ERC-7947: Universal Account Recovery for Smart Wallets

The evolution of smart contract wallets has transformed how users interact with blockchain technology, but one critical challenge remained unsolved: secure account recovery. ERC-7947 introduces a universal account abstraction recovery mechanism recoverOwnership(newOwner, provider, proof) along with recovery provider management functions for smart accounts to securely update their owner.

This breakthrough standard, proposed in May 2025, represents a significant advancement in wallet security infrastructure that directly supports the growing stablecoin ecosystem and the broader account abstraction movement.

ERC-7947, formally known as the Account Abstraction Recovery Interface (AARI), addresses one of the most pressing challenges in smart wallet adoption: what happens when users lose access to their primary authentication method? Unlike traditional externally owned accounts (EOAs) where losing a private key means permanent loss of funds, ERC-7947 creates a standardized framework for secure account recovery.

The proposal emerges from the broader context of account abstraction development. Account abstraction is a way to solve these problems by allowing users to flexibly program more security and better user experiences into their accounts. While ERC-4337 has successfully deployed account abstraction infrastructure, with over 26 million smart accounts deployed and more than 170 million UserOperations processed, the recovery aspect remained fragmented across different implementations.

ERC-7947 establishes two primary interfaces that work together to create a comprehensive recovery system. Smart accounts implementing AARI must support functions for adding and removing recovery providers, checking provider status, and executing recovery operations. Recovery providers, meanwhile, must implement subscription management and proof verification mechanisms.

The standard's design philosophy centers on flexibility and decentralization. The account recovery approach described in this proposal allows for multiple recovery providers to coexist and provide a wide variety of unique recovery services. In simple terms, smart accounts become "recovery provider aggregators", making it possible for the users to never rely on centralized services or projects.

The ERC-7947 recovery process involves several key components working in harmony. Users can add multiple recovery providers to their smart accounts, each potentially offering different recovery mechanisms such as social recovery, hardware-based verification, or zero-knowledge proofs.

When a recovery becomes necessary, the process follows a structured verification flow. The smart account validates that the specified provider exists in its approved list, calls the provider's recovery function with the submitted proof, and updates ownership only if verification succeeds. This multi-step process ensures that malicious recovery attempts cannot compromise account security.

One of ERC-7947's most innovative aspects is enabling a competitive marketplace for recovery services. With the developments in the Zero-Knowledge Artificial Intelligence (ZKAI) and Zero-Knowledge Two Factor Authentication (ZK2FA) fields, settling on a common mechanism may even open the doors for "account recovery provider marketplaces" to emerge.

This marketplace concept transforms account recovery from a binary choice between different wallet providers into a modular service that users can customize based on their specific needs and risk tolerance.

Traditional cryptocurrency recovery methods have significant limitations. Seed phrase recovery, while simple, creates single points of failure where phrase loss equals permanent fund loss. These incidents underscore that while seed phrases and automatic backups simplify wallet recovery, they remain a single point of failure.

Social recovery systems, popularized by wallets like Argent, offer improvements but come with their own challenges. Adding guardians to your wallet can be cumbersome — you may have to find people you can bestow sufficient trust and should know how crypto wallets work. These systems also require ongoing trust management as social relationships evolve over time.

ERC-7947 addresses these limitations by standardizing recovery interfaces while maintaining flexibility in recovery mechanisms. This standardization enables interoperability between different recovery approaches and reduces vendor lock-in, critical considerations for the broader Ethereum ecosystem.

Modern recovery solutions increasingly leverage Multi-Party Computation (MPC) technology. Modern wallet providers have created platforms that abstract away the private key entirely by utilizing technology that was developed in the 1980s called Multi-Party Computation (MPC). ERC-7947's flexible architecture can accommodate MPC-based recovery providers alongside traditional methods.

The integration potential extends to newer security technologies as well. Phantom and Bitget Wallet are leading the way in smart recovery, experimenting with hybrid MPC and account abstraction to provide seamless and user-friendly recovery options. This technological convergence demonstrates how ERC-7947 positions itself at the intersection of multiple security innovations.

Implementing ERC-7947 requires careful attention to access control and security considerations. The standard's documentation emphasizes that smart account developers must properly restrict access to provider management functions. Additionally, user education becomes crucial since malicious actors might attempt to social engineer users into adding compromised recovery providers.

The security model assumes that recovery providers operate independently and cannot collude to compromise accounts unless users explicitly configure overlapping authorities. This design principle supports the decentralized ethos while maintaining practical security guarantees.

Recovery mechanisms introduce additional attack vectors that developers must consider. A smart account user may be "phished" to add a malicious recovery provider to their account. In that case, a recovery provider may gain full control over the account by accepting fake recovery proofs. Proper implementation requires robust provider verification and user interface design that clearly communicates the implications of adding recovery providers.

For applications handling substantial value, such as stablecoin transfer platforms, implementing additional safeguards like time delays for recovery operations or multi-signature requirements for high-value recoveries may be appropriate.

ERC-7947 doesn't exist in isolation but rather complements the existing account abstraction infrastructure. In 2024, smart-account deployments exceeded 200 million, and analysts expect another wave as tooling matures through 2025. This growth creates a substantial user base that could benefit from standardized recovery mechanisms.

The standard's compatibility with ERC-4337 ensures that existing account abstraction infrastructure can integrate recovery capabilities without requiring fundamental architectural changes. This backward compatibility accelerates adoption while preserving existing investments in account abstraction technology.

Institutional adoption of account abstraction continues accelerating, with Safe secures over $100 billion in value across more than 7.5 million smart account addresses. For enterprise users, ERC-7947's recovery capabilities provide essential business continuity features that traditional EOAs cannot match.

The standard's support for multiple recovery providers enables sophisticated access control policies suitable for institutional requirements, such as requiring multiple independent verification methods or integrating with existing enterprise identity management systems.

ERC-7947's architecture anticipates integration with advanced cryptographic recovery methods. Zero-knowledge proofs enable users to prove they should regain account access without revealing the underlying secrets used for verification. This approach enhances privacy while maintaining security.

The flexible proof format in ERC-7947 accommodates various cryptographic schemes, from simple signature verification to complex zero-knowledge circuits. This flexibility ensures the standard can evolve with advancing cryptographic research without requiring fundamental changes to the interface.

Emerging recovery technologies include biometric verification and hardware-based security elements. Passkeys use encrypted data stored on a device's secure enclave and perform user verification with hardware tokens (like YubiKeys), biometric data (like fingerprints or facial recognition), or other cryptographic methods.

ERC-7947's generic proof mechanism can accommodate these technologies as recovery providers, enabling users to choose authentication methods that match their comfort level and available hardware.

The practical applications of ERC-7947 extend across numerous blockchain use cases. For DeFi applications, secure recovery mechanisms reduce the barrier to self-custody by addressing users' primary fear of permanent fund loss. Gaming applications benefit from recovery systems that maintain user engagement even after device loss or account lockouts. Cross-chain applications particularly benefit from standardized recovery interfaces.

Consumer adoption of cryptocurrency faces significant user experience challenges. Mass adoption, user onboarding, and friendly UX have always been the priorities for Web3 builders all over the world. But if you ever try to talk to a "normie" about the complications in Web3, one of the first problems that arise is wallets, seed phrases, and the "signing up" process.

ERC-7947 addresses these concerns by enabling recovery mechanisms that feel familiar to users accustomed to traditional account recovery flows, such as email-based reset procedures or phone verification, while maintaining the security benefits of blockchain technology.

ERC-7947's development roadmap includes several areas for future enhancement. Integration with emerging identity standards, expanded cryptographic proof support, and cross-chain recovery mechanisms represent natural evolution paths for the standard.

The growing account abstraction ecosystem continues to develop complementary standards that enhance user experience and security. ERC-7947's modular design positions it to integrate with these developments seamlessly.

Layer 2 adoption accelerates as networks like Arbitrum, Optimism, and Polygon mature. ERC-7947's implementation on these networks enables consistent recovery experiences across different scaling solutions, reducing user confusion and supporting seamless cross-network asset management.

For platforms like Eco's cross-chain infrastructure, standardized recovery interfaces reduce integration complexity while ensuring users maintain consistent security guarantees across different networks.

Implementing ERC-7947 securely requires following established best practices for smart contract development. Access control mechanisms must ensure that only authorized parties can modify recovery provider configurations. Time delays for critical operations provide additional security against compromised accounts.

Regular security audits become essential for recovery providers, as these services handle critical security functions for potentially large numbers of users. The decentralized nature of the recovery provider ecosystem means that users must evaluate provider security independently.

Users choosing recovery providers should consider several factors: the provider's security track record, the transparency of their recovery mechanisms, and their long-term viability. Provider concentration risks also matter—using multiple independent providers reduces the impact of any single provider failure.

For applications serving enterprise stablecoin users, additional due diligence requirements may include regulatory compliance verification and integration with existing enterprise security infrastructure.

What makes ERC-7947 different from existing recovery methods?

ERC-7947 standardizes recovery interfaces while supporting multiple recovery mechanisms, enabling interoperability and reducing vendor lock-in compared to proprietary recovery solutions.

How does ERC-7947 prevent malicious recovery attempts?

The standard requires explicit user approval for recovery providers and uses cryptographic proof verification to ensure only legitimate recovery attempts succeed.

Can ERC-7947 work with existing smart wallets?

Yes, ERC-7947 is designed to be compatible with existing account abstraction infrastructure, including ERC-4337 implementations.

What types of recovery providers does ERC-7947 support?

The standard's flexible architecture supports various recovery mechanisms including social recovery, hardware-based verification, biometric authentication, and zero-knowledge proofs.

Is ERC-7947 secure for high-value accounts?

When properly implemented with appropriate access controls and provider verification, ERC-7947 provides robust security suitable for high-value applications, though additional safeguards may be appropriate for institutional use cases.

ERC-7947 represents a crucial step forward in making blockchain technology more accessible and secure for mainstream adoption. By standardizing account recovery interfaces while maintaining flexibility in implementation approaches, the standard enables innovation in recovery mechanisms while ensuring interoperability across the ecosystem. As account abstraction continues maturing, ERC-7947's contribution to user security and confidence will prove essential for broader cryptocurrency adoption.