The recent Pectra update on the Ethereum (ETH)
network introduced the EIP-7702 standard, which quickly gained significant adoption. This new feature, enhancing standard Ethereum wallets with smart wallet functions, received over 11,000 authorizations within a week. It notably improved the user experience, allowing non-experts to access Ethereum’s advanced features more effortlessly.
Transformative Impact of EIP-7702 on Smart Wallets
EIP-7702 eliminates the need for Ethereum users to transition to non-standard smart wallets, easing their technical burden. Through this standard, traditional wallets controlled by private keys (EOA) can temporarily authorize a smart contract, acting like a smart wallet. Users can access advanced transaction features without losing their existing wallets.
When a wallet authorizes a smart contract in the new system, a “delegation indicator” becomes active. This indicator processes incoming transactions through the authorized smart contract instead of the traditional method. Users can revoke authorization at any time, offering both flexibility and security. This structure enables features like placing multiple orders with a single transaction, verifying multiple signatures, setting spending limits, and scheduling automatic transactions.
Fierce Competition Among Wallets and Platforms
Following the Pectra update, the wallets and platforms that swiftly adopted EIP-7702 became evident. According to Entropy Advisors’ Dune data, nearly half of the authorizations are linked to a delegation contract by thecryptoplatform WhiteBIT. With over 5,300 transactions, WhiteBIT actively utilizes these authorizations to enhance user experience, possibly optimizing gas sponsorship, batch transaction execution, or user onboarding processes.
The OKX wallet stands out among individual wallets, surpassing competitors with over 3,100 EIP-7702 authorizations. Although the popular MetaMask wallet has just over 1,300 delegation records, the amount of ETH held in its contracts exceeds that of OKX, indicating MetaMask users engage in transactions with higher balances.
It is well-known that the Pectra update is not limited to EIP-7702. It also includes improvements for Ethereum validators and Layer-2 scaling-focused “blob” data enhancements. However, the most tangible user-side innovation proved to be the introduction of smart wallet experiences to standard wallets through EIP-7702.
