EIP-7702 Revolutionizing Payments and UX

Transcript

Hi, I'm Noah. Uh, and I'm here today to talk about EIP7702 and um the the big changes that are coming to payments in UX. Uh, so a little about me. Uh, I'm the CTO at DFNS. We're a world as a service infrastructure company. Um, I bought my first bitcoins back in the day off Mount Gaus. I quickly moved them out. I didn't trust Mount Gaus at all. um had a milk crate miner uh mined mined back in 2014. Um I was at Gemini for about seven years. I bought my first Ether there and uh I've I've been sold on crypto um since the beginning. And crypto usability is my my real passion. Uh and uh you know this is why I'm here today

talking. Uh also I love to run and cycle. I've been cycling around con for the past two days. I'll be at the running events. So, if you see me on a bike or running, come say hi. Um, and I recently got a cat. So, I've got little Steve here pictured um next to my dog, Lily. Uh, about defense, we're walled as a service infrastructure company. Um, we power other companies like Bridge, Iron, doing payments in the space. Um, we also power uh providers like Zodia. So, a lot of what we do is trying to make crypto easy to use, easy like rails to to move things around.

Um, so why do payments still feel like they're in 2013? Uh, you know, if anybody's ever seen these two screens from MetaMask, um, you you probably understand the pain. You're don't have enough ETH for the transaction. You need to go buy some more ETH to to pay for the gas. Um, or fees are spiking on the network. It's it's just very difficult to use. Uh, you know, as a payment provider still having to move gas into a deposit address. um or deploy a smart contract on chain to sweep funds. It's just a really painful experience. So this is a big reason why I think EIP is 7702. Um it's just pretty amazing technology and it was really excited to

see uh this move forward. Um you know the other thing we we see about 50% user drop off uh when people are prompted with uh a gas prompt. It's difficult for a lot of people to understand. Uh, you know, I like to use my my my dad as an example here. He's in his late 60s. I love him, but he doesn't understand crypto. Um, if I told him that he had to go buy Wells Fargo stock to move USD out of his Wells Fargo account, it would just blow his mind. He he wouldn't use it. It would just be an unusable platform for him.

Uh, so want to talk talk about the landscape here. Uh, ERC 4337 came out. It was a big step forward in usability, great protocol-wise. um you know the user op being able to build this out on chain was great uh but it was still difficult to use high fees to play on chain still need to manage gas um launched in May probably the biggest change in in Ethereum in a very long time um in the core underlying protocol and now we're seeing EIP72 use cases pop up um and I think it's going to be the default moving forward saves on gas saves on fees on chain um and just really simplifies as the whole onchain experience.

So what what does 7702 unlock for payments? So one native batching uh you know I think unis swap is the classic example. You need to go in you need to approve your USDC uh first and then you can go in and do your unis swap um swaps. Uh very very painful user experience to have to broadcast two transactions on chain. you know, we can start bundling these things together. And you can even think of uh, you know, higher value transactions where it's not just two operations. Maybe you need to do three, four, five. You can bundle all these together. You can do one signature from the end user. So the end user is only signing once and they're broadcasting all these things on chain.

Um, you know, merchant funded gas. So if you're the merchant, you can pay the gas transaction fee for your customer. Really simplifying the experience for them. They don't need to hold gas. um you know metat transactions without deploying a contract. It's nice to use what's already on chain, not having to deploy anything. Um and the best part is this all works today on mainet. Um so I'm going to do my favorite thing here. Going to switch to a demo real quick. So going to use DFNS. Uh gonna use a fee sponsor and you know I I think this should all all work. So, I'm on my defense dashboard here and um in my settings, what I've done is

I've set up a fee sponsorship entity. So, on my fee sponsor, I've just got this main fee sponsor. It's got 01 ETH in it, enough for what we want to do today. And then I'm going to go to my wallets. I've got this gasless EOA. I've already funded it. It's got 100 USDC in it. And I'm I'm going to move the funds to this uh this other EOA that I've created. So, I've got my fee sponsor wallet. This is 1.01 ETH. And then this this guy's got um about 100 USDC. So, I'm just going to pop in. I'm going to hit send. So, I'm going to put in that that address and then I'm going to send all my USDC.

And now I'm going to select a uh fee sponsor. So here. And this this wallet, no Ethereum in it. I'm going to hit transfer. And I've got my pass key here and um one password. So I'm just going to authorize that. And now this is going to be uh um constructed, signed, and broadcasted on chain. And if I just do a little refresh here, I can see this has been broadcasted. Um and I can look here's an old transaction that I previously did. Uh, but this is pretty straightforward. We've got the fee

sponsor who's calling my address. My address is is now a smart contract. Um, and it's transferring the USDC. It's very seamless, very easy to use, and and no gas had to go to the to the main wallet. Uh, this is probably the biggest hurdle that we run into uh with our customers. It happens all the time. People just hate doing gas. They always want a good solution and and we finally have it. So, just to sort of talk through what's been happening under the hood here. Um, first we check if uh the wallet smart contract enabled. If it isn't, then we're going to switch it to our smart account. Um, if it's got something else, we're we're just going to end the transaction. Then we go through, we construct the transaction.

Uh, we sign it. Uh, if it's going to be a 772 transaction, turning it into a smart contract. um we're going to uh send the new op code out uh for the um transaction type four, otherwise just a standard type two transaction and then we broadcast it on chain. Simple as that. So what's coming next? I think this is probably the the most important part. You know, we're here at SEC. I think this is like a very builder centric conference and I think we can all see what people are building towards and this is what defense is building towards and I think uh a lot of the people in the space so fee invisible commerce if you're a merchant you know if you pay the fee for the customer to send uh the transaction to you then you know it it

simplifies the the customer interaction every process in the value chain um is is much better transaction uh success rate can go up significantly no more managing ing gas fees. Your customer doesn't need to care about like, oh, you know, CryptoKitties, are they launching a new NFT? Is is the chain clogged? Uh checkout time can go down and then that onboarding time, you know, that the customer doesn't need to go to an exchange and buy Ethereum. They don't need to buy gas. It it's just already there for them. Um you know when we look to uh you know o open questions here you know the incentive economics for pay masters you know what we can do there. I

think you know with the bundling of transactions we can make it easy to to pay uh like onchain. You could think of maybe hey I'll I'll send one USDC to this pay master. Also send um you know the the rest of the funds out to where they need to go. Uh making it a lot easier to to go on chain. I think the the regulatory view of abstracted fees is is a huge huge um uh win here with EIP702. One issue that that we run into quite a bit. If you want to pay for the gas for a transaction for somebody, if you send them Ethereum, you now fall into a big regulatory landscape. You might need to be licensed in the US under 50 states under 50

different money transmitter licenses. Um, in Europe, you may need to get other like Mika licensing. Uh, it's just a a very painful experience when all you want to do is receive funds from somebody or or move funds around on chain. So, being able to to swatch the transaction and pay for it without having to actually send ETH to somebody uh is great. Um, you know, I think when we look at other EIPs, um, and kind of what's coming next, you know, with with defense, we want to like integrate 4 through37 have other options for the smart accounts that you can integrate with. Um, but then the the standardization across wallet providers providing uh, you know, EIP uh, 5792, you know, this is really, I think, where

being able to send user ops for signing to a wallet is is going to be huge. So standardizing on on user operations, being able to send those out on chain, um, and and having every wallet provider be able to kind of seamlessly offer this, it's really going to change like how payments are done. Um, how how UX is done. So next steps, well, first go try defense. Um, here's a link. Uh, you know, anybody can get started today. Um, you know, we've got our open source smart account. So this is uh our our 7702 account. It's not 4 through37. Um we made just a very simple onchain contract uh you know only for um you know payments on our platform but you

know we want contributions. We want the community to to get involved. Um and then also you know we want to start working with 4337 contracts and being able to deploy those out. Um and then of course you know come talk to me after the talk. Come connect with me on LinkedIn. Um, find my GitHub, find my Telegram. Always happy to chat. And that's it. [Applause] Thank you. Um just to be sure to have unders to have understood correctly essentially you're using um ERC 4337

as an infrastructure to uh enable the EOAS externally own account to use EIP72. you have your own smart accounts infrastructure and you need this to to use a new EIP7702 sort of. Yeah. So, what we have today uh at Defense is not 4337 compliant. It's a little different. Um we built it just to meet like the the the current needs that we see from our customers. Um what we want to do though is start adding more functionality. You know, definitely want to add the different kind of variants of 4337, the different signature compatibilities too. Uh so today it's very like specific. It's also a much

simpler contract. 4337 gets pretty complicated and um the audits can get pretty intensive. So you know just trying to keep it simple. Um but also you know looking to see what other people are going to deploy on chain. I know a lot of people are working through 7702 today. You know I think we saw um Nosis um uh unis swap um just a bunch of others with like onchain contract. Yeah. Thank you. Maybe one more quickly. Sorry. Sure. Um, how do you uh link your MPC configuration with that? How do how is it complimementaryary? That's a good question. Um, so at Defense, we love MPC. Uh, but we we've taken kind of a different approach. Um, the user

credential uh is separate from the key management. So, we securely manage the the key infrastructure for our customers. And then when you register on defense and and you might have seen me do it when I was um sending that transaction out I was using web an. So in web an uh public private key pair you register that public key with defense and then internally on infrastructure that's like that authorization to you know that wallet to this organization that I'm in. So so with that you know user onboarding it's very simple you know you can onboard offboard users. There's no key material kind of leaking out into the wild. It's it's all kind of in the back end. And then you know we do what we do best you know we securely manage that key material.

Thank you very much. All right. Thanks everyone.