L2 + Wallet: What Does This Mean for Builders

The onchain experience consists of three elements: a dapp, a network, and a wallet. At Zerion, we’re tackling the L2 and the wallet to let builders create new enjoyable onchain experiences. In this post, we outline what will be possible once we overcome the current limitations.

The limits of EOA wallets

Most addresses used today are externally owned accounts, or EOAs. These accounts hold assets and act as signers for transactions. 

Today’s dominant wallets for EOAs were created when there wasn’t much to do onchain. 

It’s hard to believe, but the ERC-20 token standard is less than a decade old. The ERC-721 format for most NFTs is even younger, created in 2018. Since then, builders have used these primitives to create a wealth of experiences. DeFi, art, and games all use the same standards in a myriad of ways.

However, most wallets and dapps only needed to perform relatively few onchain transactions. Even during the low gas price periods, doing anything on mainnet Ethereum would cost at least a few dollars. This created natural limits to doing things onchain. 

The growth of cheaper L1s and later L2s removed that barrier. Now it’s possible to build complex, fully onchain dapps. 

Yet there is only so much you can do with traditional wallets:  

• Any transaction still requires gas, and costs can add up—$0.01 is still >0
• There is no way to batch transactions, each requires a separate signature 
• There is no way to approve future or recurring transactions

This makes it impossible to create highly interactive (and fun) experiences that are onchain. For example: 

• In games, most actions are offchain and usually only monetary transactions are onchain 
• In decentralized social apps, most posts, comments, and other interactions are offchain 
• “Free” NFT isn’t free because either the user or the app needs to pay gas 

How new L2s can solve this

Layer 2 networks do more than just scale Ethereum and reduce gas fees. 

An L2 can overcome many of these limitations through account abstraction: 

• Pay gas in any token or subsidize the costs for the end user 
• Batch sign transactions 
• Sign delayed or event-based transactions 

With the ZK Stack, native account abstraction is possible at the protocol level. This means that transactions can be gasless—they can use any tokens, not just ETH, to pay gas fees. 

However, even on low-cost and efficient L2 like zkSync Era, gas is still not zero. This creates friction: they can’t start with zero, they can’t do anything if their balance goes to zero, and so on. Perhaps that’s why some successful platforms like CryptoMaze/Moody’s Madness are planning to launch their own networks. 

However, even if a dapp has full control over the chain, another element of the user experience is missing—the wallet.  

New transaction experience in new wallets

A Layer 2 purpose-built for a wallet makes new transaction experiences possible. 

On ZERϴ Network in Zerion Wallet, transactions will be gasless and sponsored—put simply, gas fees for users will be zero. Together with native Account Abstraction, this will eventually enable to: 

• Streamline transaction experience, bringing it closer to Web 2.0
• Bring more interactions onchain, for example, through free NFTs (that immediately show up in the wallet with fully interactive media)
• Create delayed or event-based transactions, including across different chains 

Under the hood, Zerion and/or dapp developers will sponsor the costs of posting rollup proofs to L1. In turn, the growth in the number of users on ZERϴ will likely generate more revenue in Zerion Wallet. 

Zerion is highly interested in bringing and retaining active users to the wallet. And this retention will come from having enjoyable things to do onchain. 

That’s where the built-in dapp discovery comes in.  

Dapp discovery

Whenever a new network launches, it faces a common problem: developers need users, and users need to find dapps. 

Usually, the user bears the burden. They need to check the network’s ecosystem page, Discord, or social media or at least tune in to their favorite influencers. 

ZERϴ in Zerion Wallet can solve this by offering dapp discovery right in the wallet: 

• Featured dapps in the Explore tab 
• Alerts from when wallets on the watchlist interact with dapps 
• Quests targeting specific dapps 

Zerion already has some of the most active onchain people. Over 300,000 addresses hold Zerion DNA NFTs in their Zerion Wallets. This paved the way for developing both wallet data and an anti-Sybil protection system called Onchain DNA. 

Best data and anti-Sybil protection

By building Zerion Wallet, we have developed the best-in-class data and the foundation of anti-Sybil protection based on onchain behavior. 

Zerion API offers enterprise-grade real-time wallet data. Besides Zerion, this API powers some of the leading consumer applications, including Uniswap Wallet and Rainbow, as well as dapps such as ShapeShift and Outposts. This data will be available to all developers building on ZERϴ for free via grants.

Onchain DNA is the upcoming Sybil protection system to indentify real users from bots. This helps to confidently cover transaction costs for real users only, knowing rewards aren’t going to sybils and spammers. The team also plans to make Onchain DNA open-source for developers building on ZERϴ to use and improve it. 

As a result, the combination of Zero and Zerion will be able to kickstart growth for any new onchain app. 

To sum up

In this post, we looked at how the limits of traditional externally owned wallets prevent a more fun onchain experience. We explored how L2s can solve some of these issues. 

Finally, we saw how the combination of L2 and wallet could enable new experiences that are more onchain (and more enjoyable!). 

Meanwhile, the interests of ZERϴ, Zerion, and dapps developers are closely aligned—all sides want to get more active users. And build-in dapp discovery is posed to fuel growth across all three. 

Now that the ZERϴ testnet is live, it’s time to experiment and build cool stuff. We at Zerion will work closely with all builders experimenting with making onchain more fun. Comment on ZERϴ's X or Farcaster, and let us know what you’re building! 

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