Account abstraction: Finding a balance between on- and off-chain activity

The possibility that user-intent based applications could theoretically censor user activity is a “potential threat,” Chase Chapman says

article-image

THAMTECT/Shutterstock modified by Blockworks

share

Account abstraction and concepts like user intents “add a ton of design to the space,” Chase Chapman believes. But the development of off-chain scaling solutions, she notes, could create centralized layers in the system. 

Dune headmaster Andrew Hong says he has spoken to a number of teams about the conundrum. Some apps, such as Uniswap or CoWswap, could implement gossip networks for the sake of transparency, he suggests.

“You can have a node network without a blockchain,” he adds. “That’s kind of what databases are, to begin with.”

Speaking on the On the Other Side podcast (Spotify/Apple), Hong says he doubts that every application will provide this level of participation, mostly for practical reasons. 

“If I’m a game developer,” he explains, “and I need things to move really quick, maybe for those [elements], it stays centralized and there’s nothing users can really do to force things to be otherwise.”

“There is some risk there.”

Hong concedes that in some cases, the trade-off between better user experience and adoption for some “layer of centralization” is probably worth it.  

“Let’s say I’m playing Magic the Gathering on-chain,” he says. In this hypothetical scenario, Hong says that while he might not be able to check the game’s logic as it operates on a centralized layer, he can verify that his on-chain cards are under his control.

“Some components? Yes, I really care,” he says. “Some other ones? It’s like, all right, worst case scenario, I still have my NFTs.”

The user intent mechanism is an attempt to find a balance between what does and does not need to be on-chain, according to Chapman. “They’re minimizing the amount of unnecessary complexity on-chain,” she says.

“You still have the outcome of your transaction. You just don’t entirely know how it got there, which is probably the case for users anyway.”

The key is to ensure that users retain the option to act directly on-chain, Chapman says, by submitting transactions to the Ethereum public mempool. “But if they want to, they can basically opt into this intent-based system.”

Chapman mentions the example of Uniswap and the recently introduced UniswapX protocol. “If you want to take advantage of an intents-based architecture, where you have gasless transactions and you might actually end up getting a better rate, you can use UniswapX,” she says. “If you are worried about censorship, for example, then you can use Uniswap.”

This is not a one-way path

The possibility that UniswapX could theoretically censor user activity is a “potential threat,” Chapman says. She then wonders if it’s possible to limit activities to only interact with smart contracts through user intents.

“That, to me, is where things get a little bit scarier,” she says. “It’s basically like, forced use of a centralized provider versus optional opt-in use of a centralized provider.”

Hong notes that many mechanisms such as whitelists and airdrop lists are “already centralized ways” of limiting user activity. “Everything’s a balance,” he says. “Yes, if you centralize things so that you can only go through intents, there probably is a censorship risk to it.”

“People like to build,” he says. “I trust the community of developers to figure this out.”

Chapman retorts, “they’re gonna build it and then eventually get slapped by the CFTC — and then we’ll be like, oh shit, censorship is a problem in these systems.”

“And then we build backwards,” Hong replies.

“We can always go back to just the contract-based way of doing things,” he says. “This is not a one-way path.” Externally owned accounts (EOAs) and smart contracts are features that are “never going away,” Hong says. 

“There’s at least that saving grace.”


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Frax report cover.jpg

Research

Frax saw continued development in its frxETH liquid staking derivative and Fraxlend money market throughout 2023. Frax V3 introduces an RWA strategy to drive utility to the protocol's cornerstone product, the FRAX stablecoin.

article-image

Heron Finance caters to US accredited investors and uses Goldfinch credit markets on the backend

article-image

Bitcoin, up more than 160% year to date, has plenty of steam left in this rally, analysts say

article-image

Nova Labs will hope to grow Helium’s hotspot network to reduce backup coverage costs paid to T-Mobile

article-image

The LinkedIn posting states that the position would “support the Federal Reserve System’s [CBDC] Research and Development program.”

article-image

Both central banks are exploring the impact a CBDC could have on an economy

article-image

Neutron core contributor Dutheil notes this is “a period of consolidation” in the Cosmos ecosystem