Ethereum’s Pectra Update to Enable Recovery of Private Keys

The Ethereum Pectra update, slated for late 2024 or early 2025, promises to introduce a host of additional features for crypto wallets and enhancements to user experience, according to blockchain developer Tim Beiko.

All things considered, teams were in agreement about moving forward in the EIP. 3074 will be included in Pectra ?!

— timbeiko.eth ☀️ (@TimBeiko) April 11, 2024

The update will be based on the already approved EIP-3074, which will add new capabilities for wallets, including the recovery of lost keys.

To utilize the tool, users must transfer ownership of their assets to an initiator contract via a digital signature, which executes transactions and function calls on their behalf.

Web3 researcher cygaar explained that the EIP transforms wallets into smart contracts by adding two new operational instructions — AUTH and AUTHCALL.

So how can we turn existing EOAs into smart contracts?

By adding two new opcodes (computer instructions) — AUTH and AUTHCALL. These two opcodes work in tandem to allow a smart contract to act on behalf of an EOA.

Here’s a quick overview on how they work (feel free to skip).

— cygaar (@0xCygaar) April 11, 2024

AUTH verifies the user’s signature and intended action, while AUTHCALL invokes the target contract to execute with the “sender’s address as the caller.”

Pectra will also introduce a feature for “bundling” transactions into groups and the ability to delegate funds.

Another key advantage of EIP-3074 is that users will not need ETH in their wallet to send transactions, as the organization behind the initiator contract can pay for operations “in advance.”

DeFi Llama developer 0xngmi pointed out the main drawback of the EIP is that “it will now be possible to fully drain an address, all tokens, all NFTs, all DeFi positions with only one bad signature.”

downside of EIP 3074 is that now it’ll be possible to fully drain an address (all tokens, all nfts, all defi positions…) with only one bad signature

— 0xngmi (@0xngmi) April 11, 2024

While the update raises security concerns, “people will always find a way to lose their money,” noted Gaslite co-founder Harrison Leggio.

Lots of drama over EIP-3074 introducing new security concerns and attack vectors.

Guess what?

People literally GIVE THEIR PRIVATE KEYS TO TRADING BOTS. People will always find a way to lose their money.

— Pop Punk (@PopPunkOnChain) April 11, 2024

Earlier, Ethereum co-founder Vitalik Buterin discussed the next stage of the blockchain’s roadmap — The Purge. It aims to simplify the network’s structure and reduce the load on nodes.

Back in March, he highlighted the need for internal network scaling and parallel processing of rollups to build on the success of the Dencun update.