What is Account Abstraction?

What is Account Abstraction?

Tosin Onikosi

Tosin Onikosi

Content Lead

February 3, 2023

Account abstraction is a term that has become increasingly relevant in the world of DeFi and Web 3 as a whole. It is a concept that describes separating the management of assets from the assets themselves, allowing for secure and transparent access and transfer of said assets. In this article, we’ll delve into the definition of account abstraction, its purpose in Web 3, and explore its benefits.

Explain Account Abstraction to me like I’m in high school

Account abstraction is essentially the separation of low-level details of an account, such as storage and maintenance, from the higher-level logic of the system that uses the account.

In simpler terms, it is the separation of the account that holds your funds from the account that actually executes transactions. The dApp’s system takes care of the low-level details, such as encrypting the user’s data for security, and the users are only concerned with the logic of making transactions, checking their balance, and so on.

Account abstraction allows dApps to separate the implementation of asset storage and management from the rest of its functions, making it easier to update and maintain the underlying infrastructure without affecting the functionality that relies on it

A step towards better UX for DeFi products

Despite DeFi’s rapid growth over the past few years — offering a new world of financial opportunities without the constraints of traditional finance, — the current DeFi ecosystem can be confusing and intimidating to newcomers, with its technical jargon and complex user interfaces. Account abstraction offers a solution to this challenge, by making the use of DeFi applications and services more accessible and user-friendly.

The concept of account abstraction will allow for the separation of the underlying technology of a blockchain from its user interface. Thus paving a way for diverse and more familiar experiences on top of blockchain networks while retaining the security and immutability of the Blockchain.

In tradFi, banks provide account abstraction by separating the technical details of how they store and manage customers’ financial information and assets from the higher-level logic of how customers interact with their accounts. Customers interact with their accounts through a user-friendly interface, such as an online banking website, without worrying about the technical details of how their information is stored and managed by the bank. Account abstraction in Web 3 aims to provide a similar level of convenience for decentralized assets without the need for intermediaries.

Similarly, in DeFi, account abstraction is used to create a unified, cross-chain interface for accessing digital assets stored on different blockchain networks. This allows users to manage their crypto wallets and interact with dApps regardless of the underlying blockchain technology.

Account Abstraction and Ethereum

Today there are two account types on Ethereum: Contract Accounts and Externally Owned Accounts (EOA, basically that last one is regular user accounts). and for anything to happen on-chain, a transaction must be initiated and paid for by an EOA.

This basically means that the private key is the only way to control an EOA because it is used to create a signature that proves to the blockchain that you own the account. This current setup is inconvenient for most people because it means that if you lose your private key, then you lose your account and by extension all your funds.

In the case of Ethereum, account abstraction seeks to eliminate the existence of two types of accounts by unifying them. Thereby allowing a single contract account to transact with tokens and create contracts, unifying both account types. Instead of being separate account types, both EOAs and CAs will fall under a single type.

Benefits of Account Abstraction

At its core, account abstraction provides a secure and transparent way for users to manage their assets in a decentralized network. By abstracting the management of assets, DeFi platforms can offer a more secure environment for users to interact with the products and each other. This is particularly important in Web 3, where users are looking for ways to securely and transparently manage their assets without relying on centralized intermediaries. Asides from security and transparency, some other benefits of account abstraction include:


With a unified interface, users can seamlessly switch between different blockchain networks and interact with a variety of dApps, without having to manage separate accounts and keys for each platform.

Key Management

Key management is a significant barrier to entry for newcomers in DeFi where users are responsible for managing their own private keys, which are used to access and control their digital assets. However, many people are not familiar with the concept of private keys and how to securely manage them, which can lead to confusion and mistakes.

Losing or mismanaging a private key can permanently lose access to the corresponding digital assets. Additionally, many people are not confident in their ability to protect their private keys from theft or hacking, which can be a significant concern in the world of DeFi.

Account abstraction can help solve the key management issue by allowing users to store their private keys in a secure, non-custodial crypto wallet, and manage their digital assets from a single interface.


Another important aspect of account abstraction is scalability. By leveraging the strengths of different blockchain networks and off-chain solutions, DeFi can scale to support the explosive growth in the user base we expect to see in the coming years and the accompanying number of transactions.

Reduced risk of smart contract vulnerabilities

Separating the underlying logic from the user-facing interface makes it easier to audit and test the smart contract code for vulnerabilities without affecting the front-facing functionalities that rely on it thereby reducing the risk of exploitations.


Overall, account abstraction is an important aspect of DeFi that offers a range of benefits to users, developers, and the ecosystem as a whole. With its focus on interoperability, key management, scalability, and financial sovereignty, account abstraction can revolutionize the way we access and use digital assets and finance.


The information provided in this marketing material is for educational and informational purposes only and should not be construed as financial or investment advice. Cryptocurrencies are highly volatile and speculative assets that can experience significant price fluctuations. Past performance is not indicative of future results. Any forward-looking statements reflect MELD’s views at the time such statements were made with respect to future events and are not a guarantee of future performance or developments. You are strongly cautioned that reliance on any forward-looking statements involves known and unknown risks and uncertainties. You should conduct your own research and consult with a financial advisor before making any investment decisions. The issuer of this marketing material assumes no liability for any financial losses or damages resulting from your reliance on the information provided herein.

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