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Ethereum’s Upcoming Pectra Upgrade to Transform Crypto Wallets with Enhanced Smart Contract Features

Ethereum‘s forthcoming Pectra upgrade, anticipated for late 2024 or early 2025, is set to significantly enhance the functionality and user experience of crypto wallets.

The Ethereum Improvement Proposal (EIP) 3074, integral to this update, was recently approved and will enable standard crypto wallets to operate similarly to smart contracts.

The core functionality of EIP-3074 will allow standard externally owned accounts (EOAs), such as those used in MetaMask wallets, to execute operations typical of smart contracts.

This includes transaction bundling, which permits a single signature for multiple transactions, and sponsored transactions, allowing a wallet to allocate funds for use by another entity.

This mimics the account abstraction introduced in ERC-4337.

However, the upgrade is not without its concerns.

An anonymous developer from DefiLlama, known as 0xngmi, highlighted on social media platform X on April 11, the potential risks associated with EIP-3074.

“Now it’ll be possible to fully drain an address (all tokens, all NFTs, all DeFi positions…) with only one bad signature,” 0xngmi stated.

Despite these security issues, Harrison Leggio, co-founder of Gaslite, acknowledged that mishaps are common, noting on X, “people will always find a way to lose their money.”

READ MORE: Telegram Faces Security Scrutiny: Firm Denies Vulnerability Amidst Expert Claims of Risk to Desktop Users

He further commented on the misuse of private keys: “People literally GIVE THEIR PRIVATE KEYS TO TRADING BOTS.”

Laurence Day, a software engineer, pointed out the utility of the EIP in enabling sponsored transactions.

This feature is particularly beneficial as it allows the storage of assets in wallets that do not hold Ether, with the sponsoring of gas fees managed through a controlling contract.

Additional capabilities introduced by EIP-3074 include a social recovery feature, which eliminates the need for traditional seed phrases by implementing new operational commands, AUTH and AUTHCALL.

As explained by an anonymous Web3 adviser, Cygaar, on X, AUTH is used for verifying signatures and actions, and AUTHCALL allows for interaction with the target contracts using the originator’s address instead of the message sender’s.

This update follows the recent Dencun update that reduced layer-2 transaction fees and precedes another planned project known as the “Purge,” discussed by Ethereum co-founder Vitalik Buterin.

This next phase aims to streamline the network by eliminating outdated and excess data.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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