Web3 on Fire| ERC-4337 is here

What does the new standard mean?

GM, frens. Ambire here with our weekly newsletter. Crypto space can be a wild and unpredictable place, full of surprises, but it's also an exciting one. Take the roller coaster ride of ups and downs with a pinch of salt and a dash of humor - at least that's how we roll. Today we'll be talking about: Ethereum's ERC-4337, Polygon CEO saying that the crypto future is not necessarily multi-chai, EU changing their mind on "self hosted" wallets, the Wormhole hack and Chainlink's new Functions platform.

So here it goes:

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Ethereum ERC-4337: what does the new standard mean?

Ethereum chain has activated a new standard, called ERC-4337. One of its features was previously advertised by Vitalik as a “key enhancement” to the ETH. So what's this main feature? Account Abstraction. In very simple terms, it introduces a new type of wallets that are smarter and more user-friendly. Ambire CEO Ivo Georgiev wrote a very very good thread on 4337, Account Abstraction, smart wallets and MPCs. We couldn't recommend it more if you want to really grasp it:

The ERC-4337 was implemented via the EntryPoint smart contract and has already passed a full security audit. The reason why it was so easy to implement is because the upgrade didn’t require any changes to Ethereum’s code and as of now, it runs separately from the main protocol.

Essentially it adds a new layer on top of Ethereum mainnet, meaning there will be yet another stack of tech to get your head around, but eventually, it will be integrated into mainnet, and the new useful functions are more than worth the hassle.

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Polygon's CEO: The future is not necessarily multi-chain

In a recent interview with Ran Neuner on the Crypto Banter YouTube channel, Polygon co-founder Sandeep Nailwal predicted that Ethereum would come out on top as the dominant smart contract protocol in the future. He suggested that all other competing layer 1s would eventually fall by the wayside.

Neuner then asked him to clarify if this meant the likes of Solana, Aptos, Avalanche, and Cardano would disappear. Nailwal responded that these protocols have not yet demonstrated significant traction and that no other chain could compete with Ethereum.

Immediately, crypto community members jumped into the comments section to point out that layer 2s exist for a reason - to patch up the failings of the base layer - and criticized him for being short-sighted.

The truth is that Ethereum is the most popular smart contract protocol right now, and would you need all those other chains in the future if we removed the speculative part and simply focused on the fundamentals? Nailwal's bold prediction may be closer to reality than we believe, but we can only wait and see to learn for sure.

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EU changed its mind on "self-hosted" wallets

EU's anti money laundering laws were revisioned and it looks like they did a u-turn on their stance on "self-hosted" wallets. After originally proposing a ban on any privacy-enhancing crypto assets, it seems that they had a change of heart and are now excluding private wallets from their bills. Seems like privacy still will have its place after all.

Though it's not all roses - if the originator or beneficiary of a transaction cannot be identified, then the same €1,000 ($1,070) cap will still apply. But that's still miles better than a full-on ban.

If the EU is listening to regular users, then it's a sign of good things to come. They could be looking towards having a more balanced approach when it comes to crypto regulation and that can only be a great thing.

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Wormhole hacker gets counter-hacked

Jump Crypto and Oasis.app got the money back from the Wormhole hacker (who stole around $200m last year) but not in the traditional sense. Instead, they clawed back the funds by exploiting a vulnerability in hacker's smart contract. This was possible due to Jump’s expertise in web3 infrastructure and Oasis.app’s decentralized finance knowledge which allowed them to break through the hacker's defenses.

Around February 2022 the hacker managed to exploit a vulnerability in the Wormhole protocol’s token bridge, stealing around $321m worth of wrapped ETH (wETH). The money was then moved through various Ethereum-based decentralized dapps with intention of laundering it.

Oasis said that this exploit was possible due to a bug in the Wormhole protocol which was highlighted by white hat hackers earlier last month. Now the funds have been transferred to a wallet controlled by Jump Crypto - an authorized third party, where the funds are now safe and secure.

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Research corner: Chainlink's new Functions platform

Chainlink introduced its newest offering, Chainlink Functions, to the world. Functions is a developer platform that promises to simplify the way Chainlink dApps interact with traditional web apps.

Currently, Chainlink has found plenty of success in the industry with over 650,000 active users and has always been a trusted supplier of data. But with its newest offering, Chainlink is now taking things to the next level.

The beta is now available on the Ethereum Sepolia and Polygon Mumbai testnets, allowing developers to connect their dApps or smart contracts to any application programming interface from within the traditional tech space without having to maintain any additional cloud infrastructure. And if that wasn’t enough, Chainlink also integrates with various cloud providers like AWS. So, how can the space benefit from this?

First of all, Chainlink Functions would make it easier for developers to build dApps that depend on an Oracle for data. This means increased adoption of existing blockchain applications and new dApps that benefit from real-time data. With the integration of cloud services as well as other bells and whistles, modern devs will more likely see the value in Chainlink and start building on its platform. So all in all, Chainlink’s Functions platform is sure to make a splash in the development space and bring more people into the blockchain world.

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The fun page: our weekly meme collection

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That's all for now, frens.

We'll see you next week. And remember, the market conditions are temporary, but our commitment to building a better DeFi is here to stay. Thanks for joining us and we look forward to seeing you back next week. Cheers!

Yours, The 🔥 Team

Brought to you by Ambire: The Web3 Wallet That Speaks Human