beginning of this initiative now we are taking some feedback from the ecosystem uh and if you have some don't to reach out to me and uh and after that we we will try to um to to implement this and the idea is to do this on uh on eum and evm in general first but the idea is really to secure the whole ecosystem um Bitcoin is easier because the type of interaction are simpler uh but for other chain that that will be the exact same problem yeah so signing kind of user security handling you know cryptographic keys and managing accounts like that's that's one important aspect of uh allowing like multi-chain to be more accessible and and kind of onboarding new users uh there's a couple of challenges in this transition to multichain and layer 2 networks uh and yeah you know curious how how you have encountered these uh you know The Ledger team has encountered these in your own consumer products yeah the so all those things where we are solving the scalability challenges of blockchain is really good for us for the ecosystem um account abstraction is also a big progress uh in the user experience and in in what we can do with with our wallets nonetheless we are at the beginning of this with plenty of ideas plenty of standards and and um and it will create a lot of fragmentation fragmentation in the liquidity uh when you have uh hundreds of different l2s that means that the liquidity will be spread over this uh this l2s which is which is not good for for defi it's not good it makes the gii less efficient to have a fragmentation of capital and also there will be fragmentation in the user experiences because you have different l2s different account abstraction and all all of this will be different and let's think about this newcomers uh they they will be um onboarded with canstruction and then we will explain them oh now you have to bridge your asset to eum in order to to go this to go to your L2 and if you want to to go from one L2 to another you will have to to to use other Bridge again and it will be another wallet with another obstru obstructed account so it can create um um less good experience at the end which we which was exactly what we wanted to avoid so we we will go through this um this this this um this period where there is no standard there are many standards and um and at some point one standard will win I hope so and um but from now to to this moment I think there will be some uh some trouble and some uh challenges around that yeah good news is you know you do have uh you are starting to see some solutions to these fragmentation issues a couple of the things that we're building at at zerx and matcha like really kind of one of our core priorities is to eliminate the complexity of accessing tokens or liquidity regardless of where they may be located uh and ensuring that you're always going to get the best price uh so with our our zerox trading apis uh we aggregate liquidity across eight different evm blockchains over 130 liquidity sources and and our goal is to to you know really make it super simple to provide a a delightful and cohesive experience for consumers and that's also what we're looking to achieve within matcha which is our our consumer product powered by zerox trading apis and uh yeah it looks like we are at times yeah maybe one last question for you like um what what are you the most excited about uh in terms of new use case for for the future because we have this uh new layer of scalability uh new possibility with abstraction but then the question is what we will do with all this cheap blockchain space What are you excited about yeah well so I think this ultimately comes back to the question of why is any of this technology important at all like why are are all these smart people dedicating their lives to working on blockchain technology there's lots of cool stuff you can go and work on in the world why work on this and I think the answer to that is that ultimately this technology has the potential to be extremely disruptive and to democratize access to financial services on a global scale uh and so today you know a lot of your opportunity in life kind of boils down to where you happen to be born or where you're geographically located and that's not something that any of us control and so by able being able to move things like stable coins and tokenizing assets on on blockchain Rails that are globally accessible ultimately that should allow us to do something that's worthwhile uh with this technology and it's still very early on and we haven't been able to kind of global scale and have that typee of impact but that is that's our mission at zerox is to uh you know eliminate the complexity of accessing tokens and markets uh and hopefully to do that at a global scale so yeah cool pretty exciting uh I see we need to wrap up I see a couple of questions so let's take them offline just after so thank you very much for your [Applause] attention