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Sentiment, a new partial mortgage lending protocol, is about to go online. Why should we care about smart contract wallets?

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Smart contract wallets will play an integral role in the next wave of DeFi.

Original author: ruvaag

Original compilation: 0x9F, BlockBeats

Permissionless fractional collateralized lending protocol Sentiment announced that it will launch Arbitrum on October 21st. Unlike traditional mortgage lending agreements, borrowers must use Sentiment's proxy account to hold assets. What is a Sentiment "account"? And how do they facilitate low-collateralized borrowing? This article is based on the views of ruvaag, the main developer of Sentiment, on his personal social media platform, and BlockBeats organizes and translates it as follows:

An "account" is derived from the traditional concept of a smart contract wallet, but redesigned as a unowned asset container that can track debts and balances.

People are very interested in non-custodial "hot wallets" (such as MetaMask) and "cold wallets" ( Such as Ledger) have a certain understanding, but not much understanding of the smart contract wallet. The difference is that functions are controlled by permissionless smart contract code instead of private keys.

Smart contract wallets have been around for a while, such as Gnosis Safe, Argent, DefiSaver. In order to enhance the traditional EOA (Externally Owned Accounts) model, they added a configuration layer to the upper layer to build functions such as multi-signature, social recovery, and batch transactions.

Sentiment uses smart contract wallets to create accounts that form the building blocks on-chain. Accounts are containers for user collateral and debt. Each account is an independent smart contract implemented using the Beacon model, which is cheaper and more usable than the transparent proxy model.

The rationale behind this account design using smart contract wallets is that users level to reduce the risk of default. By turning accounts into asset-aware containers, Sentiment creates an EOA-like experience while providing value-added features such as on-chain low-collateralization lending.

Due to the composable nature of accounts, it is sure to have many exotic use cases in the future: as a structure While the optimized product is ready to use out of the box, the ownership belongs to another smart contract or multi-signature. In addition, using EIP-4626 Tokenized accounts will allow users to obtain centralized benefits.

In short, although the smart contract wallet has a simple structure, it has great potential to change the user experience of DeFi applications . Building around EIP-4337, they will play an even bigger role.

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