The upcoming Pectra hard fork in Ethereum will introduce a groundbreaking feature called “social recovery”, which aims to eliminate the risk of losing seed phrases. This innovation is part of the Ethereum Improvement Proposal (EIP) 3074 upgrade, which has been confirmed by Ethereum core developer Tim Beiko.
The upgrade will enhance the functionality of ordinary Ethereum wallets by incorporating new smart contracts capabilities. One of the key features is the ability to recover assets. In a blog post, Ethereum Foundation researcher “Domothy” explained that users can leverage the social recovery tool by transferring ownership of their assets to an invoker contract through a digital signature. This contract will then execute future transactions and function calls on the user’s behalf.
By delegating ownership, users can retrieve their assets even if they lose or forget their seed phrase. To make this possible, the implementation of the “AUTH” and “AUTHCALL” opcodes is crucial. Cryptocurrency commentator Cygaar elaborated on this, stating that the AUTH opcode verifies the user’s signature and intended action, while the AUTHCALL opcode executes the transaction, assigning the user as the caller instead of the invoker contract.
However, Domothy expressed concerns about potential fund drains if users delegate their assets to a malicious invoker contract. Nevertheless, he anticipates the availability of a few formally verified and fully audited invoker contracts after the Pectra upgrade.
Over the years, billions of dollars’ worth of cryptocurrency has been lost due to users forgetting or misplacing their private keys. EIP-3074 addresses this issue and has the added benefit of not requiring any Ether (ETH) in the wallet to send transactions. The entity behind the invoker contract can cover the transaction fees upfront, which could significantly contribute to mass retail adoption of Ethereum.
Additionally, EIP-3074 enables multiple actions to be executed in a single transaction. Cygaar emphasized that with this upgrade, these actions can be batched into a single transaction, streamlining the process.
The Pectra hard fork is expected to take place in late 2024 or early 2025, bringing significant advancements to Ethereum wallets.