#81 | Ethereum's ERC-4337 Will Bring Gasless Transactions and No Seed Phrases???

Estimated Read Time: 7 minutes

Hey friends,

Great to have you joining us! On today's edition, we cover the must-know of Ethereum’s new ERC-4337 standard, followed up by some exciting news from Pokémon and a new Web3 music platform. Let’s jump into it!

As an NFT newsletter, it would be hard-pressed not to cover Ethereum's shiny new standard that may forever change how we buy, secure, and interact with our NFTs. Recently released as ERC-4337 (Ethereum Request for Comment 4337), the new upgrade was integrated into its network with “plans to bring the smart contract functionality to wallets”.

To try and simplify this, you can think of this new standard as allowing Ethereum wallets to act as smart contracts and open a new world of Web3 “smart accounts”. The ERC-4337 focuses on enhancing accessibility by simplifying the process of wallet creation and NFT usage for buyers and sellers, in an effort to better prepare Web3 for mainstream adoption. The new “smart account” implements some exciting features from lost key recovery to gasless transactions, so let's have a quick look.

Key recovery: One of the most intriguing new features to raise eyebrows was its “lost key recovery” for the retrieval of lost private keys, a concept Bitcoin owners would have thoroughly appreciated considering over $140 billion of their tokens have been evaporated because of lost or forgotten keys. Dubbed as a “social recovery system” or “Group-Access wallets”, ERC-4337 permits authorized and designated users to restore access to your wallet in case of a key loss.

No seed phrases: In another effort to reduce the complexity of wallets for the average Web2 user, ERC-4337 enables “secure wallets” that have the option of not requiring a seed phrase which is often hard for people to remember or keep safe. In replacement of a seed phrase for authentication, users can use two-factor authentication and biometrics if they are okay with some reliance on outside institutions handling these security measures.

Automated trading: A benefit of bringing smart contract functionality to wallets is having these contracts be able to execute trades automatically without human intervention. With the ability to create processes around predefined conditions such as monthly spending limits, removing the manual strain of Web3 trading is another way ERC-4337 is trying to make this new world more accessible for users of all levels.

Gasless transactions: If this perked your spidey sensors, that's fair enough because technically nothing is ever free so it's worth emphasizing that these so-called “gasless transactions” are just enabling the option of passing the ball off to NFT collections and their DAOs to sponsor and pay for the gas fees of its users.

If you want to learn more about how we may soon be looking at a Web3 world made from not just wallets but smart accounts, I highly recommend checking out this in-depth ERC-4337 guide by beincrypto that goes through what we've covered with much more coverage on how it all works. Otherwise, we hope these new features have raised your interest and show yet another active step the industry is making toward making Web3 an easier place for mainstream adoption.

Pokemon has long surpassed household name status and it's no surprise with the Japanese powerhouse sitting as the world's highest-grossing media franchise of all time that towers over the likes of Star Wars, Harry Potter and the Marvel Cinematic Universe. Well, this goliath entertainment franchise that touches all avenues from video games and TV to collectibles and merchandise is considering broadening its horizons by entering Web3.

The news comes from a recent job listing for a “Corporate Development Principal” that has “Deep knowledge and understanding of Web 3, including blockchain technologies and NFT, and/or metaverse” who is “Deeply connected to a network of investors and entrepreneurs in the technology (Web3 and metaverse)” and has “Excellent business sense and ability to connect the relevance of potential partners or technologies with Pokémon’s existing assets”.

Interpret that how you will, but it is evident that Pokemon wants to try its hand at NFTs and have a go at utilizing Web3 for the company's vast amount of intellectual property. One thing that stood out to me in the job listing was how the hire “Focuses on the long-term gain over short-term/transactional gains”, which emphasizes how Pokemon recognizes the volatility of the current industry, but identifies the opportunities of a Web3 future.

Although this is arguably pretty speculative just going off a job listing, when it involves the biggest media franchise of all time it can't be understated the impact that any dipping of the toes in NFTs could have, and represents yet another major legacy brand starting their transition towards Web3.

To set the tone of this next story, Beatport is the global leader in electronic music for DJs, producers, and their fans as a two-decade-old platform that has catalogs comprising more than 16 million tracks and relations with over 91,000 record labels. Partnering with blockchain network Polkadot, Web3 is about to see the launch of Beatport.io as a digital collectible marketplace that brings NFTs to the electronic music culture. DJs and artists can utilize these NFTs to interact with fans in new ways such as early access to bonus features like unreleased tracks, discounted tickets, and access to global events and interactive experiences.

Community engagement seems to be the emphasis of this new platform, with Beatport’s Senior Vice President Ed Hill saying “The electronic music community has always been at the forefront of cultural shifts and their early embrace of Web3 and all the promise it offers is no different… Polkadot’s open and interoperable ecosystem enables us to seamlessly tap into Web3 and celebrate electronic music by connecting fans with their favorite artists in unique and powerful new ways”.

This was also nicely summarised by Polkadot partner Björn Wagner who said “We’re excited to see this application of Polkadot’s technology to better connect artists directly with their fans and reignite the collectible aspect of music fandom that has largely been lost in the age of digital media". This better emphasizes the opportunity of Web3 and how NFTs are reviving the collectible component of fandom in our new digital world, while utilising the multitude of other benefits that get fans closer to the action with utility that was never before possible.

Thanks so much for joining us today! While we curate the next edition of Morning NFTea we hope you have a great couple of days, take care!

We’ve got a lot of drama today, highlighted with blunders from quite a few top projects - namely Doodles, RTFKT and even the Bored Ape Yacht Club.

Doodles… launched socks yesterday. Yeah, socks.

Their holders didn’t really like it since it showed a tone-deafness to the community; while these collection activations (somewhat reminiscent of Top Shot-like challenges) are indeed innovative, there’s a time and a place for everything.

When faced with criticism in his own Discord server, mercurial and controversial Doodles founder poopie had some inflammatory quotables.

And the four famous words that have been making the rounds all over NFT Twitter…

All this may have taken a little bit of pressure off RTFKT, who also came under scrutinization for how its “Phygitals” seemed to look very different from the product renderings.

Perhaps one of their saving graces is that the team was still openly communicating and being transparent - after all, even if holders are disappointed, this far beats “floor it and gtfo”.

The top tier project in the space Bored Ape Yacht Club also had a big day with its Summoning activation — Sewer Passes were able to be turned into Power Sources for what one assumes will be Mech suits for Dogs and Monkeys.

The controversy? A previous tweet from Yuga Labs’ Chief Gaming Officer insinuated that Sewer Pass Tiers would be relevant in a future activation.

However, they announced today that the Sewer Pass Tiers will not be relevant anymore; on top of the fact that they had a metadata screw-up that led to buyers purchasing items with incorrect traits.

That crisis was handled promptly and all affected parties compensated.

Three top-tier projects, big blunders, very different ways of handling them.

Who did well? Has it affected your faith in any of these projects? Tweet at us and let us know.

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DISCLAIMER:

None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.