What is a Smart Contract Wallet?
As we spoke about in our web3 wallet comparison, there are various types of digital assets. hold our digital assets, help us make transactions and keep our coins safe. While they’re still nascent, smart contract wallets are becoming more popular because they offer more features than conventional wallets.
Smart contract wallets are not regular (EOA) wallets. They’re smart contracts you control. This gives them a lot more flexibility and control.
What Features Do Smart Contract Wallets Have?
Smart contract wallets are the software that enable you to leverage account abstraction use cases. This means they have a whole bunch of cool features:
- Better security: Smart contract wallets can create spending limits. This lets you limit how much crypto you can move (or how many approvals you can give) in a given time period. This could stop you from losing everything if someone gets into your account.
- Multi-sig wallets: You can require certain (or all) transactions to be signed by additional wallets. This lets you prevent scammers from taking all your money or at least limit the damage.
- Batch transactions: With smart contract wallets, you can do multiple transactions at once. This means you could mint a layer 2 NFT in one click instead of separately switching network, bridging and minting. You could also provide Uniswap liquidity with a single click.
- Pay gas fees in any token: Smart contract wallets enable paying transaction fees with any token, for example USDC. That way, you don’t have to spend your precious ETH on gas.
- Built-in DeFi: Some wallets let you do DeFi things like lending, borrowing, and staking right from your wallet.
- No seed phrase: Seed phrases keep wallets safe, but are clunky to use. Smart contract wallets use social recovery and other mechanisms so you don’t have to bother using seed phrases.
- Batch revoking: Instead of manually revoking token approals, smart contract wallets can revoke all approvals for a given smart contract or for your entire wallet.
In short, smart contract wallets can simplify your on-chain life. To find the best wallet for you, check out our guide on finding the best web3 wallet.