The Future of Web3 Wallets: Exploring Account Abstraction with Ivo Georgiev, Co-Founder and CEO of Ambire

Speaker A: This is Tim Dalhouse and you're listening to the Dao Talks podcast. In each episode you hear me talk to builders and makers of Web3. Together we'll be exploring our multi chain future, share personal stories and discuss how we're investing, experimenting and failing with the startups that define the future. So join me on this journey of discovery as a chat with these leaders, change makers and misfits about tech, life, the universe and everything. Talking to Ivo, co founder, CEO of Buyer, uh, Smart Contract Wallet Leveraging account abstraction. We're going to be talking about what account abstraction does not only for like new users and web3, but to so called crypto natives. We're going to be talking about the multi chain future, Bitcoin maximalism, Ethereum maximalism and what it all holds for us, and the future of Web3 wallets. Hey Ivo, how are you? Good to have you on the show.

Speaker B: Hi Tim. Um, it's great to be on the show. Indeed.

Speaker A: Where are you?

Speaker B: In Sofia, Bulgaria.

Speaker A: All right, that's scheduling across time zones for you. Um, I'm currently in Indonesia. As I've mentioned, Evo, obviously you are with your project with Embayer, very deeply involved in what user experience does and can look like for end users. Account abstraction has been everybody's mouth and everybody's ears for the last few weeks or so. I want to start there. What's the cool thing about account abstraction? Why should anyone care?

Speaker B: I would say that it's a fundamental shift in Web3 user experience. And all of us who've ever touched anything web3, we know how much more, uh, difficult and convoluted it is than Web2. For example, let's say you want to use Uniswap with Metamask. Or let's say you're starting your user journey and you want to swap a token on Uniswap. You learn you need a wallet, then you install an extension, then you write down a seed phrase, which is a completely foreign concept to you. It's really easy to mess up. Then you find out you don't have ETH for gas. Then you have to answer your own questions in terms of how do you get this ETH for gas? And mind you, you don't even know what gas is. I'm talking about a new user here. And this is fundamentally different from something like Revolut or Robinhood, where everything is super seamless and super self explanatory. So basically web3 is the way of the future, but right now it's extremely difficult to use. And this is the problem that account abstraction solves. And this is why it's becoming more and more popular. It's not really a new thing. It has been around for a While, but with ERC 4337 and Ethereum Foundation's involvement in this, it has sparked its Skype in a way and its popularity and what I mean by a shift in user experience, a fundamental shift in user experience is account abstraction can eliminate seed phrases, it can eliminate the need to install a browser extension even because accounts are, uh, programmable. So you can have accounts powered by multiple keys. And the security could come from the fact that you are signing on your phone as well as your PC rather than having to protect a single private key on one device. Not to mention, you can have stuff like spending limits, account recovery also, so that if you lose your credentials in some way, you can recover your account. It's also a problem of gas fees because you can pay the fee in pretty much any token. So you can solve the problem of having to like look for eth and then register on a centralized exchange exchange just to buy it. So it's a huge improvement in ux.

Speaker A: What aspects are you focusing on with Embire and how did Ambire come about? How does it fit into the landscape?

Speaker B: Well, we're focusing on pretty much all of the aspects that I mentioned. We are not doing any of the more exotic account abstraction use cases like multisigs for daos or like, for example, there is a lending protocol called Gearbox which also works through account obstruction, where, um, it's not a lending protocol actually. It's a leverage protocol where the wallet itself has built in leverage. We're not doing any of that. What we're doing is we are bringing to the table a, ah, wallet for crypto natives which has all of the UX improvements that I mentioned. Because we believe that UX is not just for newbies, UX is not just for newcomers. A good UX is absolutely necessary for crypto natives as well, because we know so many crypto natives. Those people are our friends and we see them struggling with MetaMask every day, even though they've done this for years. So we are doing this, we are improving the UX for crypto natives. And when you say how Unbire came about, that's a really cool story. So it spun off a different project called Adex Network which we founded, which is an advertising network focused on user privacy and transparency. And it works on top of Ethereum payment channels and like every impression is a separate payment but in order to get people onboarded on Adex, we basically, the backstory here is that Adex is built for publishers and advertisers. So the people who are going to be using Adex are not crypto natives and are not technical in any way. So in order to onboard them onto Adex, we had to leverage account obstruction. And that was back in 2019. We were one of the first companies to ever roll out an account abstraction wallet, even though it was built into Adax network itself. But it solved all of these problems. It gave people an ability to log in with an email rather than a seed phrase. It gave them the ability to pay gas with stablecoins to batch multiple transactions in one. And basically all of those UX hurdles that a traditional wallet like Metamask has were solved in adx. So then at one point we figured out that this has more potential than just being part of an advertising network, and it has to be spun out into its own product. So that's how Ambire was born, the

Speaker A: future of wallets in that sense. Okay. And when you started laying out like the problems that account abstraction can solve for end users, you really started with problems of users that are just onboarding into Web three, right? Like wallet do I choose, then I generate a seed phrase, how do I store this securedly, right? And then I have a wallet and then how do I get like, I want to play on game on Polygon, so how do I get the token? And now I need a gas token. And we all know the headaches, what it means for new users. And I'm very optimistic as well, from what I understand so far. And you clearly the expert here on how account abstraction and new types of wallets like Ambar can reduce the friction there. So that's extremely exciting. I have a few more questions on that. But before I go into that, you just said you're focusing on crypto natives first. Okay. And, uh, there's one question. The first question is why on crypto natives first, if the most evident benefits is for new users, right? Because there's no further question asked. And then I would be very interested specific to crypto natives. And the second part of this question is, take me as an example. I'm a builder in the space. I'm not highly sophisticated. I use a, uh, ledger and I use MetaMask lead like 99% of people. What are the problems that you think that somebody like myself has every day that account abstractions and barriers of your product and solve? But let's go back here For a second, if the benefits of account abstraction and this ability to build new kinds of wallets is so attractive to solve problems of end users that uh, are just onboarding into Web3, why focus on crypto native?

Speaker B: So I don't agree that the problems that account abstraction solves are, ah, just for new users. Let me elaborate. So first of all, a very big thing is having the native asset for gas and crypto natives and power users and people such as yourself have a bigger tendency to use multiple chains, multiple networks. And so in Metamask, if I have Ether on Ethereum and then I want to transact on Polygon or on uh, Arbitrum or whatever, I have to figure out a way to get the native assets on the different chain. With Ambire, what you can do is top up your gas tank, which is like a concept where you just top up a gas tank on any network, on any chain, and then you can use the same funds to pay for gas on any other chain. So you would be solving this problem immediately. And it's a huge UX improvement. Arbitrum is you don't have to look for matic tokens, you don't have to do any of that. You don't need a centralized exchange, because usually the way to jump from chain to chain without having prior assets on that chain is a centralized exchange. And in Ambuire you just fund your gas tank and then you can pay gas on any network that Ambire, um, supports. So that's just one example of how it helps crypto natives.

Speaker A: The feature that you're pointing out is cross chain gas payments from a gas tank in one chain, right? So I have a gas tank on whatever and I can automatically pay gas on any other chains from that tank. Is that correct?

Speaker B: Indeed, that's correct. And also the fact that you can pay gas in multiple tokens, so you don't necessarily need ETH at all. And that's also something that crypto natives struggle with. And it's also a privacy benefit because when you create a new wallet, you have to fund it with ETH somehow. And this almost always compromises the privacy of the account because you have to fund it from an exchange. And this exchange, you've presumably done KYC on it. So this initial funding with it for gas is in many cases an issue. And that's something extremely important for crypto natives. In Unbire, you can use any stablecoin and you can also use the gas tank. So this is hugely important for people who have multiple accounts who use Multiple networks and those people are crypto natives. And then another thing is transaction batching where you can do multiple things in one transaction. This is I would say almost exclusively uh, feature for power users. We've seen a lot of our users use it, but almost all of them are power users. And this is where you can do for example multiple unit swaps in one transaction or you can do a swap and then send, or you can like claim rewards and then stake them again in one transaction, claim rewards and sell them again in one transaction. So that's something that's important to crypto natives. And perhaps the most important thing would be the transaction simulation feature which is extremely important for security. So for example, let's say I want to do a swap and I'm um, buyer the moment I have the swap in the transaction queue I would see how my balance would change after this transaction. So this is a huge security feature because if I'm interacting with non contract I would be able to see how my balances would change after the transaction that I'm about to make. So if this contract is malicious I would be able to see that it takes like my USDC or whatever and I will not sign the transaction. So that's also something specifically for crypto natives. And even though it sounds like the benefits of account abstraction are more beneficial to newcomers, as I said we strongly believe that UX benefits are uh, not just for newcomers and crypto natives are also struggling on a daily basis. We have hard data to prove this and the hard data is that many of our investors in the initial seed round who are crypto natives actually created an account with email simply because they don't want to deal with the seed trains anymore. Simply by giving them something better, by giving them something more intuitive, they are choosing the more intuitive thing even though they already know seed raises.

Speaker A: I'm very interested in going a bit further there and to Ambuire. So given that account abstraction is obviously a standard, first of all, right, I'm just thinking out loud like what we are going to likely see tons of these kind of smart wallets using account abstraction emerge, right? And I would also somewhat raise the question if a lot of the benefits that this account abstraction produces might be implemented or somewhat how you've done it in your ad system inside of a specific DAPP or protocol. Right. So trying to put this into question is maybe the first one is how do you think or what are features that are very unique to envire that you would say today sets embayer apart from, from Other projects that are already and will be emerging in the space to provide smarter wallets.

Speaker B: So I would say that something absolutely unique to us up until Avocado Wallet is the gas tank. So we launched this over half a year ago, actually I think around a year ago. And Avocado is so far the only other wallet which implemented something like that, which is, I already mentioned, it's a way to pay gas fees cross chain. So you top up your gas tank once and then you will be able to pay gas fees on any network then. Another unique thing about Amber is the self custodial email accounts. That's something that we haven't seen so far and one of the reasons is that many new wallets they focus on mobile first we're taking a different approach. We think that crypto natives currently like using laptops and generally desktop platforms, mainly laptops, for managing their funds. Even though a lot of the people that we are interviewing that we're doing user interviews with are saying our not using anything on mobile simply because all of the mobile wallets suck. But what I'm trying to say here is that many of the new account abstraction wallets are on mobile and specifically focused on new users and this is why they're not attracting this crypto native audience. And on mobile you don't need email authentication, you have enough security that the phone can give you, you have face id, you have biometric authentication and you don't need this. Meanwhile, in Unbire, which is a web wallet, we were the first wallet pretty much to roll out self custodial accounts powered by email. So you would be able to log in as on any Web2 application. And you can also set two factor authentication and basically use it exactly like a Web2 application but under the hood it's a smart contract wallet.

Speaker A: Very clear on that. How do you think this wallet space will evolve? This is kind of like my last follow up question I think because I think it's very clear what you're presenting. How do you see this landscape evolving? Like one of the questions that was bounced around in the team a few weeks back when looking at smart wallets like yours, the large player in the space and let's take consensus like Metamask, okay, the prime candidates to just extend based not um, just on the technology but extend into account abstraction and providing smarter wallets and basically take over the market. Is this from a founder perspective and CEO perspective of a project? How much of a threat do you think this is? Because I get the proposition, obviously the value proposition that you have the question would be if there would be an equivalent from MetaMask Tomorrow that integrates with the existing Wallet product. That would likely be a very significant threat. Do you see this the same or do you think that's not going to happen? Or what's your perspective?

Speaker B: Do you mean the chance that MetaMask will draw out their own account obstruction wallet?

Speaker A: Yes, obviously.

Speaker B: Well, that's a very interesting topic because I do know that the founders of Metamask are really interested in account abstraction. But I have heard from people from their team sort of fudge about account abstraction, which is interesting. What I would like to say about this is that, yes, obviously there is a chance of this happening, but it would be. It's harder for them to do it than a new wallet. And this is because the accounts that you already have in MetaMask, you cannot magically migrate them to account abstraction. Account, uh, abstraction accounts have different addresses. I mean, for the same private key, it would have a different address. So like if you're using your ledger, it will have one set of addresses for eos and then another set of addresses for smart accounts. So it is a UX challenge to combine both of those in one ui and it will be a UX challenge to explain this to people. I do think the momentum that they already have and the way that the product uh, is built kind of relies on accounts being QAs. Of course, I'm not saying that they cannot implement account abstraction, but I'm saying that it will be way messier than a, um, brand new wallet, which is only account abstraction that makes sense.

Speaker A: Lily, question for you there. I'm just curious about that as well. So going back to this feature that you explained earlier on about this cross chain gas tank, right? How do you actually, how do you deal with the bridging of the value? There is this like separate tanks and you just kind of like level them out internally. So if I have USDC on Ethereum in my gas tank and then I'm paying Matic on polygon and gas, what is happening actually there in the background? Because I don't think. Are you actually bridging and swapping tokens or is that.

Speaker B: No. So first of all, the first important point to clarify is that the gas tank behaves like a separate network, but it does have separate assets. So like, you cannot spend Matic if you have USDC in your gas tank, but if you do have USDC in your gas tank, you can spend it on any network. So like you cannot top up the gas tank with usdc. And then spend Matic, but you can top up your gas tank with USDC and then spend USDC for gas on Polygon or on Arbitrum or whatever. So the way it works in the background is you do send money to the relayer and that's the topping up part. And then the relayer basically has its own off chain ledger which knows I was being overpaid, that amount and therefore that person can now spend that amount on future transactions.

Speaker A: So you're maintaining an off chain ledger for this gas tank which is a separate protocol that is integrated and that protocol for that gas tank is part of Ambrosia. Are you using third party network or system for that?

Speaker B: It's an uniswouse implementation basically.

Speaker A: Interesting. I was just wondering about that and how that works. Okay. And uh, that is somewhat of a great transition into a topic that I really wanted to address with you guys because obviously just like other wallets you work across different EVM chains. But specifically because I know you have a swap integrated, I know you have this cross chain multi chain gas tank at the protocol as you just described. I'm wondering how you are looking at this multi chain future of web3. And what I mean by that is you obviously have Bitcoin fundamentalists that saying everything except Bitcoin is not going to work out. And you know, then m, you have Ethereum fundamentalists which go like everything except Ethereum is not really going to go anywhere. And then I guess you have people that see a very diverse ecosystem of hundreds or thousands of blockchains and then you have anyone somewhere in between. And what I would like to hear from you is what you think the future is going to look like. So on one side like a little bit far out, like where are we heading and what chains will exist and what chains will not exist in categories. And then second, I want to hear from you, what chains are you currently supporting and why and what are you really looking forward to add to the product, but as a separate part. So if you want to start on are you a Bitcoin fundamentalist or where are you positioning yourself and how do you see the future?

Speaker B: So I have a bunch of comments here and I'm really strongly opinionated. So I want to start with the fact that Ethereum Maxis, or as you call them, fundamentalists, they do not believe that Ethereum will be the only network, the only chain that exists. They also believe in roaps, so don't forget that. So in the mind of an Ethereum fundamentalist you have like tens of Follow ups or five rows at least. And then you have Ethereum and you have the multi chain paradigm right Then in the mind of a Bitcoin maxi I would say that there is something similar because you still have sidechains and they still believe in sidechains really strongly. So even in the minds of uh, fundamentalists you still have this sort of multi chain future. So that's the first thing I want to say. Second, personally I'm a very big believer in both Bitcoin and Ethereum. I feel like at one point on Twitter the sentiment was that this is a really rare point of view. But by talking to my crypto friends it turns out that it's a really common point of view. It's just that the people who are who believe in Bitcoin and Ethereum really strongly, they're not that vocal on Twitter because that seems to be like the most common sense stake that Ethereum and Bitcoin are going to win over anything else because they both have like their own advantages and disadvantages but they're clearly the only ecosystems that have adoption. You could argue about Solana, but it's very difficult when you compare Solana to Ethereum to argue that has permanent and proven traction. Obviously you have the roaps, you have the layer tools, but those are part of the Ethereum ecosystem. So those two ecosystems are the only ones that are clearly winning for now I would say. And the ecosystems that I'm definitely certain that they're going to exist for the next 20, 30 years or whatever. My point is that those are here to stay. So with all that said you, I really doubt that there are going to be hundreds of networks that people use. Even though both Ethereum, Maxis and Coinmax, they both believe in sidechains in their tools. I don't think that there are going to be hundreds of those because it simply doesn't make sense from a UX perspective. But I do believe in tens of those or maybe things will consolidate to like 5, maybe like Bitcoin, Ethereum and a couple of roll ups. And basically that's the way I see things from a UX perspective. It makes sense for things to consolidate because Ethereum is really built on composability. And this is one of the main value propositions of Ethereum that one thing can call a different thing. And within one transaction you can have so many contract interact actions. Even with account obstruction this is amplified because imagine that they have an account obstruction transaction that swaps a ah, token for another token and then sends it to you and then this one transaction I would call the wallet contract. The wallet contract would then call Uniswap, would then call each individual pool. So like that's maybe two or three pools. Then those pools would call the tokens in order to move them around. Then finally we would call the token again to move it to you. So that's composability and it's a really strong point of defi, which is arguably one of the strongest use cases of Ethereum. Actually it's not that arguable. One of the strongest use cases of Ethereum, arguably the strongest. So the strength of Ethereum is really composability. So composability doesn't work cross chain. And that's the fact of the matter. So we either have to move all of the DAPPS on one rollup and use them there or we have to keep using them on mainnet. So I do believe in rollups, but I think that this will consolidate to a really small number of chains that

Speaker A: people use just to follow up on that. So I follow on what you're saying, you know, roll ups and layer twos and sidechains out Ethereum, you know, and you're saying that there might be another five or ten other chains and some form you mentioned Solana. I think that's all good. Where does it leave all of the non evm um, chains?

Speaker B: Well, which ones are you talking about in particular? Because I would say Polkadot and Cosmos are the strongest and they also have EVM on them. So.

Speaker A: Okay, so that's exactly the point. So you would see as long as they become EVM compatible and by that become part of this composable future is fine. But they, that is the future on how things will the chains will integrate. That's your perspective, correct?

Speaker B: Correct. And I really do believe in EVM superiority in ways. Even though webassembly is really a fantastic addition but so far the ecosystem works that way that it really consolidated around evm. So it's really hard to imagine for me, even though you could argue that WASM is superior, it's really hard to imagine for me that it will replace the VM simply because of the momentum it has. It's really about momentum here. And by the way, to answer the second part of your question, which chains are we integrating and how is this going to be decided in the future? I'm really proud of what we're doing. We're basically integrating every big EVM chain and it's kind of a subjective thing which one is big. But think about it that way we have over 13 chains integrated right now, which is the most out of any account abstraction wallet. I think we even have more than safe, so no one even comes close. For example, Argent is really sticking to Ethereum. No one even comes close to our number. And the reason for this is that we believe that a wallet should never restrict you in any way. There is no way to get people to use your wallet. It's restrictive and opinionated in some way like that. For example, let's say that you're using Optimism in Arbitrum and then you also use Binance Smart chain. But most account abstraction wallets do not integrate Binance smart chain because they're opinionated in they're kind of Ethereum fundamentalists, so to say. So they haven't integrated Binance smart chain. And in Metamask it's so easy to add it. But in account abstraction worlds you generally don't have the custom chain functionality. We are thinking of ways to implement that. Probably we're probably going to be the first account abstraction wallet to allow custom chains. But every single account abstraction wallet right now doesn't have custom chains. So you're stuck with whatever they're giving you. And obviously they're not giving you a chain where you have funds on. You're not using it. So.

Speaker A: So let's appreciate your opinion and insights on this. What the multi chain future could look like to kind of go back for a few minutes just to account, uh, abstraction. What do you think are account abstraction use cases or what are problems that can be solved with account abstraction that haven't been solved yet? Where do you think is this standards, this technology's biggest opportunity for impact forward looking. What are you excited about?

Speaker B: Honestly, I would reiterate the same benefits that I already mentioned in my head. They're not solved yet. Even though technically they're solved. And we've rolled out the product that solves them and other people have also rolled out products that solve some of those that already have some of those benefits. But it's not solved until everyone is using it. So that's where I stand. I believe that 90% of what you can do with account abstraction to improve UX is already built. But the problems are not solved until everyone uses an account obstruction wallet. And this is the big challenge that we have, figuring out a way to get those wallets adopted, figuring out a smooth transition for people, allowing them to easily migrate funds. Because as I might have mentioned, I think. I didn't mention it directly but I implied it since you have a different address for account obstruction. Wallets for the same private key would have a different address for an EOA and a different address for a smart contract wallet. Because of this, you cannot just import your account from MetaMask, which is something that in Empire has been a huge issue for our growth, even though we're growing quite decently. But when people figure out and realize that they cannot import the same accounts that they have on MetaMask, they kind of get cold feet, honestly. So that's a big problem to solve. And account abstraction currently solves like eight problems and introduces three new ones. So now we have to figure out a way to like mitigate those three new problems, which I would say are different addresses, fund migration and maybe like custom networks, let's say evo.

Speaker A: Very good insights. Eight problems solved, three new ones leaves five solved new ones to solve. It's obviously a never ending cycle. I really much appreciate your time and your insight here. This was a, uh, real learning experience for me. I obviously also have an Empire wallet. I gotta keep playing and exploring it, uh, see where it's heading and what you're releasing there. Thank you so much for your time.

Speaker B: Thank you very much.

Speaker A: Daotalks is brought to you by Grindery. If you enjoyed this podcast, consider subscribing to Dao Talks on Apple Podcasts, Spotify, Google or any other platform you fancy. To find out more about Grindery, visit Grindery IO. Thanks for joining me, Tim. Auspicious.