The prominent payment company Visa remains committed to investigating digital asset payments and researching cutting-edge technologies that facilitate seamless onboarding and smooth digital transactions within cryptocurrency. Following their examination of Account Abstraction for secure automated recurring payments in self-custodial wallets, Visa is now exploring utilizing Account Abstraction on Ethereum to revamp gas fees.
Visa Ventures Into Ethereum’s Account Abstraction For Crypto Payments Advancements
Visa has successfully implemented two sets of Paymaster contracts on the Ethereum Goerli testnet, demonstrating their efforts to enhance user convenience by revamping gas fees on the blockchain. The implementation of ERC-4337 enables direct ownership of smart contract accounts by their respective owners. Combining Account Abstraction and Ethereum Virtual Machine compatibility brings additional benefits and advantages for end users.
Guy Sheffield, the cryptocurrency head at Visa, took to Twitter to announce the deployment of Visa’s inaugural paymaster smart contract on the ETH Goerli testnet. This development coincides with ongoing exploration and experimentation of account abstraction and ERC-4337.
According to blockchain specialist Cygaar, the Visa team developed a paymaster contract that initially obtains the ETH exchange rate for the ERC20 token (L110) and subsequently transfers the corresponding quantity of ERC20 tokens to its address (L112). In the subsequent experiment, a paymaster contract was established to cover the gas fees associated with user transactions fully.
Expressing his enthusiasm for the recent progress, Raj Parekh, former Visa Crypto executive and current CEO of Portal, expressed his optimism, stating that
“A Visa-powered paymaster could be a large driver of growth for the ecosystem.”
Visa’s Experiment Findings
Visa has released a report regarding its trials with ERC4337 (Account Abstraction). The Ethereum mainnet implemented ERC-4337 on March 1, 2023, enabling smart contracts to conduct transactions on behalf of the user.
Visa conducted an experiment that involved developing two prototypes to showcase potential applications of a novel Paymaster flow. The prototype demonstrated how the Paymaster could facilitate the utilization of ERC20 tokens for gas fee payments, while the second prototype showcased the ability to fully cover the transaction’s gas fees.
Using the initial Paymaster contract, the experiment showcased the ability to make payments using ERC-20 tokens via the ERC-4337 Paymaster. It examined the feasibility of users paying transaction fees with alternative tokens, such as a stablecoin pegged to the US dollar or potentially a future Central Bank Digital Currency (CBDC).
By incorporating the ERC-4337 account abstraction and the forthcoming smart contract wallets like Soul Wallet, there will be an enhancement in wallet security. Vitalik Buterin suggests implementing social recovery for hot wallets, which contain a small portion of an individual or organization’s funds while utilizing multisig setups for cold wallets that safeguard a person or organization’s savings.
As of writing, Ethereum (ETH) is traded at $187.88. Over the past 24 hours, Ethereum has experienced a 1.07% increase in value.