Tuesday, April 23, 2024
Ethereum

Account abstraction could change how institutions interact with Ethereum — Safe co-founder

On Episode 21 of Cointelegraph’s Hashing It Out podcast, Elisha Owusu Akyaw talks to Lukas Schor, co-founder and head of ecosystem at decentralized custody protocol, Safe. Schor breaks down how account abstraction is an overhaul of regular asset management processes and an improvement to existing wallet recovery options. 

Safe Wallet leverages smart account features to create more “accessible” and “easy to use” wallets which Schor argues is important for onboarding institutions. Safe provides a user experience where multiple keys control a single account. Users can decide how many keys are needed for various tasks like interacting with decentralized applications or sending other types of transactions, a feature Schor calls a “huge security advantage.“

“And this really is like a huge security advantage because you can say your account is like a two out of three configuration. So you have three private keys that have are set as controllers of the account, but you need only two of them to make transactions.“

Schor also argued why account abstraction is important for decentralized autonomous organizations (DAOs). Schor highlighted that DAOs want to coordinate among many people around a shared treasury or shared assets, which requires a way to enforce ownership and coordination. What’s more, DAOs can benefit from automation because getting everyone’s approval in a governance mechanism can be expensive and time-consuming.

“Account abstraction is a necessity for DAOs.“

Schor also zooms in on account recovery. Hardware wallet provider Ledger recently faced some backlash after announcing a new feature dubbed Ledger Recover. Schor mentioned that he feels bad for Ledger because he recognizes where they are coming from and the need for a better recovery solution. He also highlights the concerns of users who fear that third parties could theoretically collude to take over their accounts.

Related: Mutual aid, DAOs and activism: The Agenda podcast chats with PactDAO co-founder Marisa Rando

According to Schor, account abstraction could handle the issues around Ledger recovery through innovations like hybrid custody, which combines self-custodial wallets and third-party services to block potential malicious recoveries.

Other topics covered include sustainable Web3 developer hiring and how Safe Core works. Listen to Schor’s entire conversation on Cointelegraph’s Podcasts page, Apple Podcasts, Spotify, Google Podcasts, or TuneIn.

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