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

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.”

---

Get the news in your inbox. Explore Blockworks newsletters:

• Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
• Empire: Start your morning with the top news and analysis to inform your day in crypto.
• Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
• 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
• Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
• The Drop: For crypto collectors and traders, covering apps, games, memes and more.
• Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.