Ethereum update could cause wallets to steal your cryptocurrencies

After the Shapella (Shanghai + Capella) and Dencun (Deneb + ​​Cancún) hard forks, the Ethereum is already preparing for the next update. Phone call Pectra (Prague + Electricity)she must present the controversial improvement proposal EIP-3074.

Experts say that if the code is approved as it is now, it will mean users could transfer control of their wallets to third parties.

While this is already possible today, investors can revoke this access today as the permissions granted by EIP-3074 will be perpetual. In other words, it is possible that scammers will use these loopholes in new attacks.

The controversial EIP-3074

It is not difficult to find long texts about EIP-3074 (Ethereum Improvement Proposal number 3074) on social media. In short, users will be able to delegate control of their currencies to third parties, including Ether (ETH), but also any tokens and NFTs.

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The focus of the proposal is on the so-called ‘account abstraction’ (AA), which can provide features such as recurring payments and other features not yet available in cryptocurrencies. Vitalik Buterin, founder of Ethereum, created an image about the new possibilities after the update.

“Here is my rough graph of what parts of the “full AA” 3074 (and MPC) does or does not cover.”

Vitalik Buterin, creator of Ethereum, shows possible use cases after the introduction of EIP-3074 and MPC.Vitalik Buterin, creator of Ethereum, shows possible use cases after the introduction of EIP-3074 and MPC.
Vitalik Buterin, creator of Ethereum, shows possible use cases after the introduction of EIP-3074 and MPC.

As seen above, security is one of the main concerns, especially since EIP-3074 does not allow users to revoke permissions granted to third parties.

“Essentially, this delegates control of the external account (EOA) to a smart contract”explains the proposal.

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One of the biggest controversies concerns these OAEs. After all, the proposal suggests creating a list of controllers, which must be pre-approved by wallets like MetaMask. In other words, you will forever have to rely on predetermined third parties.

For some critics, this is another step toward centralizing power. After all, MetaMask was created by Consensys, which in turn was founded by Joseph Lubin, co-founder of Ethereum.

Another issue raised is that a smart contract can appear secure at the time it passes this check, but become malicious after an update.

Although history is full of hacks, EIP-3074 is expected to increase the number of such cases. After all, today investors can still revoke access to their wallets, limiting overall losses, as happened in the case of Arbitrum and later in the case of Multichain.

For those who are less experienced, the advice is never to give access to your account to third parties. For those who are more used to these permissions, the tip is to always read what you sign and, if necessary, read the code of the contract in question.

This is the big difference between Bitcoin and Ethereum

Finally, this is one of the big differences between Bitcoin and Ethereum. Although Bitcoin has few updates – too few according to well-known names such as Cobra – Ethereum is always presenting new features, which can bring advantages and disadvantages.

In other words, Bitcoin’s purpose is to serve as a store of value, with an emphasis on the 21 million unit limit and security. Ethereum, on the other hand, is a piece of technology that needs to be constantly updated to compete with its competitors in the smart contracts sector.

Source: Live Coins