Making Ethereum Wallets Smarter Is the Next Challenge—and Visa Is Among Those Working on It

Crypto wallets are criticized for their clunky UX, but that may soon change thanks to a few crypto projects—and the world’s largest payment network.

By Liam J. Kelly

Why aren't crypto wallets as clever as banking apps? Image: Shutterstock.

t’s no secret that crypto wallets need a makeover, and fast. But as the pieces and players leading this makeover emerge, so too is a fight over what to call the effort.

Some call it account abstraction, others call it EIP-4337.

“We call it a smart wallet," Argent cofounder and CEO Itamar Lesuisse told Decrypt. "It’s as simple as that.”

Argent, along with Safe (formerly Gnosis Safe), is at the forefront of the account abstraction movement, making crypto wallets easier, and smarter, to use.

The story of account abstraction, or smart wallets, dates back as far as 2016 with Ethereum Improvement Proposal (EIP)-86, and there have been many other related EIPs along the way.

It's a movement that's attempting to change the current wallet standard, called Externally Owned Accounts (EOAs) like Metamask, to a smart contract-based one. Whenever you go about your crypto business, you currently need to sign your EOA wallet each and every time you execute a transaction. It's also risky, due to the unique demands of private key management.

Account abstraction provides far more flexibility for crypto wallets. Instead of individually signing 10 different transactions, for example, a smart contract wallet could batch all of these transactions into one click.

These new types of wallets could also mean adding features like recurring payments or, in the case of crypto, recovering lost private keys. Argent solved for this in 2018 with something called social recovery. Wallet users would tap friends or family members to help get back their wallets back should they lose the keys.

Like the smartphone, Lesuisse and his team mean to bring crypto wallets out of the landline era and into the world of programmable money. Another analogy that the Argent chief uses is (ironically) when people first began moving the cash in their wallets into bank accounts.

“Suddenly, there was a piece of software that could do stuff for us to make it easier to transfer or make it more secure,” he said.

Like banking, smart wallets refer to just about anything that we can program our money and accounts to do without needing our intervention.

Visa turns to smart wallets

The trend is also turning heads at payments giant Visa.

In a new deep dive report on self-custodial crypto wallets, Visa wrote that “Ethereum is designed for push payments” rather than the more intuitive and automated “pull payments.”

The former refers to manual payments made by the account holder and the latter to payments by which money leaves an account automatically, like auto-payments for student loans or paying your mortgage every month.

Smart wallets would essentially usher in more of those programmable pull payments to crypto, and make it look a lot more like how we use money in the bank.

“It's like blockchains took all these sensibilities away that we were fully expecting and using non-stop in the world. Blockchain sort of ripped off all that from the developer's toolbox,” StarkWare co-founder and CEO Uri Kolodny told Decrypt. “Account abstraction is saying, ‘guys, can we please have those very sensible tools back in our hands?’”

Kolodny’s team is behind StarkNet, a speedy layer-2 network built on Ethereum, and rolled out a wallet browser extension back in 2021 with Argent called Argent X.

As part of its tinkering in the smart wallet space, Visa also turned to the layer-2 solution to experiment with so-called delegable accounts.

“The most beautiful thing about the Visa project is that we only became aware of it when they first posted their amazing research,” StarkWare co-founder and president Eli Ben-Sasson told Decrypt. “They looked around, and realized that they needed to start from a place both where they will have a global scale needed for their customer base and also has the account abstraction or, as we like to call it, smart wallets, out of the box.”

A delegable account, per Visa’s research, would essentially integrate auto-payments into a crypto wallet and could come with a series of constraints, such as making the payments monthly or putting a limit on how much can be pulled from the wallet.

Beyond the traditional use cases like those that Visa has in mind, smart wallets would also be supremely useful in the world of on-chain gaming.

“If you play games, you probably wouldn't want to sign a transaction every five seconds, every time you are killing a player, winning new updates, and then paying for the transaction,” said Lesuisse. “With account abstraction, you can program what we call a ‘session key’ and say, ‘hey, I will let that game sign for me for the next hour.’”

It’s still early days, of course, and custodial wallets like Coinbase Wallet or the original crypto wallet MetaMask still dominate the space.

But as the idea of account abstraction (or simply smarter wallets) gains more attention among users as a viable alternative, the Web3 heavyweights could face some serious competition.