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Basic Blockchain & DeFi Concepts

Blockchain The blockchain adds blocks of data for validation onto chronologically consolidated chains in order to verify contract satisfaction and forward a transaction command to execution.

Decentralized Finance (DeFi) Next-generation non-institutional finance system where funds and accounts are fully under user custody. Transparency of transactions is public, user anonymity is maintained, and contractual agreements occur on peer-to-peer (P2P) decentralized networks. This is a blockchain.

Externally Owned Account (EOA) A digital wallet accessed by a private-public key pair for the holding and transacting of crypto assets. They interact with smart contracts and connect to platforms.

Smart Contract A program that facilitates an agreement between signers on a decentralized digital service. It enables voluntary engagement and security protocols with open transparency to execute transactions, record events, or perform other executive actions when necessary conditions are satisfied.

Decentralized Application (DApp) An automated program that operate on P2P platforms. They are open source and leverage smart contracts for their fundamental operations as opposed to centralized servers for data feed and decision execution.

Account Abstraction (AA) The method by which accounts employ smart contracts to optimize (according to user principles) parameters for automated execution of commands. This enables customized permissions curation and performance conditional on ecosystem state.

Yield Financial rewards earned for contributing funds towards services which use them to facilitate operations on an ecosystem.

Staking Deposition of assets into a locked pool to back the finances of an ecosystem. This allows the network to facilitate its operations, such as validating transactions, curating data, or executing governance actions.

Ethereum Virtual Machine (EVM) The Ethereum Virtual Machine (EVM) is a core component of Ethereum’s blockchain network, serving as a decentralized computing engine that executes smart contracts and processes transactions. For a more detailed description see here.

Know-Your-Client Know Your Client processes are which identify, perform due diligence on, and continue to monitor a potential customer. This can be undertaken in various ways on blockchain platforms to ascertain a potential customer’s right to partake of services, or to confirm illicit intent.

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Wallchain System

ZeroDev An infrastructure that allows customized development of a smart (AA system) wallet with a simple and easy, “Web2”-like user experience (UX). ZeroDev is the underlying logic upon which a user designs the operations of their AA wallet.

Session Key A temporary access key used by the signatory (account user) to enable smart operations on the Wallchain system whilst away.

Layer 2 A dependent application layer built on the fundamental blockchain logic to enable application software. The security guarantees of the underlying blockchain layer are intrinsic to Layer 2 infrastructure. They are traditionally used to maximize the native blockchain’s scalability by building solutions to optimize computationally heavy operations and associated financial bottlenecks.

Auto-Withdrawal The built-in security system of Wallchain by which funds are automatically withdrawn from the AA smart wallet in the event of compromise, protecting user yields and transferring them to their EOA.

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ERC-4337 Basic Implementation Processes

UserOperations Represents the structured data sent by users to interact with smart contracts under the ERC-4337 standard. This includes transaction details like the target contract, the value transferred, and the data payload.

Bundler A network participant in the ERC-4337 system responsible for gathering UserOperations and bundling them into transactions to be executed by the EntryPoint. Bundlers optimize transaction ordering for efficiency and cost-effectiveness.

EntryPoint The central contract in the ERC-4337 architecture that processes transactions forwarded by bundlers. It validates, executes, and manages UserOperations according to predefined rules and security checks.

Account Contract A smart contract that defines the behavior of user accounts under the ERC-4337 standard. It includes mechanisms for executing transactions, managing permissions, and interacting with other contracts.

Factory Contract A contract that deploys new Account Contracts dynamically. It allows users to create personalized accounts on the fly with customized logic and features based on the ERC-4337 framework.

Paymaster Part of the ERC-4337 infrastructure that manages transaction fees. Paymasters accept fee payments on behalf of users and ensure that bundlers and validators are compensated for their efforts in processing transactions.

Aggregator An entity or service in the ERC-4337 ecosystem that optimizes the submission of UserOperations by aggregating multiple requests into a single transaction. This reduces costs and enhances throughput on the network.