An Anonymous yet Accountable Contract Wallet System using Account Abstraction

This preprint explores the tension between transaction anonymity and the need for accountability in institutional or regulatory-compliant blockchain environments. The authors propose a novel contract wallet system that leverages account abstraction to integrate Zero-Knowledge Proofs (ZKPs) for privacy-preserving authentication. By separating the identity of the user from the transaction signature, the system ensures that while an account may remain anonymous to the public, there exists a mechanism for authorized parties to prove compliance or audit activity if required. The methodology combines ERC-4337 account abstraction with ZK-SNARKs, allowing users to initiate transactions that are valid and compliant without revealing their underlying private key or transactional history to the entire network. This work is significant for the field of decentralized identity (DID) and enterprise blockchain adoption, as it offers a middle ground between the full transparency of standard Ethereum accounts and the total obfuscation of purely anonymous systems. It provides a blueprint for how future smart accounts can be both user-sovereign and capable of meeting the stringent requirements of institutional and regulatory frameworks without sacrificing the core tenets of decentralization.