Ethereum’s recent upgrade to the ERC-4337 standard is key to onboarding the $3.7 trillion traditional real estate world to Web3. Deployed with a surprise announcement at ETHDenver, this new protocol standard surprised many with its list of improvements. So what exactly is ERC-4337?
What is the ERC-4337 standard?
ERC-4337 ushers in a new standard for Ethereum wallets called account abstraction. Simply put, Ethereum wallets that have opted into ERC-4337 have become “smart wallets” that operate entirely on-chain. Wallets, like the smart contracts themselves, are programmable and provide key benefits such as:
- account recovery
- Two-factor authentication security
- Bulk transaction
- Increase interoperability between EVM compatible tokens
- Set usage limits for your account
How will these new features help real estate?
Anyone who has ever dealt with real estate can tell you that it’s a bogged down, inefficient process in the zero web era. Searching for titles is slow and not guaranteed to catch everything. You will have to drive to hand the physical papers to each other and it may take several days to complete the payment.
For years, many have looked to blockchain technology as a way to modernize some of these pain points. Commonly discussed improvements include:
- Using NFTs to Represent Property Deeds
- Replace title search with etherscan search
- Rent collection using stablecoins
- Use a contract signature instead of a notarized signature
While these ideas sound great, there are also many hurdles to overcome. Account abstraction helps solve her two biggest problems: account recovery and two-factor authentication.
account recovery
Storing cryptocurrencies is difficult, and losing access to wallets that hold important things like deeds and landlord operational accounts can be devastating. For many people, using cryptocurrencies is in itself intimidating, and the thought of needing to keep a 24-word seed phrase safe forever is daunting to those already skeptical of the industry.
Fortunately, ERC-4337 allows users to regain control of their wallets using a “guardian” even if the owner loses their private keys.
Guardians are individuals or entities that users can choose to recover their accounts if access to the wallet is lost. Examples of guardians include a trusted friend, a university that distributes diplomas as her NFT, or in the future, a local bank.
ERC-4337 reduces reliance on seed phrases and greatly aids mainstream adoption
By enabling social recovery for Ethereum wallets, real estate firms are more likely to consider using smart contract technology in their day-to-day operations.
two elements certification
Another important feature of ERC-4337 is the introduction of two-factor authentication support. For many people, the world of cryptocurrencies is synonymous with being hacked. Two-factor authentication allows users to finally protect their accounts from hackers accessing their wallets and stealing all their assets within minutes.
Additionally, wallet owners can set limits on the amount that can be transferred. For example, if the wallet contains his 100 eth, a user cannot send more than his 10 eth through an ERC-4337 enabled wallet without first authorizing the transaction with his two-factor authentication. can be restricted.
With two-factor authentication and the ability to properly protect high-value items with spending limits, real estate companies are likely to feel comfortable using blockchain in the future. Prior to this implementation, it was too risky for traditionally conservative real estate companies to seriously consider using blockchain.
Common 2FA services include Google Authenticator and Authy
Will account recovery and two-factor authentication alone be enough for the real estate industry to join Web3?
Of course, that’s not all. However, the applications of blockchain technology in real estate are endless. For example, it makes payments much easier, faster and cheaper, eliminates the need for inefficient physical paper record keeping, and provides a verifiable way to track events over time. It’s not a question of whether real estate companies will start using blockchain, it’s a question of when it will become commonplace.
As our population grows accustomed to the technology over time, it seems almost inevitable that blockchain technology will disrupt the real estate industry. With improvements, the road to integrating real estate and Web3 has never seemed easier.
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*All investment/financial opinions expressed by NFT Plaza are based on the personal research and experience of the site moderators and are intended for educational material only. , the product should be thoroughly investigated.
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