Lukas Schor - Unlocking Ownership: The Path to an Invisible Web3 through Account Abstraction

Transcript

um maybe first so I know a little bit uh how much into detail I should go who knows about the count abstraction okay the ones that don't raise the hand uh weren't paying attention with Evo's talk um who's uh who knows about safe roughly uh who uses safe here half cool um so I keep it U very very uh short on like the introductions and then go more about the forward looking what what excites me about the c section um so quickly shortly what are uh smart accounts which is really what we should be talking about when we talk

about account OB setion as Evo also rightfully said like smart accounts have been around for for a long time the this like ESC 457 is like one critical component that will uh yeah hopefully help with adoption but it's it's something that's much bigger than this one standard uh so yeah we've got these two user accounts one is EAS it's like this private key this seat phrase that you know from a metamask account and the other one is a smart account and the key difference there is that they're not they don't have like this hardcoded control uh that are being controlled by private key uh through ecsa signatures but they are controlled through code and that makes Smart accounts powerful because that makes them programmable so

you can program new features new security implementations in there and it just makes them more flexible to evolve as also the etherum and yeah wi digital ecosystem are emerging and yeah that's that's the reason why you don't do PDF slides because there was like a fancy uh animation there of like a ethereum logo but um anyways um so yeah like one of the things that is enabled for that is that you don't have this one key that controls your wallet but you actually can have multiple Keys as a multi signature wallet with with spart account and also these can be reprogrammed so you might suspect that

one of the keys might be compromised and uh if that happens with a regular EA wallet you would have to migrate all your assets to new account uh because you would not know if that the key was compromised somewhere but with a smart account you could just rotate keys and uh make sure that the new key that you then set is uh properly generated um and also something that uh actually Evo tweeted yesterday a little bit about this uh hype that was coming up last year around the C abstraction with VC 457 and it was maybe a little bit too much of a hype uh to some extent it was important to get the ball rolling we now got a bunch of projects working on a counter obstruction tooling um we've got

like entire conferences have entire tracks about the coun obstruction that's really important to get this forward but there is going to be this phase now where we have to uh look back and see okay this maybe is going a bit slower than we expected um there's a lot more challenges on the way than we maybe originally expected and all the the fancy things we talked about from like uh yeah session keys and and uh sponsor transactions and social recovery and all these things they will uh they're not they're definitely non trivial and they will take quite some some work um yeah this talk also should go a little bit into what actually makes me excited and what makes me confident that we will go through this uh Valley of uh

disillusionment and how we get to this uh flut of productivity over time um so quickly about safe this is some slides someone and the team put together it's more like logo dropping but it's uh it it serves the purpose of showing that safe is quite flexibly used today uh that ranges from Dow treasuries that run ons safe like like avow uh or men Capital funds like uh one CES that um yeah use use it to to sort additional assets but it's also individuals like vitalic Puttin himself to like usually High Networth individuals people that use like high Security Solutions that you save today but it's also used quite a lot as a infrastructure for different

tooling uh and different solutions such as worldcoin so the proof of personhood protocol they actually use safe as a user account and um yeah every World Quin user is a safe user although most of them probably don't know similarly yeah nois pay and Copo are also built on safe um as user accounts yeah this just a little bit the size of adoption uh like $124 billion in assets are currently secured through uh through safe that's bigger than Robin Hood bigger than all of defi obviously this is comparing Apple to oranges but it's still shows a bit the the magnitude um but what is safe actually it's on the

one hand the the lowest level it's a protocol it's the safe smart account um which has been uh originally created like 5 years ago uh and some iterations over time uh and this really brings the the functionalities of of smart accounts uh but then to make this more accessible to users and developers safe also is building some open source Solutions on top of that so on the one side that's an API and sdks that just allow developers to more easily use that safe smart account uh and also built on that as well there's safe wallet which is a reference implementation uh sort of like a showcase what the protocol can do uh

but for end users so surfacing some some of the functionality and uh hopefully also triggering imagination of developers what can be done with safe smar cones uh but what we're really after is creating an ecosystem so not actually owning the end user relationship um to some extent safe for serves that purpose just to as said like spark a little bit the creativity and and showcase what different user groups can benefit from safe but in the long run uh we really want to focus on supporting all the builders that leverage a safe smart account and uh optimize for different use cases and user groups as there will never be one wallet or one asset management solution that

serves all the the needs of every user group but there need to be specialized Solutions out there as they emerge yeah so the base functionality which most people know about safe is the multi signature feature um that's like you can set multiple private keys and the threshold and say like two out of three of these private Keys need to sign in order to trigger transactions but very much safe is uh or multisig is like the tip of that Iceberg it's it's really about enabling all the different functionalities that smart accounts can enable from uh like new signature schemes from implementing roles and hierarchies uh transaction batching allow deny lists all that cool

stuff and that's enabled through the modular architecture of safe uh so safe is not a monolithic account it's actually something that can be extended by Developers for parties uh and Implement new features over time uh just two uh key ones that uh safe enables is modules modules uh so you might have your primary Keys the controller count and modules byass that that key logic and can have additional ways how the account is being controlled this can be automations it can be uh yeah different roles or permissions you give to another key another person uh but but it could also enable things like recovery systems and then we got guards guards

work a bit differently they add additional U like validation Logic on the transaction uh so as you create a transaction it uh needs to comply with the the checks implemented by a safeguard and these can be things like U allow or deny list where you check on the transaction are am I interacting with a certain protocol uh that I might not want to interact with um actually cool things that people should be building is ways that I as a user can say I want to have uh all Protocols are interact with being audited and there's actually a standard out there that allows to bring audits on chain and then you could build something that actually would check on chain if a

protocol was audited and if if it was not then reever a transaction uh and if if it was then it goes through um yeah and then things that uh will be exciting and where we probably see uh more production uh production ready Solutions this year around onboarding um so I mean one one of the key challenges of of crypto still today is that you might have applications people want to use but then you need to tell them you need to download the wallet and they download the wallet and then they they're faced with the seat phrase and uh you need to explain them pretty much all the things uh about how to securely manage private keys and

that's quite quite some rabit hole um so that people understand how to back up their seat phrase in a way that they can still access it in 5 years but no one else in the meantime um and some things people have been experimenting around this social login uh so actually using your Google account or your Apple Cloud account to to log in to um to decentralized applications and generate a private key that's based on that usually through NPC technology so it's not unique to Smart accounts necessarily because you could do social login without Smart accounts uh but you would want to use Smart accounts because you it might be a feasible solution to onboard but over time as people store

more assets probably it's not the best thing to rely on these Solutions and then you need a a viable migration path and that cannot be that you just move everything to a new account um but actually uh that you some somehow reconfigure your account so the solution would be that you use a Smart account that's controlled through an NPC signer uh that allows for social login and as people might may require more security security they can then add another signer as a multi signature scheme or they do a quick key rotation and switch to a hardware wallet or something um yeah it was interesting to see these Solutions emerge but I think what will really uh be properly uh of achieving this this onboarding challenges is pass

Keys uh as this is literally uh like everyone that has a smartphone will have the ability to generate pass keys and it's a standard to this private Keys that's pushed by by big players like apple and and Google and they want to get rid of passwords themselves so they really want to have everyone use pass Keys going forward um yeah and all the devices will support it maybe not the Apple TV but at least all the phones and and laptops out there um there's still some challenges to Le pass Keys also when it comes to uh blind signing as you uh yeah we kind of told people like over years you should really look what you sign with uh with your wallets and now we we move to pass keys and they

literally at least so far don't really show what you you sign uh but it's uh from a pure key distribution perspective and a key generation perspective I think where uh onboarding for crypto is heading towards and and this really requires smart accounts because EAS don't support uh or like pass Keys is a is is a private key format that's U not natively supported by at least eum blockchain and you need smart accounts to enable the signature schemes there recovery uh it's a rapid ho itself because there's so many possible recovery schemes that could be implemented a lot of people always say or associate smart accounts with social

recovery so you have an account you might have some primary keys that you control but then you want to have uh your friends and family have like a backup uh method to recover your your account um you've seen this four years ago already with archant doing something similar uh still hasn't properly picked up um remains to be seen if if it will be in the future but I think what's going to be exciting also if we have more optionality for users to Define uh how they want to recover their accounts because it's it's important even though you might have solved the the private key generation problem with with pass keys and people can actually hold their uh private keys on their own devices still there are circumstances where

people wants to uh recover their account uh even worst case scenario in like an inheritance case there needs to be solutions that also address this and um yeah what's going to be exciting not sure if everyone will be wanting that but at least uh in my view a lot of people that uh will on board to web 3 will probably go for one of those Solutions is uh using institutional recover such as a like a a trusted entity like a like a bank or just the means that onboards them to crypto in the first place a centralized exchange which already they trust they already have some identification with um

so they could use that as a as a recovery system and so actually snom U license bank here in Switzerland uh has implemented interesting feature for smart accounts where they uh you can bring your smart account they do kyc they the you activate them as a recover and then when you lose your keys you just go back and say hey Signum recover my account and um you need to go through kyc again and then they change your uh reconfigure your account what's cool here is that there are some protections against Signum just going rogue and and running away with all your money uh both in that they can only rotate certain

keys on your account uh that's a protection that they cannot trigger just a transfer on on the account uh and the other one is a time delay so we can set the time lock in which uh the recovery needs to be triggered and afterwards it gets executed and in that time lock you can always uh veto that from your primary Keys um something that maybe is a little bit less known uh even within the account abstraction ecosystem so far is Key store rollup um that can address things like um if your regular EA the cool thing is that you can derive multiple accounts from the same authentication uh method so you have

your PR private key and you can actually create more accounts on your metamask wallet for example and um these are not linked in between them but still you can all use them easily and just derive a bunch of more uh and the other part is that you can actually have the same uh yeah authentication mechanism used across different networks uh because it's very standardized you can just have the same account also on uh layer twos that you have on on if main net and that's a challenge with smart accounts because they are smart contracts they're deployed as individual accounts smart contract accounts on on a network if you want to have multiple accounts on the network with the same uh scheme you can do that but it's it's still individual

accounts so meaning that if you change something with one account it doesn't automatically change the the signer the key on on the the the other account and especially uh when it then comes to cross chain so you might have replicated your account from if you main net on optimism uh and you want to exchange your keys across these accounts then you have also an additional Oracle problem uh because this information from what's the new key on mainnet needs to somehow go to the optimism and their key store key store comes into play um that basically says let's do the authentication or the it's it's it's like like of singaling out uh a password manager into from your accounts so you

have your password manager which source authentication uh for the accounts in a separate contract and then you have just the accounts uh derive this authentication uh from from this uh key store contract and they don't have the authentication in their account itself but just always check with the key store contract what what's the authentication um exactly and this addresses also the uh kind of key uh exchange topic or the the sying topic but especially when then comes to cross chain there can be elegant Solutions where you say this key store contract is not a contract on layer one but let's actually move it into a rollup uh not

like a full evm rollup but something that has limited operations that is very specialized on on just securing you or of mapping accounts to keys in a way and then is much more gas efficient through that and then you could actually use something like uh cross chain State proofs to go from a separate Layer Two and check with that key sto roll up what's the uh the current setup and as it changes you just it just deres the new setup from there uh it's still quite challenging how do you actually achieve this cross chain stay proof because we need to uh yeah propagate block headers across networks and it's not non trivial

and it's it's just a balance between uh cost efficiency and speed and decentralization and there's not really a perfect solution but that's probably where a lot of experimentation will be around this year and I know that big uh players are like base or scroll are very much committed to uh finding Solutions there uh this year then another more Niche thing but what which I also find interesting how smart accounts can uh yeah provide value this year um is around trfi transition so that's something that we've seen now in the last months is that or even in years um you can start with Neo Banks uh not supporting crypto and then you've

got the the users asking for crypto which uh leads them to implement in custody trading so the all the crypto is actually on the balance sheet they usually support like a few different coins um that they feel uh confident with from a regulatory perspective and um yeah then uh yeah it has nothing to do with custody or anything uh but it at least gives people exposure to that uh but then the next step is to actually open these wallets have like designated user wallets um which then allows them to offramp and on-ramp crypto to to their own wallet in there um then next step is that they uh have users that are

asking for some Niche assets um some meme coins and they don't want to have them uh somehow on their balance sheet so they enable self custody wallets so actually have to give a key to the to the users and say if you want to trade these meme coins do that on on your uh self custody wallet there uh and then they us usually realize that it's quite some shift from having people use a custodial solution to a complete s custo solution with a private key which then makes them think around how can we leverage smart accounts where it it kind of brings users a little bit more back into the control of uh of the neobanks be it like as a recovery feature for example or uh just for having a bit more handholding uh

involved and then finally nosis pay is going to be interesting and um yeah I got a card here that's actually like a Visa card uh this is built on on safe so it leverages the the smart account there and the cool thing here is compared to other crypto cards it's not something where it offramp my crypto and it top up some debit card but it's actually a full self custodial card so all my assets are on the safe they own chain and only when I pay in the supermarket actually a offramp is happening at I think one of the best off- ramping fees in in Industry uh and that's enabled by uh having uh smart accounts that allow the user to to give like a certain daily

limit to nosis pay which is then integrated into the Visa Network and allows them to then avoid double spending where you pay in the supermarket and then don't repay them on chain but you actually have this like three minute uh period where uh nosis pay can withdraw from your account before you could uh send out from from your save and this is um yeah just interesting solution to allow uh payment providers to add value to to users without actually having custody over the assets that's usually a problem with um anyone that wants to provide Financial Services once you have custody over user assets then you it comes with all this longtail of uh yeah of of of Regulation

and compliance requirements that people usually don't want or just adds to the cost um yeah some concluding thoughts and it's it's in a way a a theme that is across all these use cases that are shared is that uh one of the uh things SM conss will be doing is fundamentally change how ownership Works uh when it comes to to crypto is so far we had this U yeah this saying of of not your keys not your crypto so people would either go full self custody uh and they would manage their own keys and they uh had no third parties involved uh or they would just rely on the third party and sometimes they get wrecked and and

sometimes they don't uh but that was the the current Paradigm and I think smart accounts will fundamentally break up this dichotomy where it will be be much more in like yeah there will be much more solutions that are somewhere in between uh yeah in in a way that like like uh like nosis pay where you have maybe a certain trust assumption up to a certain daily limit uh that that goes to the to the network something like a Signum where you give certain functionality to third parties in a way that's more that's still protected or there's some some VTO rights involved and so on uh or some AA based solutions that uh yeah neobanks will be using to handhold their users into the the web

fre ecosystem and yeah with that um yeah if you want to learn more about safe go to safe. Global or on X at safe and I'm not sure I think I took five minutes too long so not sure if I can do questions yes thank you uh so thank you very much Lucas for such aspiring presentation and unfortunately we don't have time for questions right now but we can also reach look us out of the room outside or through linol in but we thank you