What is EIP-1271?

EIP-1271, an Ethereum Improvement Proposal, establishes a standard for smart contract accounts (SCAs) to verify signatures, allowing them to function like Externally Owned Accounts (EOAs). This proposal enhances the security of smart contracts by guarding against unauthorized access or malicious activities.

In EOAs, transactions are authenticated using the private key. In contrast, for smart contract wallets, the contract itself authenticates transactions. However, this traditional approach has its drawbacks when applied to smart contract wallets, as it primarily supports EOAs.

To overcome these limitations, EIP-1271 introduces a novel method for signature verification tailored to smart contract wallets. Unlike the conventional reliance on ECDSA, EIP-1271 allows smart contract wallets to implement their own unique logic for validating signatures. This adaptability is particularly beneficial for various applications, such as multi-signature and social recovery wallets, thereby meeting the diverse needs of decentralized finance (DeFi) applications.