Why Smart Contract wallets are better than EOA wallets?

December 16, 2024
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Why Smart Contract wallets are better than EOA wallets?

There are 2 main kinds of 'accounts' or wallets - Externally owned accounts (EOAs) and Smart Contract Accounts. And smart contract wallets, specially enhanced after ERC4337 & account abstraction, are 100X better.

The short reason is - programmability. They can be easily modified using AA SDKs, such as Biconomy's, to offer an extremely customised & personalised experience.


EOA wallets are like the old landline phones

The EOA is your old way where you need to use a private key or seed phrase to access these. They are also 'hard-wired' and have just limited functionalities. That's coz the rules for using EOA wallets are hardcoded into the protocol and cannot be changed. Thus, they offer a 'one-account-fits-all' solution to all user and every need. So same rigid experience for a web3 newbie or veteran, whether you use it on a DeFi app or a game.

  • Only have limited functionalities
  • Can't add new capabilities
  • Everyone has to use it the same way


So, it's like an old landline phone. You can do just one thing with it, and every phone is going to be the same for everyone.

Smart Accounts -  the smart phones of wallets!

Smart Contract Accounts is the new paradigm shift. The recent standardised proposal EIP-4337 for Account Abstraction presents the standard for creating smart contract wallets. As the name suggests, Smart Accounts are managed by a smart contract. Thus, developers can add arbitrary logic for providing new functionalities. The rules for managing smart accounts are easily programmable. Thus, they offer an extremely customisable experience for every need.

  • Endless possibilities of what it can do
  • Continuously program new capabilities
  • UX customised for every need


So, smart accounts are like smart phones. Developers can program new capabilities and users enjoy an endlessly 'updatable' smart account that keeps improving their experience.

Why Smart contract wallets are 100X better than EOAs


Smart Phones have apps. Smart Accounts have modules.

One smart phones, devs code 'apps' which are code and logic that add a new functionality to your smart phone. From social media apps, to filters on your camera to neo-banking apps.

Similarly, devs can program 'modules' for smart accounts. These modules can add new functionalities such as:

  • Gasless transactions (Sponsored by dApp or 3rd party)
  • Pay gas in any token
  • Social or biometric based wallet creation & login
  • Account recovery in case of lose of seed phrase
  • Remove necessity to sign endless pop-ups (session keys)
  • Simple onboarding for non-web3 users
  • Setting spending limits


Adding such capabilities is also simple plug & play, thanks to Biconomy SDK. Check out the possibilities here that can be added to ERC4337 complaint smart accounts.

There is ongoing research & work on making these modules 'standardised' for all ERC4337 smart wallets. We will be publishing a piece to demystify these soon, so make sure you follow our blog!


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